Why it matters to you
Google may be favoring ads for its own products and services over others in search results.
Ads for Google’s own products appear higher than ads for third-party products on the search giant’s own websites. That’s the result of an analysis conducted by market research firm SEMrush in conjunction with The Wall Street Journal, which revealed that Google’s ads appeared prominently on its webpages a “vast majority” of the time.
Ad placement is determined by a formula that ranks ads based on factors like quality, relevance to the search term, prior click rate, and its landing page. The higher the quality of the ad in question, the more likely it’ll appear on Google search results.
Google product ads dominated the search giant’s webpages 91 percent of the time.
The Wall Street Journal analysis, which comprised more than 25,000 searches on 25 different terms, found that Google product ads dominated the search giant’s webpages 91 percent of the time. In 43 percent of the searches, the top two ads were for Google products. Even more damning: In 99.9-percent of queries for “phones” and “smartphones” resulted in a minimum of three ads promoting the Google Pixel list above the search results.
SEMrush took steps to ensure the tests accurately reflected human browsing habits. To prevent caching or tracking didn’t interfere, the firm used a desktop version of Google Search that didn’t tailor results to browsing history. And it blocked cookies, the small files on a user’s computer that store search history, site preferences, and other usage data.
More: Google Pixel XL review
“The results show how Google uses its dominant search engine to boost other parts of its business and give it an edge over competitors,” The Wall Street Journal reported, “which include some of its biggest advertising customers.”
Google denies the allegations
The ads that appear above Google search results are chosen according to an automated ad auction that the search engine conducts every fraction of a second, Google said. The auctions, which were estimated to have generated $79 billion last year, determine which ads are featured most prominently and how much advertisers pay.
Google denies that it artificially boosted the visibility of its product ads.
“We have consciously and carefully designed our marketing programs to not impact the ad auction,” a Google spokesperson told The Wall Street Journal. “All our bids are excluded from the auction when determining the price paid by other advertisers, and we have strict rules and processes — set to tougher levels than our customers — to govern the use of our own ads products.”
But advertisers told The Wall Street Journal that Google’s ads can affect the price, placement, and performance of other firms’ ads. And they point out that a number of Google ads disappeared from search results in mid-December, after The Wall Street Journal shared its findings with the company.
The study follows a massive advertising campaign for the search giant’s branded smartphone, the Pixel. Google spent a reported $3.2 million in TV ads in the first few weeks of the phone’s availability, and some ad executives suggested that the search giant could spend hundreds of millions more.
It’s likely to raise the ire of European Union regulators, who have accused Google of monopolistic search practices in the past.
Last year’s EU allegations
Last year, the European Union charged the Mountain View, California-based giant of “abusing its dominant position” by “systematically” promoting its own smartphones, tablets, laptops, app store, and music service, and media platforms on its properties.
Google denied the charges.
“While Google may be the most used search engine, people can now find and access information in numerous different ways — and allegations of harm, for consumers and competitors, have proved to be wide of the mark,” a spokesperson for the company said.
In July, the European Commission — the institution of the EU responsible for proposing legislation, implementing decisions, and upholding the EU treaties — announced a third round of anti-trust charges against Google. If found guilty of violating Europe competition laws, it could be on the hook for upwards of $7 billion in fines.