Why Google has never looked more fragile as an advertising channel

It has been a few months since the DOJ declared to the world that Google’s monopoly over search has been breaking US anti-competitive laws.  

The latest developments in the landmark trial arrived at the end of November, with the DOJ laying out four clear proposals for the federal judge to consider. To redress the balance, 

Google must: 

• Sell Chrome. 

• End the Apple partnership of which Google pays billions of dollars every year to be the default search engine on Safari ($20 billion in 2022). 

• Share a wealth of proprietary search data, i.e. data on every single query connected to an ad. 

• Ban investment in new browser/search investments. 

This is all geared towards increasing transparency and control for advertisers, potentially giving greater access to industry gold dust: data. Good news for everyone – except for Google, which is facing losing billions of dollars. Chrome is worth up to $20 billion alone, while its ad-driven search engine business made around $175 billlion in revenue in 2023. 

In reality, it is going to take years for anything material to happen off the back of this ruling. Google is expected to counter with its own proposals before the end of the year, meaning any court hearings or decisions likely won’t happen until mid-2025. Then there are all the legalities and practicalities to factor in. 

What is clear at this moment in time, is that Google is looking more fragile than ever as an advertising channel. While waiting for the judge’s gavel to come down – whether to enforce some, all or none of the proposals – advertisers would be wise to seize the window of opportunity to mitigate risk by putting an increased focus on testing other channels and tracking solutions.  

The Apple question

Let us start with the proposal most likely to be enforced: ending the Apple partnership. This will inevitably make way for competition from other search engines and gen AI platforms - including Apple if it goes on to create its own, which seems highly likely. This would, however, require a lot of investment in technology and resources when Apple is already facing quite a chunky revenue gap should the partnership end. Either scenario could impact its own profitability and consequently increase prices for consumers.  

Despite this, the overall impact on the search market would be positive. If Apple decides to remove Google as the default search engine and make its own play for the market, the industry will benefit from an increase in volumes on a platform that isn’t Google. Users will  also have greater choice over their default search engines, potentially increasing personalisation and innovation. An Apple search engine may, however, need to navigate its own data privacy issues. 

Then there is the matter of Google potentially selling Chrome, which will hinder the industry’s capability to track users online. Luckily, many will already have enhanced tracking strategies in place having prepared for the depreciation of third-party cookies, which Google U-turned on earlier this year. Campaign’s CMO Outlook 2024 evidences the shift towards prioritising first- and second-party data, finding while 22% of marketers view third-party data as ‘very important’, this rises to 43% for second-party data and 88% for first-party data. 

There is, however, an urgent need for a more diverse mix of measurement solutions to ensure advertisers can track and target effectively. This has become particularly cumbersome in a post-iOS14 world, which has severely limited apps’ ability to measure the performance of digital campaigns. Recast’s ‘Attribution Stack’ provides a useful map of the attribution landscape, ranking measurement methods in terms of sophistication and how they relate to each other. 

I have also seen a trend towards combining first-party data with propensity predictive models, thus enabling more sophisticated targeting. 

Data sharing debacle

The potential sale of Chrome hangs another major question mark over Google’s future profitability. Given Chrome's biggest asset is the data it collects, which Google uses to power its advertising business, if Google’s ad business is no longer allowed to share data with Google, could it stand alone as a profitable business? 

All things considered, I am not sure it could – at least not without sharing heaps of data with another advertising company. What I am certain about is that sharing data – another term stipulated by DOJ – would be a great thing for advertisers. They would have access to far richer search query data and we’d be able to see all the rubbish search terms our ads appear for and, ultimately, cut out the wastage. 

There is no doubt that Google is a powerful and effective advertising channel, but the prospect of a more level playing field – where competition is fair and there is space for choice and innovation – is an exciting one. If a new era for digital advertising is on the horizon, we have a fresh chance to rebuild it in a way that works better for everyone, for advertisers and consumers alike. 

Robert Simpkins is the managing director at Propel Digital. Simpkins contends that a changing digital world means that Google cannot stand alone as a profitable business without sharing data with another advertising company.

The opinion piece first appeared on Campaign's sister publication Performance Marketing World.