What would the potential breakup of Google mean for premium digital publishers?
As federal courts consider remedies to address Google’s monopoly in search and whether Google’s ad tech business constitutes a similar monopoly, the landscape for digital publishers will undergo substantial changes.
While there could be some short-term negative effects for publishers if Google is broken up, the long-term positives are much more encouraging.
One of the primary impacts would be on advertising revenue. Google’s dominance in digital advertising means many publishers rely heavily on its platforms for ad placements as well as demand.
A breakup could lead to a more fragmented market, with multiple smaller entities competing for ad space. This will almost certainly result in increased competition and higher ad rates for publishers.
Marketplace-wide changes
Marketers need to reach consumers. Regardless of Google’s position in the supply chain, that core need will endure. So the overall demand levels will continue apace.
There might be an initial expansion in the demand ecosystem and overall supply chain. But such an increase in demand would bring increased transparency into the ad impressions that marketers are bidding on, as more demand platforms compete for ad budgets. The overall effect of this vastly increased transparency for both publishers and advertisers will be higher prices.
At the moment, there is an overwhelming amount of false or very low-value impressions in the programmatic marketplace. Made-for-advertising sites and the ever-present bot farms are major contributors to this problem, but even darker practices endure.
The lack of real transparency caused by one platform’s dominance of the supply chain gives marketers the perception that there is a near limitless supply of quality ad placements. This has never been the reality. One need only consider advertisers’ near-total ad blocking on news sites and the seemingly negligible impact that blocking has had on the amount of premium supply that’s perceived to exist in the supply chain.
A more transparent marketplace would clearly benefit the marketers who are paying for the ad impressions as well as the publishers who are supplying them. CPMs would almost certainly rise with more platforms competing, but value would increase exponentially.
These false assumptions around supply are the cornerstone of the dark side of ad tech – the original misstatement that underpins marketers’ “conventional wisdom.”
If you start with fundamentally wrong assumptions about supply, it only goes to reason that your final tactics will be misguided.
Google’s breakup would, naturally, also have a significant impact on search traffic. If the breakup leads to changes in how search results are generated or displayed, publishers may see fluctuations in their traffic and audience engagement.
While the initial disruption could be painful for publishers, the end result would be a much stronger ecosystem with more value going to content creators, not middlemen.
And what is the alternative? The industry has already been going through wave after wave of SEO changes with predominantly less advantageous outcomes from content creators. Google ushers in these search changes on a regular basis, without notice or explanation.
Additionally, the breakup could affect the relationship publishers have with Google’s AI technologies. Google’s AI algorithms already play a crucial role in content discovery and distribution. A breakup could lead to changes in how these technologies are used, potentially giving publishers more control over their content and how it is presented to users. This could be an opportunity for publishers to negotiate more favorable terms and establish industrywide standards for training AI models.
Dare to dream
What are the chances that change will come and Google will actually be broken up? The likelihood is very high. Google has not been playing fairly for some time. It’s a classic case study for why we have strong guidelines around monopolies. And it’s not the only platform in need of reform.
While a Google breakup could present short-term challenges for premium digital publishers, it would, at the end of the day, offer substantial opportunities for increased revenue, improved search traffic management and greater control over content distribution.
Publishers will need to adapt, as always, to the changing landscape and explore new strategies. But most will undoubtedly come out in a much better place. As will marketers!
Injecting government control into open markets is always dangerous … unless, of course, you are dealing with a monopoly. And the idea that Google is not a monopoly in search and advertising is farcical.
“The Sell Sider” is a column written by the sell side of the digital media community.
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