U.S. v. Google Lawsuit Will Disproportionately Hurt Small Business Advertisers and Publishers
Affordable, effective digital advertising can mean the difference between thriving and faltering for small businesses. Digital ads help small businesses compete with big brands supported by multimillion-dollar marketing budgets by providing affordable, highly effective ways to reach target audiences and drive sales, as well as free, high-quality analytics. They’re also an important source of revenue for countless small websites, YouTube channels, bloggers, and app developers that sell ad space alongside online content.
Today’s digital advertising market offers U.S. small businesses more ways than ever to reach potential customers and market products. There are search ads, social media ads, on-platform ads from companies like Amazon, Etsy, and eBay, and display ads (also known as banner ads), which are visible on the tops and sides of websites. Moreover, fierce competition between ad providers benefits small businesses. Online ad prices have fallen 25 percent since 2010, even while advertising has become significantly more effective.
Despite this fiercely competitive landscape and its demonstrable benefits to advertisers and publishers, the Department of Justice (DOJ) has recently found fault with one segment of the market: display ads that appear on websites. The DOJ sued Google in January 2023, alleging its presence on both the buy and sell sides of the digital display ad market is an unfair monopoly that drives up prices and slows innovation. Of course, two-sided marketplaces are neither new nor controversial: popular platforms like eBay and Etsy match buyers with sellers, and Uber and Lyft match riders and drivers.
In practice, Google’s presence on both sides of the market allow it to offer seamlessly integrated technologies, creating efficiencies that save millions of small businesses time and money, making it an incredibly valuable partner. Thanks to Google, small businesses can work with a single platform that has millions of websites in its network. This saves them from having to hire dozens of marketing professionals to identify which websites might attract the right audience for their business. Similarly, publishers don’t need a team of salespeople to find advertisers to buy their ad space.
Instead, with the click of a few keys, publishers can start earning revenue with Google almost immediately. Google’s ads use basic data such as consumers’ interests, demographics, and online behavior to serve the right ads to the right audiences and help businesses find new customers. More than 70 percent of small publishers say they wouldn’t have been able to launch and sustain their business without revenue from digital advertising, and 57 percent earn more than $50,000 a year in digital ad revenue. Similarly, 82% of small businesses directly attribute 2023 revenue growth to personalized ads. This ad revenue is the backbone of the modern internet, allowing millions of websites, YouTube channels, and app publishers to offer their content for free.
If the DoJ successfully breaks apart easy-to-use digital advertising tools, online advertising will become more expensive and less effective. This will have serious consequences for small businesses and advertisers and will likely hurt small, local, and independent publishers especially hard.
Google is far from the only option in a growing, thriving digital ads market. In fact, the sector is crowded, with large integrated players like Microsoft and Amazon competing with sophisticated advertising technology players like The Trade Desk, Criteo, and others. It’s past time for policymakers to take off their blinders and realize that their crusade against America’s leading technology companies will do little more than disrupt the success of millions of small businesses.
