Google has tweaked its advertising auctions to boost its search revenue targets, while knowingly not informing advertisers of pricing changes, a company executive claims.
Google ads executive Jerry Dischler revealed that the Alphabet-owned tech company’s search dominance allows it to increase prices for advertisers with minimal consequences.
Dischler disclosed that Google modified its auction process in ways that may have raised prices in the past by 5% for typical advertisers, and for certain queries, it could have been as high as 10%.
These changes may involve raising the minimum spending on ads, known as reserve pricing, the executive disclosed.
Last year, the US tech firm made over £182.95bn ($224.47bn) in advertising revenue alone.
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Dischler’s testimony, where he describes statements he made under oath in 2020, added that the parties buying the ads would have been unaware of these ‘tunings’ of prices.
“We tend not to tell advertisers about pricing changes,” said Dischler, detailed Bloomberg.
These advertising practice revelations come amid an ongoing federal antitrust investigation, where the US Department of Justice accuses Google of unlawfully maintaining a global online search monopoly.
Raising ad prices was a way for Google to increase search revenue during dry spells, an email chain from Dischler to other Google executives suggests.
“We are shaking the cushions [on ads launches]”, Dischler writes in the email, going on to describe other options for boosting revenue include making Search more prominent for Chrome users.
The email chain also acknowledged that, despite potentially driving some advertisers to competitors like Meta or TikTok with higher rates, overall revenue might still increase.
The revelations follow the US tech giant being ordered to sell part of its advertising business earlier this year, amid concerns that the firm was favouring its ad services over those of its competitors.
