FIGHTING BACK
Advertisers seeking ways to cut search giant Google down to size
NEW YORK “Where’s the best place to hide a body? The second page of a Google search.”
The gallows humour shows that people rarely look beyond the first few results of a search, but Lee Griffin isn’t laughing.
In the 13 years since he co-founded price comparison website GoCompare, the 41-year-old has tried to keep his company at the top of search results.
That’s put him on the front lines of a battle challenging the dominance of Google in the search market — with regulators in the U.S. and Europe taking a closer look.
Most of the sales at GoCompare, which helps customers find deals on everything from car insurance to energy plans, come from Google searches, making its appearance at the top critical.
“Google’s brought on as this thing that wanted to serve information to the world,” Griffin said in an interview from the company’s offices in Newport, Wales.
“But actually what it’s doing is to show you information that people have paid it to show you.”
MARKET DOMINANCE
GoCompare is far from the only one to suffer from Google’s search dominance. In the U.S., IAC/InterActive Corp., which owns Tinder and ride-hailing company Lyft, have signalled Google’s stranglehold on the market.
The European Union has also been trying to rein in Google, fining the company 1.5 billion euros (US$1.6 billion) this year for thwarting advertising rivals. In the U.S., there’s a rising chorus of voices demanding Google be cut down to size. Somehow.
SEARCHING GAME
The case of GoCompare shows just how difficult it is to win the search game.
When customers look for the company’s name after typing in a query for auto insurance, what appears is a combination of paid advertisements, Google’s own blurbs, and then so-called natural search results, a list of what the tech giant deems are the most reliable sources of the information.
Nowhere is Google’s power more evident — and potentially damaging to businesses — than in the market for “branded keywords.”
This is where businesses buy ads based on their brand names. So GoCompare bids on the word “GoCompare,” and when people search for that, Google runs an ad at the top of results usually linking to the company’s website.
‘ODD PLACE’
Some businesses say they have to buy these ads — whatever the cost — because rivals can bid on the keywords, too.
If GoCompare decides not to bid for its own brand, Google can legally sell the ad placements with its name to a competitor, with the top bidders getting the best spots on the page and taking away customers.
The price GoCompare has to pay for search terms that use its brand has more than doubled since 2016, with a real surge in the last 12-18 months, parent company GoCo Group Plc Chief Executive Officer Matthew Crummack said.
LONG FIGHT
Google has real-time pricing for terms like “auto insurance” that GoCompare relies on for sales. Every time someone searches for that term, the prices refresh, driving a tough — and pricey — battle for the top spot between GoCompare and rivals like Comparethemarket. com and Moneysupermarket.com.
“Google must be rubbing their hands together thinking, ‘This is great,’ ” when competitors battle it out for top spots, Crummack said.
“Every time that happens, the price goes up, and they don’t have to do anything.”
Google defends its system, saying “in order to offer more choice when searching for products or services, we allow competitors to bid on trademark terms.
“However, we want to balance the interest of both consumers and advertisers, so we allow businesses to file a trademark claim and then we’ll block competitors from using their business name in the actual ad text.”
The company also said it’s not just the top bidder, but the top bidder with the most relevant information that gets the coveted spots.
Still, GoCo is looking for ways reduce its reliance on Google, studying a subscription model under which customers sign up for a service that automatically searches for the best rate when policies are due for renewal.
It’s also banking on regulators to eventually fix the skewed market, although Crummack doesn’t see that happening anytime soon.
“It’s not something that helps trading next reporting period,” he said.
Bloomberg