Google’s impact on online ads

Back in March this year, the Australian Competition & Consumer Commission (ACCC) – Australia’s consumer watchdog – launched an inquiry specifically focused on the advertising technology (or ‘ad tech’) sector. The ACCC released its report this week, ultimately finding Google has too much control over how ads are delivered on the internet. 

The inquiry found 90% of ad impressions (an ad impression is when an ad is shown on a search result page or other sites) passed through at least one Google service in 2020. 

Notably, it was reported that “Google’s dominance is underpinned by multiple factors including its data advantage, access to exclusive inventory and advertiser demand, and integration across its services.” Ultimately, this means Google is able to use a range of factors to further its monopoly, including access to user data and its previous acquisitions of companies like DoubleClick, Admob and YouTube.

The ACCC noted Australia’s competition laws aren’t robust enough to address the competition concerns created by Google’s market position, and the ACCC should be given further powers to develop specific rules in response.

Google says otherwise 

Google says that its services deliver “… benefits for businesses and consumers; helping publishers fund their content, enabling small businesses to reach customers and grow, and protecting people online from bad ad practices.” Google further argued that it has “supported over 15,000 Australian jobs and contributed $2.45 billion to Australia’s economy annually.” However, the company recognised it needs to “continue to work collaboratively with industry and regulators to support a healthy ads ecosystem.”

How does this affect consumers? 

ACCC Chairman Rod Sims said Google’s dominance ultimately leads to consumer price inflation, saying “we are concerned that the lack of competition has likely led to higher ad tech fees. An inefficient ad tech industry means higher costs for both publishers and advertisers.” Online advertising is becoming an increasingly important part of how brands talk to us – and the ACCC will be closely monitoring this emerging sector in the years to come.

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