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Google winning 98% ad spots it auctions off, after order to treat others equally

wsj.com

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Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#91

Post by cornholio »

savanaly wrote: post #69
natch wrote: post #6

Tell me if I've got this right: Say you have some businesses in industry X that all rely on advertising. Say one of those businesses also happens to own the dominant advertising platform that businesses in industry X need to use, in order to effectively find customers. (Special note for those subset of HN readers who tend not to read: Yes there may be other platforms, but before you present that as an objection, note…

>In this setup, the business that owns the advertising platform has an advantage over all other businesses in industry X, because it pays itself advertising revenue, where the other companies have to pay their competitor. So money is always being siphoned off to pay the advertising platform, with a cost to most businesses but a (near) zero cost to the business owning the platform. I don't think this is quite right. I…

However, winning ALL slots on a market dominant platform has a value unto itself, by denying competitors most revenue and forcing them to increase prices to cover fixed costs, and reduce price competition and market efficiency, strongly increasing the margins of the leader.

So the ability to pay yourself unlimited money guarantees a market dominant spot where competition is drastically diminished.

It also strongly affects Google's search incentives, making them prioritize advertising and create inventory where there was none, dying up organic trafic. This is something a profit oriented enterprise would tend to do anyway to maximize revenue, but it's a far cry from Google's original neutrality aspirations.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#92

Post by Beltiras »

test6554 wrote: post #16

Google: We compete against our competitors to see who can pay us the most money. And our competitors are complaining that they can't pay us as much money as we pay ourselves.

Exactly. Google can artificially raise the price beyond their competitors means.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#93

Post by csomar »

natch wrote: post #6

Tell me if I've got this right: Say you have some businesses in industry X that all rely on advertising. Say one of those businesses also happens to own the dominant advertising platform that businesses in industry X need to use, in order to effectively find customers. (Special note for those subset of HN readers who tend not to read: Yes there may be other platforms, but before you present that as an objection, note…

It is not rigged. Google own the thing. It is not a public utility. If I put an ad, product, or something on my site do I need to care about you? nope. I only care about my own profit.

Same should be going with Google. However, people assume things should happen in a different way because Google has become very popular?

Many people scream "regulation" here. But look around: There is plenty of money in Tech and in funding, yet we have a single Google. I'm afraid regulation will kill and not innovate.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#94

Post by jarnix »

ucaetano wrote: post #19

> Kelkoo CEO Richard Stables says the firm’s revenue from general search traffic dropped by 62% last year, to €2.3 million. In 2018, he projects a two-thirds drop to €800,000. I decided to go to http://www.kelkoo.co.uk/ to check it out. This website is so clearly a scam created for this antitrust case. I went ahead to compare two cameras: the Canon EOS 1D X Mark II (a $4k camera) to a Canon Ixus 275 HS ($200 camera),…

This is a text made for SEO, it's not journalism obviously!

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#95

Post by aoeusnth1 »

taneq wrote: post #79
Ilverin wrote: post #24

Earlier quoted context omitted.

I think this effect is small because of opportunity cost. In Case A, google wins the bid, they gain the ad space, but gain no revenue. In Case B, google does not win the bid, they lose the ad space, but do gain revenue. Revenue and ad space are mutually exclusive, each is the opportunity cost of the other. Yes, in both cases google wins, but that is because google is the reason the ad space exists in the first place.

Google can 'print' as many ad spaces as they want, and buy back the ones that don't reach their minimum price.

.. and your objection to that is?

I’m not following the logic of how Google’s camera comparison shopping business is unfairly more profitable just because it’s bolted onto an immensely profitable ad company.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#96

Post by aoeusnth1 »

jayd16 wrote: post #49
natch wrote: post #6

Tell me if I've got this right: Say you have some businesses in industry X that all rely on advertising. Say one of those businesses also happens to own the dominant advertising platform that businesses in industry X need to use, in order to effectively find customers. (Special note for those subset of HN readers who tend not to read: Yes there may be other platforms, but before you present that as an objection, note…

It just comes down to Google gets to pay cost for ads and everyone else has to pay market price. The important factor here is any profit that could have been made between cost and market price for those ads is lost to Google as well. At best, Google is just cheating revenue out of its ad division. I'm not sure this would actually be a huge advantage in the long run unless integration led to Google ads being cheaper t…

Exactly. They pay cost for ads PLUS opportunity cost of selling the ads. If you assign the opportunity cost and revenue of selling the ad to the Ads department and the revenue of the camera business to the Shopping department, it seems obvious that it’s not unfair.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#97

Post by Eridrus »

bonesss wrote: post #81
londons_explore wrote: post #61

Earlier quoted context omitted.

Most importantly they have more information about each auction than their competitors. They know for each user every other search result clicked. They know what the users interests are. They know which users prefer stuff delivered fast, which prefer the cheapest items, and which will be wooed by 50% off deals. They can use that data to present the best possible results, get the highest click through rate, and sell th…

> Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown. Isn't this fundamentally an argument to outsource a greater portion of ad creation and campaigns, or parts thereof, to Google? Google isn't just the best ad platform, it's likely the smartest user of that ad platform, and has the automation/ML…

I think Google is only a threat to ad agencies that are hyper focussed on dealing with the tech bits, Google has little interest in managing ad (creative) creation, or your Facebook, TV etc advertising.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#98

Post by peoplewindow »

dsacco wrote: post #58
jacksmith21006 wrote: post #56

Earlier quoted context omitted.

Is this honestly a question? Murdoch disdain for Google is well known.

Rupert Murdoch can have well documented dislike for Google without his dislike intrinsically kneecapping the Wall Street Journal’s journalistic integrity. The comment I replied to criticizes the article we’re discussing categorically by origin, instead of specifically on merits. Murdoch’s agenda can be a thesis statement for why the WSJ has poor journalistic integrity with respect to Google, but it doesn't demonstrat…

Appreciate the demand for precision, but you won't get more than anecdotes in this case.

I used to work for Google and I remember the 180 degree turn in WSJ's output after Murdoch gave a speech in which he announced Google News was killing journalism and the future of newspapers was the iPad (this was just after the iPad was new). Suddenly bullshit articles about us started appearing constantly.

The first one I remember was about the Safari cookie case, if anyone remembers that. Basically Safari had shipped a third party cookie filter that broke the web as a "privacy" feature. Because it didn't work and couldn't ever work Apple started adding in bizarre documented workarounds that were basically bugs in the filter, but they chose to document rather than fix, so important apps like the Facebook like button would start working again. Google started using these workarounds as was intended by Apple in order to fix its own products. The WSJ paid some academics to go dirt digging and they found this, announced Google was hacking Safari's filter etc, Apple exploited the situation, this caused regulators to go and whack us and so on.

It's quite amazing how easily manipulated governments and especially regulators are by newspapers. My father used to hate Murdoch with a passion (he was in the tv biz), and after that I understood why... the power wielded by people who own newspapers is phenomenal. And they do not hesitate to abuse it!

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#99

Post by ucaetano »

andy_ppp wrote: post #88
ucaetano wrote: post #19

> Kelkoo CEO Richard Stables says the firm’s revenue from general search traffic dropped by 62% last year, to €2.3 million. In 2018, he projects a two-thirds drop to €800,000. I decided to go to http://www.kelkoo.co.uk/ to check it out. This website is so clearly a scam created for this antitrust case. I went ahead to compare two cameras: the Canon EOS 1D X Mark II (a $4k camera) to a Canon Ixus 275 HS ($200 camera),…

Haha, having worked at Kelkoo when it was owned by Yahoo! so I have to disagree here. The management at Kelkoo really believe Google is shafting them but they used to do crazy things like change the location of the website every time they deploy. They were bad at SEO and blamed Google.

> having worked at Kelkoo when it was owned by Yahoo! so I have to disagree here

The issue isn't when it was part of Yahoo, but after. It was bought by a virtual shell company registered at the same office as Kelkoo, with generic directors and almost no employees. It now has bogus product descriptions, which are the same for every single product (read the rest of the post).

They were clearly bought for the sole purpose of filing a claim against Google.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#100

Post by savanaly »

cornholio wrote: post #91
savanaly wrote: post #69

Earlier quoted context omitted.

>In this setup, the business that owns the advertising platform has an advantage over all other businesses in industry X, because it pays itself advertising revenue, where the other companies have to pay their competitor. So money is always being siphoned off to pay the advertising platform, with a cost to most businesses but a (near) zero cost to the business owning the platform. I don't think this is quite right. I…

However, winning ALL slots on a market dominant platform has a value unto itself, by denying competitors most revenue and forcing them to increase prices to cover fixed costs, and reduce price competition and market efficiency, strongly increasing the margins of the leader. So the ability to pay yourself unlimited money guarantees a market dominant spot where competition is drastically diminished. It also strongly af…

Let's say that winning ALL slots on a market dominant platform does have a value unto itself, and the total value is V. Then Google can consume the spots itself, but it is giving up the ability to sell the package of all slots to someone else for V. So it still costs them V.

If Google is the only one who can extract V (likely the case, since they are the ones consuming the spots), they are reaping the benefits of that fact, not of being able to sell to themselves.

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