A Q&A with adMarketplace’s Chairman & CEO Jamie Hill on the recent study that suggested Google harms consumers by skewing search results.
According to an academic paper by Tim Wu, Michael Luca, and the Yelp data science team, Google’s algorithm manipulates search results to favor its own web properties over organic listings. Adotas recently sat down with adMarketplace’s Chairman & CEO, Jamie Hill, to get some insight on the implications of this claim.
Q: What is the big claim here? Why is this significant?
A: This study suggests that Google intentionally favors its own search results over competitors. If true, this is a big deal because Google can no longer claim to deliver the most relevant results. Google won the search engine wars because it developed a way to deliver the most relevant results – it’s Google’s secret sauce – and this move taints the secret sauce.
Q: Why would Google do this?
A: Google.com makes money from search ads, not organic listings. In the last few years, Google search ads have been consistently taking up more above-the-fold real estate. Google is monetizing its entire site above-the-fold. However, it needs to serve organic listings to keep users coming back to the site.
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Now, Google found a way to ensure that it can make money off organic listings, even if it isn’t directly charging for them. According to the study, Google is reserving top “organic listings” for sites that it owns, ensuring that it makes money from search ads, and search results, above-the-fold. This also increases advertiser pressure to buy Google ads because clicks that they used to get from organic listings may decline.
I recall one study showing that over 70% of searches on Google led to a page one organic click. So, everyone knows how important top organic real estate is.
Q: Who does this hurt?
A: Everyone. Google is founded on the idea of only serving the best search results.
Google execs claim over and over that its algorithms always list the most relevant results. This study suggests otherwise. If Google is favoring its own results over the most relevant results, then all web properties that are not owned by Google are at risk.
More importantly, this hurts the user if they can’t access the best results. If Google builds products that work for the user, like maps, it’s fine, but if it pushes copycat products that are chasing users, like Plus, this could have devastating long term effects for Google.
Q: How could this be devastating?
A: Google became a multi-billion dollar company because it built the best search engine in the world, and then found a way to really capitalize on search by introducing the most effective form of direct advertising in existence. A search engine has to deliver content that its users find useful. Google’s value is based on user trust. People believe that Google is the absolute best source for information. If people lose trust in Google’s ability to deliver solid results, they will stop using Google’s service, and Google’s value for advertisers will diminish.
Q: Does this hurt advertisers too?
A: In part, it does because it makes organic listings increasingly irrelevant. Good SEO becomes moot when Google games its algorithms to favor its own property. At some point, Google ceases to be a search engine and becomes an ad engine. This hurts everyone involved, because Google’s core value depends on relevant results and user trust.
Q: Does this have antitrust implications?
A: Absolutely. Google already controls a substantial majority of Internet search traffic, but now it is using this influence to favor its own products over competitors. If further investigation supports the findings of this study, I’d expect this information to heavily impact the EU antitrust suit.
Jamie Hill, Chairman & CEO, adMarketplace: adMarketplace was founded by Jamie in March of 2000. Jamie’s primary duties as Chairman and CEO include setting the overall strategy, direction and vision for adMarketplace. Prior to adMarketplace, he was an executive at CBS Broadcasting. Before joining CBS, Jamie worked at Telerep and was responsible for developing marketing strategies for Fortune 500 advertisers. Jamie is a proud University of Southern California Trojan.