Breaking Up Google Could Hurt Small Businesses | AdExchanger

I’ve taught digital advertising at a leading American university since 2013. Before becoming a professor, I spent 25 years helping businesses develop effective digital marketing and advertising strategies. I’ve closely followed the Department of Justice’s (DOJ’s) current case targeting Google’s digital display-ads business and calling for the company’s breakup – and I’m worried by the DOJ’s stance. 

Google isn’t perfect. But it offers convenient, cost-effective advertising tools that millions of small businesses use to find customers, grow and succeed. If the DOJ breaks up the company, it will also break those tools – and badly hurt small businesses.

Hurting the little guy

The DOJ says Google is illegally blocking competition in the digital display-ads market and keeping digital ad prices artificially high. But a closer look at the digital-ads marketplace reveals a different story. 

Businesses have more advertising options than ever. Google’s share of the overall market – 25.6% – is 10% less than it was just two years ago. The market is fiercely competitive, as rivals Meta, Amazon, TikTok and Microsoft, along with The Trade Desk, jostle for advertising dollars. Meanwhile, digital ad prices are falling, even as ads become more effective. 

DOJ officials object to Google’s size. They say the company is a monopoly because its ad-exchange serves both display ad buyers (businesses that want to run ads) and display ad sellers (websites looking to generate revenue by running businesses’ ads).

That argument doesn’t hold water. Many businesses – including Uber, eBay and Etsy – serve both sides of a market, and nobody’s crying foul. But there’s a deeper problem with the serving-both-sides-is-bad argument.

Google’s ability to seamlessly connect the two sides of the ads market makes it particularly valuable to small businesses. With the click of a few buttons and for a modest monthly fee, small businesses can buy thousands of display ads. Google ensures those ads go to the right websites in its huge network and serves the ads to audiences likely to be interested in them. 

It also provides analytics showing how well the ads are working, allowing small businesses to change ads that are underperforming and get the best return on their advertising investment.

Google’s size and integrated system enable small businesses to easily, affordably and effectively advertise, boosting their sales and helping them compete with bigger players. If the government breaks that system, there’s no readily available alternative.

Harms on both sides

New, smaller players would, by design, lack Google’s reach and efficiency. That means businesses would have to spend more time managing multiple ad and analytics platforms – or more money hiring advertising consultants – to reach the same number of customers. Big businesses might have the resources to do that, but small businesses would struggle to survive in a higher-cost, lower-sales digital ads environment.

On the other side of the equation, the thousands of websites and blogs that run small businesses’ ads would also be hurt by Google’s breakup. That’s because Google’s system lets them easily sell their available ad space to the right advertisers, helping them earn critical revenue. 

Smaller publishers won’t be able to make it on subscriber fees or entice people beyond a paywall. And most couldn’t afford to hire sales teams to sell their ad space directly to businesses. Many would simply disappear. 

The DOJ argues that Google sought to maximize its profits. But that’s Google’s responsibility to shareholders. More to the point, the DOJ’s proposed remedy may actually make digital advertising more expensive. 

As Judge Brinkema weighs Google’s future, I hope she’ll consider the broad benefits of the integrated system the company has built. Google offers businesses affordable, easy-to-use tools that help them effectively advertise their products. Revenue from running those ads keeps the internet free and open to all of us. 

Breaking up Google may strike a blow to Big Tech. But it may take down a lot of little guys, too.

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

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