Google inflation?

This wasn’t your average ABC News Story:

The world’s most powerful internet company, Google, has been accused of overcharging its advertising clients and inflating the number of hits to their websites.

The story was reporting about this paper by Ben Edelman of Harvard Business School. The story argued that Google was either directly or allowing (encouraging?) practices that led to more users clicking on ads and so higher ad payments.

There are four examples given. In the first, you click on an ad but the host puts in a bunch of similar ads that you need to click through to get to where you want to go. The advertiser ends up paying twice. In the second, a similar thing occurs but through a user-installed browser toolbar. In the third, a user types a web address in, incorrectly. Someone owns the typo’ed site and peppers it with Google ads for the real site. In the fourth, searches in Google’s Chrome browser appear above the actual web address leading to more traffic through Google.

Of these, the final one seems innocuous given the way Google lays things out and seems convenient to me. The first three are all things that are a problem for Google because they are a problem for advertisers. What they mean is that when advertisers look at how effective their ads have been — in terms of getting extra sales — with this stuff there they discount that effectiveness. The end result is lower bids for ad space and low revenue to Google even if their ‘partners’ make out well from the deal. I can’t see how it causes inflation.

The news report is odd. It is true that Edelman seems overly critical of Google in all of this but it should surely be the case that Google should welcome these examples being identified and pointed out so that they can be dealt with. This is regardless of whether Edelman has a Microsoft connection or not. After all, these issues will likely hit all internet advertising platforms one way or another.

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