Google asks you to share a lot of information about yourself and your business with it. For example, depending on the Google products you use, you share:

  • All of the sites you surf (if you use the Google Toolbar, Google places a cookie on your computer that won’t expire for 50 years!)
  • The contents of your emails (if you use GMail)
  • The files on your computer (Google Desktop)
  • Your best keywords (AdWords)
  • The behavior of people going to your Web site (Urchin)
  • The structure of your Web site (Google SiteMaps)
  • Which people actually convert for you (Conversion Counter)
  • How you intend to use Google’s API (Google now wants to visit you three times a year to make sure you are using the API properly

On the other hand, Google doesn’t like to share with you. Among the things Google refuses to share:

  • How they determine whether your site is relevant for organic results
  • How much you have to pay for top position on AdWords
  • How the content network works (how do you know when you are going to show up)
  • How quota for the AdWords API is determined
  • How Google determines whether a click is click fraud
  • What your overall clickthrough rate is (Unbeknownst to most people, the CTR that shows up on the AdWords API is Google-only, it does not factor in the CTR on the Google distribution network.
  • Why certain ads get rejected
  • Financial projections (if you are shareholder)
  • If you live in China, Google has decided not to share all relevant information with you at the behest of the Chinese government
  • Originally, Google didn’t even tell consumers that PPC ads were ads – until the FTC threatened to sue, hence the “sponsored listing” tag you see today.

In a nutshell, Google doesn’t like to share, but they are more than happy to demand a lot of personal and financial information from you.

That doesn’t sound very fair, does it? After all, every since we were kids, we’ve learned that the Golden Rule is “do unto others and you would have done onto your self” or “share and share alike” or (perhaps in a different vein) “show me yours and I’ll show you mine.”

Right now, though, Google doesn’t have to share, for two reasons. One, consumers don’t realize how much information they are freely giving to Google and how little Google is giving back. I was out to dinner last night with a friend and he posed the following hypothetical: tell a consumer that they will need to share their email contents, searching behavior, Web usage, desktop files and small business marketing strategy with Microsoft. How would they respond? Of course they would go crazy. But tell them that Google already has that information and they would probably shrug.

After all, Google still has the reputation of “doing no evil.” If you asked a consumer (or small business professional) to use adjectives to describe Google, you’d get responses like “innovative”, “fun”, “relevant” and “best of breed.” Ask the same person to describe Microsoft and you might here “evil”, “monopoly” and “big brother.”

As long as consumers and advertisers have it in their head that Google is their friend, the outrage against Google’s asymmetry of information will be limited if any.

The second reason Google doesn’t have to share is because they simply don’t have to. Especially in the case of search engine marketers, SEM media buyers have no choice but to use Google and follow Google rules. For the average SEM campaign, Google probably accounts for 50-70% of cost and profit. Failure to follow Google’s rules will get you kicked out of AdWords, which will destroy your profit stream overnight.

So if Google wants to, they can continue to ratchet up the demands on their advertisers. If they want to charge a $50 annual “maintenance fee”, they could do that. They could start charging for API usage (too late!), they could categorically ban types of sites they don’t like (for example, lead generation companies could someday be banned), they could set arbitrary minimums for keyword prices (too late there too!), and on and on.

In essence, because there is a lack of public or business outcry, because Google still has a great reputation as an ethical company, and because Google has a virtual monopoly on search engine marketing, Google has absolutely no incentive to share with you, but absolutely no barriers to ask you for more and more data.

Again, this may not concern you that much, but ask yourself how you would feel if you replaced the word “Google” with “Microsoft.”

Ultimately, I do believe that Google’s aura will start to wear off over time. People forget that Microsoft was once associated with words like “innovative” and “revolutionary.” But when Microsoft got too big and started throwing its weight around, the tide changed.

And that actually begs an interesting question: if Google has a 70% or greater share of the SEM industry, if SEM is becoming an increasingly important foundation of every marketer’s marketing budget, and if Google uses its market position to make asymmetric demands on marketers (share with us, pay us for additional services, we can ban whoever we want without explanation), will that someday put Google on a collision course with the Department of Justice’s Antitrust division? Will Google someday have the same ‘evil’ brand that Microsoft has today?

As I see it, that’s not such an unreasonable scenario (well, assuming that the DOJ still enforces the Sherman Antitrust Act, that is). Again, when you have a company that is gradually collecting reams of personal information about its users, has a monopoly position in a growing and lucrative industry, shares as little information as possible with anyone outside the company, and has even started putting up competitive barriers (i.e., with the AdWords API – you can’t display Yahoo and Google info on the same page of a commercial bid application), it doesn’t seem like a pipe dream anymore.

These days, I know a lot of marketers who are actually rooting for MSN’s AdCenter to be a resounding success. They’re hoping that MSN can take some of the pie away from Google (Yahoo clearly hasn’t been doing that lately). Any battle in which Microsoft is portrayed as David instead of Goliath is one where there’s already a formidable Goliath.

1 Comment

  1. Mark McGuire June 8th, 2006

    Great post. We have been asking some of the very same questions at Jellyfish.com. I think there will be a tipping point when consumers in particular start to realize how much Google makes from their attention.–>

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.