This past August 2024, a U.S. District Judge ruled the Google search engine is a monopolist and has been illegally using its market dominance to drive up ad sales, stifle innovation and prevent competitors from operating in the market. The judgment comes after a trial between the U.S. Justice Department versus Google LLC began last year, after the lawsuit was first filed nearly 4 years ago. The ruling states Google has an 89.2% share for general search services, which increases to 94.9% on smartphones.
With Google’s gargantuan presence, businesses have no choice but to play nice on the search engine in order to capture leads and engage customers through search. For online advertisers, Google’s pay-per-click (PPC) paid advertising channel also dominates, with nearly two-thirds of all PPC ads being purchased on Google.
Impact on the Advertising Landscape
While Google’s president of global affairs said the company intends to appeal the landmark ruling, in just a couple weeks after the first ruling, Google is facing more backlash and legal ramifications. In September 2024, the search giant faces trial in a second antitrust case, where the U.S. Department of Justice will challenge the brand’s advertising model. The case will examine how Google advertising impacts news publishers and is part of the current U.S. administration’s antitrust law efforts, particularly surrounding Big Tech.
Across the pond in the U.K., regulators declared in September 2024 that Google has been using its digital advertising dominance to thwart the competition. All the legal battles the search giant is facing could result in more than $100 billion in payouts.
Potential Industry Transformation
What is even more significant than potential fines is that a breakup of Google could reshape digital marketing by fostering competition and innovation. Anyone who works in tech knows disruption is the norm.
Instead of fearing what a Google breakup could mean for online advertisers and SEOs, this antitrust action could result in more innovation in digital marketing and better financial results for more businesses.
The Current State of SEO: Google’s Dominance
In only two years after its founding, in 2000, Google became the top search engine in the world and hasn’t slowed since. It’s the global leader in online search, with its record revenues primarily coming from online search advertising. In the past couple years, Google’s market share has decreased slightly, due to the increasing popularity of artificial intelligence (AI) tools like ChatGPT. But Google launched its own AI tool, Gemini, in response. It’s just one example of how the top tech minds who work at Google are constantly innovating to ensure the site remains market dominance.
Google also invests in maintaining its spot as the top search engine for the highest number of users, spending more than $26 billion a year on strategies like default placements through distribution contracts with wireless carriers, browser developers and mobile device manufacturers. Their high market share and high spending power enables them to stay at the top.
Today, Google processes an average of 40,000 search queries every second, or 3.5 billion searches per day. Alphabet Inc., the parent company of Google, has even more market influence, as it owns companies including YouTube, Fitbit, Waze and Nest.
The Importance of Optimizing for Google
Because Google has such a big market share for searches, its advertising model has thrived and kept it at the top spot among PPC networks for years. Around 80% of Alphabet’s entire revenue stream comes from advertising.
For marketers and business owners, any brand that wants to reach people online generally considers Google as part of its digital marketing strategy. Numerous SEO tools exist to help digital marketers find top Google keywords to integrate into their content and to target for their online ads.
The bottom line: if you’re creating content or buying online ads, but you’re not optimizing for Google, there’s not much point to your efforts.
The Antitrust Proposal
The Impact of Google’s Monopoly
Monopolies happen when a single company dominates an entire market. Because Google owns the majority of user attention online when it comes to searches, companies that want to reach people through search and online advertising generally consider Google as part of their strategy. This enables the company to drive up advertising costs, due to a lack of competition.
Another consideration is that, while digital advertising provides vast advantages over traditional forms of advertising, like print and TV spots, paying for a click may not actually result in anything meaningful for a business. While Google reaps hundreds of billions of dollars in revenue each year from its online advertising platform, business owners who aren’t working with SEO experts may launch bad campaigns simply because they believe they have to in order to succeed online.
The monopolistic environment Google has created in the online advertising space has created plenty of headaches for business owners not versed in digital marketing best practices. A lack of competition makes it more difficult for business owners to compare cost-effective options for launching SEO and PPC initiatives.
Additionally, Google’s purported monopoly means it’s more difficult for innovative companies, and potentially better digital marketing solutions, to gain customers and market share. Less competition means less innovation overall, which is bad for tech.
As for the legal action, there’s no clear announcement for what the U.S. judge wants Google to do in order to dismantle monopoly. Potential solutions include forcing Google to share the data it gathers and separating Google’s advertising business from its search engine.
Another legal hearing is planned for the next phase to determine changes and/or penalties to enable a more competitive industry. As the appeals process alone could take as long as 5 years, it may be several years before we see any truly disruptive change to what’s currently happening with Google search and PPC advertising.
Preparing for Change in Digital Marketing
While we have yet to see what the consequences from this antitrust fallout are for Google and Alphabet, we expect the result to at least be increased competition in digital advertising and more fairness and transparency in search and online advertising platforms. Some future developments that could mean better results for marketers, businesses and the overall digital marketing landscape include:
- New avenues for marketing strategies and tools: If Google’s stronghold on search and PPC were to break up, that could cause searchers to scatter among channels, as well. This means marketers would have more sites to add to their marketing strategies to reach their target customers.
- Diversification beyond Google’s ecosystem: Depending on how Google is handled, it may open the playing field for existing and new search engines to gain more market share. Already, we’ve seen an increase in social media searches, with Generation Z being 25% less likely to use Google for search compared to Generation X.
- Building relationships with leads and customers outside of Google: Marketers who are using methods beyond Google already have a lot of potential to attract more leads and build stronger relationships using other digital marketing methods. Strategies like email marketing, content marketing through thought leadership on a website and smart social media strategies can result in an even better ROI than other methods.
What should business owners do now? While the norm continues as the courts decide how to proceed with Google, marketers can continue testing paid ad campaigns on Google to gain insights to inform other marketing channels.
But it’s important to prepare for shifts in the industry and continually research new digital marketing tools and methods, so you can reach your customers where they’re spending their time. Test various digital marketing channel strategies against each other, so if drastic steps are taken with Google, you’ll be agile enough to pivot and have a head-start on innovation.
Adapting to Change
Monopolies aren’t good for any business or industry. The legal action that Google’s facing may open the door for more innovation and a more competitive market in digital marketing and advertising.
You can prepare now by diversifying your digital marketing mix. Consider allocating part of a Google PPC budget to another PPC platform or channel to test what works best for your business.
Most technology platforms and digital marketing firms (like ours!) will offer free consultations for businesses. Take advantage of these to understand how various services could benefit yours now and in the future.
Need help optimizing your brand for search, PPC and emerging tools and technologies? Contact 321 Web Marketing for a free consultation.
