Although a vague aura of Californian hippy still hangs over Google, it’s important to realise that almost 100% of the money they make comes from PPC advertising.
So in one respect Google is just like any other media owner, trying to make a buck from people like you and me who want to promote our products.
But let’s look at this in more detail. By most estimates, Google owns between 85% (desktop) and 92% (mobile) of the market for search. And it’s on those millions of pages of search results that Google places most of its (context-sensitive) ads.
“The fact remains: in every bidding war, only Google wins”
By any standards, those market shares make Google a monopolist: it owns the only important search medium in town, and can charge you what it likes for the privilege of being there.
Of course, the bidding system for each and every keyword disguises that fact brilliantly: the amount you pay is entirely dependent on how much your competitors are prepared to bid against you. But the fact remains: in every such bidding war, only Google wins.
“AdWord’s are simply classified ads that happen to appear online”
Some businesses play the game of Google adwords brilliantly, optimising and enhancing their PPC strategies to make a handsome return on their investment.
But every organisation that advertises on Google should understand that adwords are simply classified ads that happen to appear online. They neither create demand nor build genuine awareness: they simply fulfil a demand that already exists. This of course is obvious: every potential ‘clicker’ has already searched for the relevant keyword.
But therein lies the true tyranny of Google. Rather than building your brand or creating demand with your website and your ads, instead you’re siphoning off ever-increasing sums to Google – in the process cementing their highly profitable monopoly.
But, you know, ‘do no evil’ and all that, eh?
Update: Will Google face Antitrust proceedings on both sides of the Atlantic? Der Spiegel reports (in English).
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