Competition Markets Authority complaint about Google

[wevet]

I am intending to try and stir up an enquiry into Google's PPC proricing system with the CMA and possibly (pre-Brexit) EU competition authority.

None of us like paying for PPC but it is a matter of life in the commercial world but when the main supplier, Google acts the way it seems to be currently acting in it's pricing of PPC it is, I am convinced, a clear breach of it's market position.

I have been an adwords customer from the incption and one accepts a degree of price fluctuation usally it is a range of about 10-20%.

Since July keyword pricing in my, very niche market have skyrocketed. For some the price have risen by 800%. My average ppc is up 125%.

I have spoken to my competitors who are bidding for the same basket of keywords and all have seen the same rise and yet none have made any alteration to their bidding. Obviously I can only take them at their word but it is, as I have said a very niche market and we all appear on page 1 of Google.

I have spoken a number of other business oweners and many have experienced a huge rise in their PPC recently. Has anyone else seen their PPC experience a dramatic rise recently? If so please PM me as the more evidence we can present the more likel ther is that the CMA may take notice.

I have spoken to Google and on gets the same anodyne response that the algorithm sets the price depending on demand. Sorry, that won't wash Google are clearly exploiting their position my guess being that they are upping the costs to see how many users turn off or reduce their use of PPC and that the pricing will then settle back down to a level much higher than was.

 

[NickGrogan]

None of us like paying for PPC but it is a matter of life in the commercial world

PPC is a way to advertise, its certainly not the only way or best way in many cases.

It is quick, easy and convenient, but that doesn't mean you have to use it.

I have spoken to my competitors who are bidding for the same basket of keywords and all have seen the same rise and yet none have made any alteration to their bidding. Obviously I can only take them at their word but it is, as I have said a very niche market and we all appear on page 1 of Google.

Why wouldn't they increase their bids, I presume that you all want to be number one and complete. Or are you saying that you work with your competitors to manage your advertising to reduce competition? That would be illegal.

 

[Ecommerce&MailOrderGuy]

Hi WeVet

Great to hear of someone in the same boat.
Obviously rising cost is not so great but I feel your pain and it's good to share.

Below is the content of a couple of messages I recently posted on this message board.
At the time I got no feedback but surely there are loads of us on this board experiencing the same thing???


I built my ecommerce business model based pretty much around Google Adwords back in 2006.
It's obviously changed considerably over the years - (particularly with the advent of Google Shopping). Fortunately we still recruit new customers through this method but boy oh boy is it getting tougher!!

We operate in a niche market, quality scores mainly 10/10 and operate our Adwords account in-house.

Google (Alphabet) financial results show their revenue from advertising currently increasing 20% year-on-year. Given that they have a monopoly on the market and the market is now pretty well saturated I'm guessing this 20% is coming out of advertiser pockets like ours?

Any other ecommerce retailers out there seeing similar cost increases?

Here's an idea of the change in ROI we are getting from Google.
£1 sales for £1 spent shown below
2019 £4.57
2018 £5.92
2017 £8.42
'Search' is still performing pretty well but Google Shopping has been difficult.
We only achieve £3.01 per £ spent on our Shopping advertising this year which means it is operating pretty close to break-even.
Obviously 'Shopping' success is pretty-much dictated by who offers the best price.

Is there anyone else on this board using Google for advertising their business who would like to share their thoughts?

 

[Mr D]

I am intending to try and stir up an enquiry into Google's PPC proricing system with the CMA and possibly (pre-Brexit) EU competition authority.

None of us like paying for PPC but it is a matter of life in the commercial world but when the main supplier, Google acts the way it seems to be currently acting in it's pricing of PPC it is, I am convinced, a clear breach of it's market position.

I have been an adwords customer from the incption and one accepts a degree of price fluctuation usally it is a range of about 10-20%.

Since July keyword pricing in my, very niche market have skyrocketed. For some the price have risen by 800%. My average ppc is up 125%.

I have spoken to my competitors who are bidding for the same basket of keywords and all have seen the same rise and yet none have made any alteration to their bidding. Obviously I can only take them at their word but it is, as I have said a very niche market and we all appear on page 1 of Google.

I have spoken a number of other business oweners and many have experienced a huge rise in their PPC recently. Has anyone else seen their PPC experience a dramatic rise recently? If so please PM me as the more evidence we can present the more likel ther is that the CMA may take notice.

I have spoken to Google and on gets the same anodyne response that the algorithm sets the price depending on demand. Sorry, that won't wash Google are clearly exploiting their position my guess being that they are upping the costs to see how many users turn off or reduce their use of PPC and that the pricing will then settle back down to a level much higher than was.

Are the people you spoke to the only bidders possible for those keywords and are they all telling you the truth?

Is anyone increasing bids to gain commercial advantage?

 

[Darren_Ssc]

I have spoken to Google and on gets the same anodyne response that the algorithm sets the price depending on demand. Sorry, that won't wash Google are clearly exploiting their position my guess being that they are upping the costs to see how many users turn off or reduce their use of PPC and that the pricing will then settle back down to a level much higher than was.

You don't believe a simple algorithm is to blame yet say the cost per click will rise until people stop bidding?

Simply, you may just be unfortunate to be in a market where your competitors are willing to keep throwing money at google despite all signs indicating they should be doing otherwise?

 

[StevePoster]

Is there anyone else on this board using Google for advertising their business who would like to share their thoughts?

Google advertising specially PPC, I find it not effective for the business because right now mobile users are ignoring this kind of ads. These fast growing users are still relying on trusted sources in the web, which means reputation is more than anything. It cannot be brought anywhere but can obtain in time due.

 

[Darren_Ssc]

Google advertising specially PPC, I find it not effective for the business because right now mobile users are ignoring this kind of ads. These fast growing users are still relying on trusted sources in the web, which means reputation is more than anything. It cannot be brought anywhere but can obtain in time due.

The random word generator is on form today.

 

[Andy Harris]

Google PPC costs rising aside, the reality is that there are currently no credible competitors that can provide the scale of visibility that Google do.

I continue to be disappointed with setups like Bing, who could so easily boost their revenues if they thought intelligently (instead of like sheep).

LinkedIn seem to be getting their act together more and although their paid advertising variations aren't cheap, they are at least putting adverts in front of very specific people.

In my line of work we encourage our customers to analyse the page by page movements of every single PPC visitor they get. The outcome is usually two things:

1. There are some areas of PPC to tidy up to avoid junk clicks.
2. The website needs to be strengthened to convert the good clicks to more enquiries.

Unfortunately, most people in business are 'too busy' to look at their website visitors in detail and they suffer as a result.

 

[Ecommerce&MailOrderGuy]

I find it all pretty fascinating really.
When we started (2006) it was relatively easy to achieve £10 per £1 spent on Google - at the time we would typically achieve £2.40 per £1 spent using traditional advertising methods such as classified advertising in magazines.
Even then it was clear that Google would grow and that traditional advertising methods would suffer.I think we are now nearing the point where PPC itself is 'traditional' advertising. Competition amongst traders has brought down ROI close to £2.40/£1 - which for us is pretty much break even.
The next 12-24 months should prove to be a watershed period online.
A number of ecommerce business models will simply not be sustainable....some will scale down, others will close.
One certainty is Google and Amazon will continue to thrive (unless the regulators step in).

 

[NickGrogan]

There will always be someone willing to pay more per click than everyone else. Maybe they're more efficient, maybe they convert better, maybe they have more money to spend. Either way advertising prices will continue to rise until you reach break-even.

It happens in reverse on Amazon or eBay, there is always someone willing to sell for less so margins disappear.

FYI, Google has around 37% share of PPC, so a long way from a monopoly.

https://www.disruptiveadvertising.com/ppc/ppc-statistics/

 

[Ecommerce&MailOrderGuy]

Agree with that comment about breakeven Nick.
As an aside can anyone tell me how long it takes to collect all possible negative keyword permutations on Google Shopping??
For those uninitiated - say my product is a 'Wooden Rocking Chair' Google will show my image-ad for phrases such as 'Office Chairs' and 'Rocking Toys' until I tell it not to (by adding these unwanted terms to my list of negative keywords).
In my selling season I will clean-up the campaigns every three days or so.....but still get unwanted terms 12 months later, 24 months later etc etc.
Does it ever stop?????