So, it’s been revealed that Google has been overcharging advertisers for clicks. Now, I don’t mean clicks in terms of ad fraud and people clicking ads and bots and things like that, wasting your budget. No, I actually mean Google have cranked up the dial and charged advertisers more for their clicks than they should have paid.
They’ve cheated the auction to make more money for themselves. So now that this story has been revealed, what we’re going to look at today is how Google actually did this, what this means for advertisers, and what does it mean for the future of Google Ads as we know it. Okay, so what’s happened? Google is currently fighting yet another antitrust lawsuit against the US government because of fears around their monopolization of the search market.
Now, Of course, Google is basically a monopoly. I don’t know how much there is to prove here, but this case has unveiled this crazy story. This story actually focuses more around Google’s relationship with Apple because they’ve basically paid Apple off to become the default search engine for iPhone, meaning Google’s monopolization of the search market is insane.
90 percent coverage of all search with this deal because how many iPhone users are there across the world and the US in particular. Loads. So this is a problem and the Justice Department are trying to resolve this monopolization by Google. So with the DOJ’s concern that Google have made it basically impossible for anybody to compete in the search engine space, and of course, that’s true because when you think about Bing and ChatGPT and the power they had getting first with the AI chatbot, they actually lost market share.
So Google’s monopoly is firm. It is solid. It’s not going anywhere without some intervention, but that’s not the interesting bit. The revelation that came out of this case is the interesting part, which is that Google frequently cranks up the dial on ads and charges up to 5 percent more for clicks than they should do.
And even worse than that, for some queries, they charge up to 10 percent more than they usually would. So why have Google done this? They have the power to do it. I think we all suspected they might be doing this. So Jerry Dishler, the individual who released all of this information during the proceedings, actually said they were basically shaking the cushions to find some extra cash in order to hit revenue targets on their half year and quarterly year revenues.
This was all happening back in 2019 and these emails have now been released as part of this trial. So Google are essentially… Shaking down advertisers who are using the platform in good faith in order to try and hit their targets and their numbers. So this internal email sent by Jerry to the Chief Financial Officer actually said, If we don’t meet quota for the second quarter in a row and we miss the street’s expectations again, which is not what Ruth, who is the Chief Financial Officer at Google, what she signaled to the street, so we will get punished pretty bad in the market.
So essentially, all this means is Google told Wall Street things are great, they weren’t as great as they said they were, so they cranked up the dial on the bids in order to make up that shortfall to tell Wall Street, actually, things are pretty good. So when Jerry was quizzed about this during the proceedings of the trial, he said that they were just getting creative in order to hit their quota.
That is not creativity, that is fraud. And yes, we all suspected this could be the case, but it’s kind of comforting knowing that it’s now out there in the open and completely confirmed that we’re not crazy. Google do crank the dial up sometimes in order to hit their quota. And with campaign types like Performance Max, which is a complete black box, we don’t know exactly what’s going on within it, all we can do is direct it and guide it.
This gives Google even more opportunity to do things like this because we can’t see what’s going on behind the scenes. Also, don’t forget that this email that was leaked back in 2019, it can’t be the first instance. Whenever somebody gets caught doing something and they’re very confident with it, and they’re comfortable doing it without any pushback, it’s very unlikely that it’s the first time they’ve done this.
Now, I’m not accusing Google of having done this in the past. even further back than 2019, but it’s pretty likely. So where does this leave us? Well, there are two questions remaining. Number one, do we get refunds as advertisers? Do we get redress for this issue that Google has caused us by making us pay more for traffic than we normally would have?
And the second question is, should we be put off using campaign types like Performance Max, which is a complete black box that we can’t see into and gives Google more opportunity for market manipulation? Well, let’s get the first point out the way straight away. I very much doubt we will get refunds on any increases Google has done to increase the bids at the point of auction.
to get more revenue into their pockets. I very much doubt they will pay a penny of that back. Now there might be a situation where a particular law firm takes forward a class action lawsuit that advertisers could sign on to, which could be one of the biggest in history, but I very much doubt it. I think Google have probably got away with this and there’s not enough evidence behind it yet for a wholesale.
refund for all advertisers, because we don’t even know when this happened, how many auctions it occurred in or any other details. So I think that’s highly unlikely. And the second question was, should you trust performance max as a campaign type? Because you can’t tell what’s going on behind the scenes and Google may have more potential to increase the bids.
Well, ultimately, there’s nothing you can do about it. If you’re getting results from Performance Max, continue using it, because ultimately, this is where Google is going. This is the direction of travel they’re going in, and it’s better to get your hands on Performance Max and use it as a campaign type.
Start getting results, because when you’re forced to use it, you’ll be lost and floundering and wondering what on earth you need to do to get results. So Google will continue the fight to keep their monopoly, and this Department of Justice case It’s probably going to get beaten away by Google, and the reason I say that is because back in the day, Microsoft went through a very similar thing when they basically owned the personal computer market, and they won.
They basically won their antitrust lawsuit, and nothing became of it. So there’s no reason to say Google won’t beat this case as well. But with that said, we can always hope. I really hope that something comes of this, because Google is a monopoly. It does need breaking up, and I think it’s unfair to advertisers and consumers alike, because of course, if advertising costs become less profitable, those costs are passed on to, yes, you guessed it, the consumer.
So this affects everybody in Google’s ad ecosystem, and I really hope that the Department of Justice can do something about this, because Google does need breaking up. But what do you think? Do you believe that Google are perfectly fine doing what they want? It’s their business and they can do whatever they want and we as advertisers just have to deal with it?
Or, like me, do you think Google does need breaking up because they’re way, way too powerful? Let me know in the comments. I’ll be really interested to hear from you. I reply to pretty much all comments on all of my new videos. Like this video if you like it. Don’t forget to subscribe to the channel. And if you need help with your digital marketing consultancy particularly, around Google ads, especially with all of these challenges, then hit me up, head over to Darren-taylor.com and I’ll work as your Google Ads Freelancer and we’ll work together on your campaigns.