New Research Debunks DOJ’s Google Ads “Hipster” Antitrust Myth
Washington, DC (Jan. 27, 2023): A new study released by the Connected Commerce Council (3C) that surveyed 1,600 small businesses shows that digital advertising competition is fierce, contesting the Department of Justice’s (DOJ) new lawsuit claiming that Google abuses its market dominance in online advertising. Though Congress, the Federal Trade Commission (FTC), and DOJ continue embracing the “hipster” antitrust dogma that success equals being anticompetitive, small business advertisers (SMB Advertisers) and publishers (SMB Publishers) alike have more options online than ever before.
The study shows that SMB Advertisers use at least 11 digital ad platforms concurrently, ranging from Pinterest (used by 20% of SMB Advertisers) to Facebook (used by 63% of SMB Advertisers). A recent Bloomberg story reinforces the robust competition in the digital ad space. Several companies, from upstart innovators to legacy retailers, are quickly gaining market share from companies like Google and Facebook.
“The notion that one company has a monopoly over the digital advertising marketplace is unfounded,” said Beth Egan, Professor of Advertising at Syracuse University. “The online ads market presents small businesses with several competitive options, all cheaper and more effective than offline ads. Google is an important player in the market, but certainly not the only one. Its integrated ad services help small businesses reach customers more cheaply than ever before and help small publishers monetize their websites, blogs, and YouTube pages more easily than ever before.”
Regardless of Google’s imprint on the digital advertising marketplace, if DOJ succeeds in forcing a divestment of some of its advertising technology business, it will seriously harm the small advertisers and publishers that benefit from and enjoy using Google’s advertising tools. Sixty-nine percent of small advertisers say it would hurt them if digital advertising (like Google Ads) no longer existed, with 69% agreeing that starting and sustaining their companies would be near impossible without access to targeted ads.
“Many of our clients are small, local businesses eager to promote their brands and find more customers online,” wrote Gabe Silverman, a digital marketing consultant who runs Gecko Designs in Missoula, MT. “If DOJ succeeds in breaking up Google Ads, I’m concerned it will undermine advertising and marketing effectiveness, costing small businesses money and customers.”
Additional findings from the report include:
- 78% of SMB Advertisers agree digital ads contribute more revenue to their business than traditional, offline ads.
- 82% of SMB Advertisers agree digital ads allow them to more efficiently reach their target customers than traditional, offline ads (e.g., TV, radio, newspaper ads).
- About 4-in-5 SMB Advertisers and SMB Publishers say digital ads help them compete with larger businesses.
- Without the revenue generated by selling digital ads, 74% of SMB Publishers say their entire business model would be negatively impacted.
“Our study underscores just how out of touch ‘hipster’ antitrust policies are with reality,” said Rob Retzlaff, 3C Executive Director. “Digital advertising is a crucial tool for small businesses to reach and connect with customers, and Google’s ad network is one of the most effective ways for them to do so. Any changes to the digital ad market could increase costs for small businesses, making it harder for them to monetize their websites and reach their target audiences. It’s important for small businesses to have access to affordable advertising options in order to succeed in today’s digital economy.”