Google Raised Ad Prices To Hit Revenue Goals, Google Executive Said

Sep 20, 2023 - 7:31 am 7 by
Filed Under Google Ads

Google Money Logo

Jerry Dischler, Vice President and General Manager at Google, said under oath in 2020 that Google tuned its ad prices to meet its revenue targets. Ad prices went up 5% to sometimes 10% without communicating those changes to advertisers.

This news comes from Bloomberg who reported "Google has tweaked its advertising auctions to ensure it meets revenue targets, sometimes increasing ad prices by as much as 5%, an executive for the company testified Monday at a federal antitrust trial."

The report says that Google "frequently makes changes to the auctions it uses to sell search ads." Even when those "tunings" impact ad prices, Google typically doesn’t tell advertisers, Dischler testified, according to Bloomberg. "We tend not to tell advertisers about pricing changes," he said.

"My goal was to get creative so we could meet our quota," Dischler said. Google's team discussed ways of "shaking the cushions" to find more money from the ad system.

The PPC industry is not happy but also not surprised by this:

Dischler said he didn’t know if the change led advertisers to place higher bids, but it increased Google’s revenue.

One change that increased Google’s revenue, known as RGSP, switched the auction so the runner-up was given the top advertiser slot and the actual winner the second spot, according to Dischler. Oftentimes major advertisers like Amazon.com Inc. or Booking Holdings Inc. win any ad auctions where they bid and take the top slot, Dischler said. With RGSP, “we flip them,” Dischler said. “Otherwise, Amazon always shows up on top.”

Forum discussion at X.

Update: We got a statement from Google: "Search ads costs are the result of a real-time auction where advertisers never pay more than their maximum bid. We’re constantly launching improvements designed to make ads better for both advertisers and users. Our quality improvements help eliminate irrelevant ads, improve relevance, drive greater advertiser value, and deliver high quality user experiences."

 

Popular Categories

The Pulse of the search community

Follow

Search Video Recaps

 
Google Weekend Volatility, Google On Search Leak, Elizabeth Tucker Interview & Apple Intelligence - YouTube
Video Details More Videos Subscribe to Videos

Most Recent Articles

Search Forum Recap

Daily Search Forum Recap: June 18, 2024

Jun 18, 2024 - 10:00 am
Google Search Engine Optimization

Google: #s In Google Search Console Reports Are Unrelated To Canonicalization

Jun 18, 2024 - 7:51 am
Google Maps

Google Maps Adds Edit & Post Button To Business Profile Listing

Jun 18, 2024 - 7:41 am
Google Search Engine Optimization

Google: Our Search Results Do Not Always Show Original Source

Jun 18, 2024 - 7:31 am
Bing SEO

Bing Webmaster Tools Clickthrough Rate Over 100%

Jun 18, 2024 - 7:21 am
Google

Google Search Tests Black Sitelinks

Jun 18, 2024 - 7:11 am
Previous Story: Google Site Names Issues Continue For News Tab?