[The Epoch Times, June 1, 2022](The Epoch Times reporter Song Tang comprehensive report) If you use Google to search for the name of a city, what will happen next? It may be that when you open a blank advertisement page of a website next, an advertisement for a hotel in the city you just searched for or an airline flying to the city will pop up, and the advertisement will also indicate that this is an “ad provided by Google”. .
With the advent of the digital age, Google has become the world’s largest digital advertiser. In addition to the search engine, Google has collected hundreds of millions of registered users from all over the world through its YouTube, Gmail, Google Play, Android and other free products to analyze their Interests and hobbies, accurate advertising.
You may wonder why Google ads are so timely and precise? Then let’s take a look at the process of digital advertising and you will understand.
The above figure outlines a digital advertising process. One end is the advertiser who wants more people to buy their products or services, and the other end is the consumer of the network terminal. The link between the two is the DSP (Demand) that serves the advertiser. -Side Platform) “demand-side platform” (advertising dealer), SSP (Supply-side platform) serving customers “supply-side platform” (advertising publisher).
Whether it’s a DSP, an SSP or an ad trader or publisher, Google dominates, which means Google is both a buyer and a seller, a broker and an exchange. The image below uses Australia as an example.
The figure above shows that in the entire digital advertising industry, Google occupies every link in it and is a one-stop service for upstream and downstream docking.
GoogleThe core division of digital advertising is Google AdX (i.e. DoubleClick, which Google acquired in 2008), dubbed “Goldman Sachs or Citibank owns the New York Stock Exchange”, and is heavily traded every day. When people click on a website or app, the second or less it takes to load the program, the blank ad space on the page that needs to be downloaded, is on the major “internet ad exchanges” (ad exchanges) Auction, the largest platform is Google’s Google AdX.
Compared to other tech companies, Google is the only player guaranteed to be present at every stage. Please see the image below.
And in every major link of the digital advertising industry chain, Google has absolute dominance.
The figure below takes the UK market as an example. In the UK market,GoogleThe highest share is publisher advertising services, with more than 90% of the market share. The lowest supply-side platform (SSP) and demand-side platform (DSP), also surpassed 50% market share.
Google occupies a dominant position in the entire digital advertising industry chain, and thanks to its powerful online tools, Google is one of the largest publishers, capable of collecting massive amounts of personalized customer information for accurate advertising. For example, Google streaming platform YouTube, browser Chrome, Map map, Gmail mailbox, e-commerce Shopping, Android operating system of mobile Internet platform, etc. As shown below.
Google is recognized as the world’s largest search engine, leading the search field, accounting for 92% of the global share (see figure). Google search advertising is its main source of income.
For example, if a “dishwasher” factory wants to advertise on Google, it can buy the keyword “dishwasher manufacturer”. As long as someone searches for these words on Google, the advertisement of the dishwasher manufacturer will be displayed. Google uses bidding and pay-per-click. The degree of competition for keywords is different, and the cost of clicks required for each keyword is also different.
Google’s total revenue in the first quarter of 2022 was $68.01 billion, of which $54.66 billion came from advertising, accounting for 80% of all revenue.Among them, search advertising revenue was US$39.62 billion (58.3% of total revenue), YouTube advertising revenue was US$6.87 billion (10.13% of total revenue), and advertising network revenue was US$8.17 billion (12% of revenue) (click for details).here).
Since Google owns the largest demand-side platform, supply-side platform, and exchange for digital ad auctions, 28% of U.S. digital ad revenue in 2022 will go to Google, according to emarketer (click for details).here).
Investigated by US and EU regulators
From the pictures above, we can see that Google dominates many aspects of digital advertising, which can be said to be both players, referees, and courtside staff. Some say it’s like having Goldman Sachs run the New York Stock Exchange, representing both buyers and sellers of stocks.As a result, Google has become the antithesis of US and EU regulators.monopolyfocus object.
Over the past 10 years, European regulators have launched three different countermeasures against Google.monopolylitigation. In June 2017, the European Commission fined 2.4 billion euros for Google Shopping to promote its own shopping business in search results. In March 2019, Google was fined 1.5 billion euros for squeezing out competitors. In July 2018, the European Commission fined Google 4.34 billion euros for using Android software to promote its own applications. In June 2021, the EU launched a formal antitrust investigation into Google.
In October 2020, the U.S. Department of Justice launched an antitrust lawsuit against Google, arguing that it has monopolistic behavior in search and advertising. That same year, attorneys general from 35 U.S. states joined the charges.
Dina Srinivasan, an antitrust researcher and consultant with the Texas Attorney General’s Office, explained in a New York Times article last year that a lack of competition has made Google the world’s largest digital advertising market, with ad revenue Most of it falls into Google’s pocket. In 2007, Google’s revenue from selling online advertising space accounted for only 35% of all advertising revenue that year. By 2020,Google AdsRevenue share has reached $146 billion.
As a result, various websites, apps and advertisers have to pay more to deliver goods and products to consumers through the ad space provided by Google. When you pay $1,000 for ad space on a news site, the site only gets $500 of it, and the remaining $500 goes to Google, and of course the consumer pays the difference.
Furthermore, Robert Epstein, a senior research psychologist at the American Institute for Behavioral Research and Technology,Investigation foundIn the 2020 US election, the voting reminders issued by Google are only sent to those who claim to be liberals, and no conservatives have received voting reminders.
“Digital Advertising Competition and Transparency Act”
On May 19, Republican Senator Mike Lee and other senators from both parties jointly introduced the Competition and Transparency in Digital Advertising (CTDA).
Mike Lee said on his Senate page: “Digital advertising is the lifeblood of the online economy, providing most free content and services, and Google and Facebook can use their unprecedented details of user data to gain control over digital advertising and prevent it. compete.
This monopoly means they are able to charge rent to every website and web company that advertises, essentially taxing thousands of American businesses and American consumers, undermining our privacy, censoring our speech, exploiting our children. I propose this bill as “the first step in rescuing the 21st century economy” from the grip of Big Tech’s monopolies.
“Google and Facebook have long dominated the digital advertising market at the expense of advertisers, publishers and consumers,” said co-sponsor Democratic Senator Amy Klobuchar. It’s time for a transparent ad tech industry where the best interests of customers are prioritized and companies of all sizes are able to compete. This legislation will set the rules to do this, restore and protect Competition in digital advertising creates a more level playing field and promotes fair and innovative development.”
The main contents of the Act are:
1. Businesses with more than $20 billion in digital advertising revenue cannot own a digital advertising exchange if they already own a DSP or SSP, or profit from digital advertising space.
2. No company can have both a DSP and an SSP.
3. Any company with more than $5 billion in revenue must act in the best interests of its clients and be prepared to accept new transparency requirements.
4. Require ad tech companies to anonymize consumer information and require advertisers to use the data only when needed to verify the company’s legal compliance.
5. Any ad tech company covered by the law must inform clients of “the source and nature of any payment or compensation received in connection with the transaction.”
Only Google, Facebook and Amazon currently meet the $20 billion digital advertising revenue threshold, so this proposal is mainly aimed at these three companies.
If passed, the bill would force Google to spin off its digital advertising business within a year. Since Google’s revenue model relies heavily on advertising, 81% of its revenue comes from advertising. As such, the bill threatens the main source of revenue and business model of Google parent company Alphabet.
In fact, the bill could require Google to divest a significant portion of the digital advertising business it built after it acquired DoubleClick Inc. in 2008, Mike Lee told The Wall Street Journal. “It’s a huge business,” he said. Google’s “web” business, which includes tools used by third parties to buy and sell ads, will generate $31.7 billion in 2021.
Google spokeswoman Julie Tarallo McAlister said, “Google and many rival advertising tools help U.S. websites and apps fund their content, help businesses grow, and help Protect users from privacy risks and misleading advertising.”
“Breaking these tools hurts publishers and advertisers, reduces ad quality, and creates new privacy risks. In times of rising inflation, this will hinder small businesses from finding simple and effective ways to grow online. The real problem is poor data. Brokers, they threaten the privacy of Americans and send them tons of spam.”
“And, with rising inflation, it’s going to put small businesses looking for a simple and effective way to grow their networks in a bind,” she said.
The Wall Street Journal quoted antitrust experts as saying that if passed, the law would be the most significant change to antitrust law in a generation, amending the 1914 Clayton Act, which constituted One of two laws that underlie U.S. antitrust law, which has not been amended since the 1970s.
Antitrust experts say that while the Clayton Act and its 1890 Sherman Antitrust Act gave antitrust enforcers broad latitude in combating anticompetitive behavior, in recent decades Over the years, it has been interpreted according to the narrow consumer welfare standard, that is, it only asks whether the price of consumers is raised. But the rise of Big Tech, the many free services and mass harvesting of personal data, and the fight for freedom of speech challenge that consensus.
Daniel Castro, vice-president of the Information Technology and Innovation Foundation, said the legislation could “significantly disrupt the online advertising ecosystem”.
Castro isn’t sure how much good it would be to break up ad platforms, saying that online ad platforms provide businesses with complete, closely-collaborated services, and if tech companies are broken up by legislation, the market will have a hard time catching up anytime soon.
Online ad buying is very efficient now compared to when it started 20 years ago, he said. The reason why it is so different is because the (industry chain) is complete.
Responsible editor: Lin Yan#