Google is the dominant player in online advertising, one reason the U.S. Justice Department is laying the groundwork for potential antitrust action against the tech giant. It has a 37% share of the $130 billion U.S. digital ad market, according to research firm eMarketer, but understanding Google’s full clout requires a deeper look at the sector.
Google is the major force at every layer between advertisers and websites, providing tools used in the many steps of purchasing and selling online ads—whether they are meant to run on Google’s own platforms or sites around the web. Critics say the company packages and prices its products in ways that thwart competition and allow it to take an unreasonably large cut of online ad transactions.
A Google spokesman declined to comment. The company is prepared to show U.S. regulators that while it has an enviable place in online advertising, it doesn’t have monopolistic pricing power, The Wall Street Journal reported.
The mainstay of Google’s business is search. It has close to 80% of the U.S. market for search ads, accounting for the bulk of its $116.3 billion in total ad revenue last year.
Let’s say hypothetical brand Airline Inc. wants to advertise on Google search results pages:
Airline Inc.
Search 360
Google Ads
Google has a tool Airline Inc. could use to plan and manage its search ad campaign.
Airline Inc. would have to use Google Ads to enter bids for keywords users search for in Google.
Keywords from user searches are sent to an ad auction.
Auction
flights to new york
If Airline Inc. has the highest bid, its ad will appear in the search results.
Airline Inc.
Ad
Analytics 360
Google has a tool Airline Inc. could use to measure the impact of its ad campaign.
Let’s say hypothetical brand Airline Inc. wants to advertise on Google search results pages:
Search 360
Airline Inc.
Google Ads
Google has a tool Airline Inc. could use to plan and manage its search ad campaign.
Airline Inc. would have to use Google Ads to enter bids for keywords users search for in Google.
Keywords from user searches are sent to an ad auction.
flights to new york
Auction
Airline Inc.
If Airline Inc. has the highest bid, its ad will appear in the search results.
Ad
Analytics 360
Google has a tool Airline Inc. could use to measure the impact of its ad campaign.
Let’s say hypothetical brand Airline Inc. wants to advertise on Google search results pages:
Airline Inc.
Search 360
Google Ads
Google has a tool Airline Inc. could use to plan and manage its search ad campaign.
Airline Inc. would have to use Google Ads to enter bids for keywords users search for in Google.
Keywords from user searches are sent to an ad auction.
flights to new york
Auction
Airline Inc.
Ad
If Airline Inc. has the highest bid, its ad will appear in the search results.
Analytics 360
Google has a tool Airline Inc. could use to measure the impact of its ad campaign.
Let’s say hypothetical brand Airline Inc. wants to advertise on Google search results pages:
Airline Inc.
Search 360
Google has a tool Airline Inc. could use to plan and manage its search ad campaign.
Google Ads
Airline Inc. would have to use Google Ads to enter bids for keywords users search for in Google.
flights to new york
Keywords from user searches are sent to an ad auction.
Auction
Airline Inc.
Ad
If Airline Inc. has the highest bid, its ad will appear in the search results.
Analytics 360
Google has a tool Airline Inc. could use to measure the impact of its ad campaign.
Source: the company’s website
Marketers can bid for ads on search-result pages based on phrases that users have typed into the Google search bar. They can only place these bids through Google’s own tool, Google Ads (formerly known as “AdWords”). Advertisers can use Google’s leading Analytics 360 product to measure how well a campaign is performing.
Google is the market leader in placing ads that appear just about anywhere online—from news sites to cooking sites to mobile apps and games. These can be display ads, banner images in small boxes within or next to articles, or ads within videos. Google has the leading tool to purchase ad space, Display & Video 360, or DV 360, which lets brands enter bids to reach web users with certain demographic profiles and interests.
Those bids are fed into ad marketplaces that offer up ad space across thousands of websites throughout automated electronic auctions. Bids placed in DV 360 can go to marketplaces not owned by Google, but many of them go to Google’s own ad exchange, commonly known as AdX, the world’s largest with about half the market share.
Say Airline Inc. now wants to appear in display and video ads on third-party websites and apps:
Airline Inc.
Campaign Manager
DV 360
Google has a dashboard Airline Inc. could use to plan and track its campaigns.
Airline Inc. could use Google’s ad-buying tool to bid for users in its target audience.
Website
Websites and apps make space available to sell to advertisers.
Ad
Auction
DoubleClick for Publishers,
AdSense or AdMob
AdX
Google’s ad marketplace matches advertisers’ bids with available spaces.
Many websites and apps use Google’s ad-serving tools to deliver ads to the spaces.
Website
If Airline Inc. has the highest bid, the targeted users will see its ads.
Ad
Airline Inc.
Analytics 360
Say Airline Inc. now wants to appear in display and video ads on third-party websites and apps:
Airline Inc.
Campaign Manager
DV 360
Google has a dashboard Airline Inc. could use to plan and track its campaigns.
Airline Inc. could use Google’s ad-buying tool to bid for users in its target audience.
Websites and apps make space available to sell to advertisers.
Website
Ad
Auction
DoubleClick for Publishers,
AdSense or AdMob
AdX
Google’s ad marketplace matches advertisers’ bids with available spaces.
Many websites and apps use Google’s ad-serving tools to deliver ads to the spaces.
Website
If Airline Inc. has the highest bid, the targeted users will see its ads.
Ad
Airline Inc.
Analytics 360
Say Airline Inc. now wants to appear in display and video ads on third-party websites and apps:
Airline Inc.
Campaign Manager
DV 360
Google has a dashboard Airline Inc. could use to plan and track its campaigns.
Airline Inc. could use Google’s ad-buying tool to bid for users in its target audience.
Website
Websites and apps make space available to sell to advertisers.
Ad
DoubleClick for Publishers,
AdSense or AdMob
AdX
Auction
Google’s ad marketplace matches advertisers’ bids with available spaces.
Many websites and apps use Google’s ad-serving tools to deliver ads to the spaces.
Website
If Airline Inc. has the highest bid, the targeted users will see its ads.
Ad
Airline Inc.
Analytics 360
Say Airline Inc. now wants to appear in display and video ads on third-party websites and apps:
Airline Inc.
Campaign Manager
Google has a dashboard Airline Inc. could use to plan and track its campaigns.
DV 360
Airline Inc. could use Google’s ad-buying tool to bid for users in its target audience.
Website
Ad
Websites and apps make space available to sell to advertisers.
DoubleClick for Publishers,
AdSense or AdMob
Many websites and apps use Google’s ad-serving tools to deliver ads to the spaces.
AdX
Google’s ad marketplace matches advertisers’ bids with available spaces.
Auction
Website
Ad
Airline Inc.
If Airline Inc. has the highest bid, the targeted users will see its ads.
Analytics 360
Source: the company’s website
On the other side of the business, publishers make ad space from their sites available on ad marketplaces through ad servers—a category where Google has at least 70% market share, according to industry sources. Large publishers typically use its server, commonly known as DoubleClick for Publishers. Smaller publishers often use Google’s AdSense, while mobile app publishers use Google’s AdMob. (DoubleClick for Publishers and AdX are now tied together in one product called Google Ad Manager.)
While advertisers can generally use tools from several companies to purchase online video ads, Google’s YouTube is the major exception. Advertisers must use Google’s products to purchase YouTube ads. That is significant, because with 2 billion monthly users, YouTube is by far the biggest player in online video by audience size.
Say Airline Inc. now wants to advertise on YouTube:
Airline Inc.
Campaign Manager
DV 360 or Google Ads
YouTube campaigns can be planned like any other.
Airline Inc. would have to use one of Google's ad-buying tools to buy ads on YouTube.
YouTube
YouTube has space available to advertisers.
Advertisements for Airline Inc. could appear before or within a video.
Skip Ad
Airline Inc.
0:12 / 0:30
Analytics 360
Say Airline Inc. now wants to advertise on YouTube:
DV 360 or Google Ads
Campaign Manager
Airline Inc.
Airline Inc. would have to use one of Google's ad-buying tools to buy ads on YouTube.
YouTube campaigns can be planned like any other.
YouTube
YouTube has space available to advertisers.
Advertisements for Airline Inc. could appear before or within a video.
Skip Ad
Airline Inc.
0:12 / 0:30
Analytics 360
Say Airline Inc. now wants to advertise on YouTube:
Airline Inc.
DV 360 or Google Ads
Campaign Manager
YouTube campaigns can be planned like any other.
Airline Inc. would have to use one of Google's ad-buying tools to buy ads on YouTube.
YouTube
YouTube has space available to advertisers.
Advertisements for Airline Inc. could appear before or within a video.
Skip Ad
Airline Inc.
0:12 / 0:30
Analytics 360
Say Airline Inc. now wants to advertise on YouTube:
Airline Inc.
Campaign Manager
YouTube campaigns can be planned like any other.
YouTube
YouTube has space available to advertisers.
DV 360 or Google Ads
Airline Inc. would have to use one of Google's ad-buying tools to buy ads on YouTube.
Skip Ad
Airline Inc.
0:12 / 0:30
Advertisements for Airline Inc. could appear before or within a video.
Analytics 360
Source: the company’s website
Advertisers can use all sorts of buying tools and ad exchanges when conducting digital-ad buys on the open web, frequently mixing and matching Google’s products with those of competitors. But Google offers bundles and discounts to entice customers to use more of its products. By committing to a certain spend on DV 360, for instance, advertisers can receive Analytics 360 or a campaign-planning tool called Campaign Manager at a discount, according to ad-industry executives.
“What they do is discount technology pricing in exchange for minimum commitments to buy things on Google,” said Ari Paparo, chief executive of Beeswax IO, which operates an ad-buying tool that competes with Google’s DV 360.
“There’s room for them to advantage their own platforms or advantage their own properties,” said Ratko Vidakovic, a Toronto-based consultant in the digital-ad industry.
The complexity of how Google’s products weave together—and the opacity of its pricing—makes the process of buying online ads murky even to industry insiders.
“Even industry veterans don’t have perfect knowledge of how the whole thing works,” Mr. Vidakovic said. “It’s really just a labyrinth.”
Write to Patience Haggin at patience.haggin@wsj.com
Bagikan Berita Ini
0 Response to "Why Google’s Advertising Dominance Is Drawing Antitrust Scrutiny - The Wall Street Journal"
Post a Comment