How a Google breakup could change the PPC industry

Google’s adtech antitrust trial raises critical questions about the future of paid search, with a potential company breakup on the line.

With search engines dominating nearly 90% of the global search market, PPC advertisers and marketers face an uncertain future. Established strategies could become obsolete, and new platforms may emerge. 

This article explores the potential implications of a Google breakup, highlighting both challenges and opportunities for the advertising landscape.

Antitrust and advertising: What does the future of paid search look like without Google?

Antitrust discussions threaten to dismantle Google’s dominant paid search ecosystem – a platform that has been the best option for paid ads for over a decade.

Imagine a paid ads landscape suddenly fractured, where your advertising strategies become obsolete overnight.

Kurt Henninger believes that this could happen out of the blue.

The potential dismantling of Google isn’t just a regulatory question. It’s a seismic shift that could unravel the current paid advertising infrastructure.

The PPC industry heavily relies on Google Ads, which commands approximately 90% of the global search market share.

The dominance of a single platform has allowed advertisers to build expertise on one primary ecosystem, focusing on a unified set of tools and metrics. 

Google’s suite of interconnected tools, including Google Ads, Google Analytics and Google Tag Manager, offers a streamlined approach to running paid ads on Google. 

This integrated ecosystem allows advertisers to easily manage campaigns, track performance and implement tracking pixels.

Although not the main impetus behind the antitrust cases, this convenience and efficiency might provoke antitrust concerns. 

Furthermore, the outcomes of these court cases could adversely affect this interconnectedness.

Key concerns include:

• Market power: Google’s significant market share allows it to potentially favor its own products and services, limiting competition and choice for advertisers.
• High barriers to entry: The substantial costs of building and maintaining a competitive advertising platform, combined with Google’s strong brand and network effects, make it difficult for new entrants to challenge Google’s dominance.
• Data advantage: Google’s access to vast amounts of user data, derived from its search engine, browser and other services, gives it a competitive edge in targeting and measuring ad campaigns.

A breakup of Google could dismantle this stability, leading to increased fragmentation across platforms like Bing and Yahoo.

Here are some possible implications of forcing a Google split, whether by dividing Google into multiple independent entities or by creating enough separation to introduce several search engines into the market.

Positive implications

1. Increased competition 

A split could lead to increased competition in various markets, potentially resulting in lower prices for advertisers and faster innovation.

Henninger also remembers the “good old days” of paid search in the tweet above. 

Increased competition among ad platforms can drive down prices as companies compete for advertisers’ business. 

When advertisers have choices, these platforms are incentivized to innovate, developing new targeting methods, ad formats and measurement tools to attract and retain clients.

This is especially true as advertisers need to prove advertising is working to continue to justify the marketing spend.

With Google as the sole option for many, there has been little motivation for them to innovate or offer support. 

Advertisers seeking significant search traffic currently have no alternatives.

Melissa Mackey recalls a time when Yahoo surpassed Google in size. She notes that, although neither matched the quality of Google Ads, Yahoo had a substantial volume.

While Overture and Yahoo were dominant players in the early days of online advertising, they were eventually eclipsed by Google’s innovative approach to search and advertising. 

Google’s superior search algorithm and targeted advertising capabilities allowed it to gain market share rapidly.

A Google split could potentially rekindle innovation within the paid search industry.

2. Platform-specific innovations 

Smaller, more specialized ad platforms might innovate more swiftly in certain areas. 

This concept ties back to the previous implication regarding competition.

Google has not only become the dominant player for search traffic but is also an incredibly large company with bureaucracy. The company’s size and dominance have stifled innovation.

Smaller ad platforms can innovate more rapidly in specific areas due to their agility, focus and reduced bureaucratic overhead. 

They can quickly adapt to market changes, experiment with new technologies and make decisions without the complexities of large corporate structures. 

Additionally, smaller platforms may be more willing to take risks and invest in niche markets, leading to innovative solutions that larger platforms might overlook.

3. Opportunities for innovation 

A split could create new opportunities for innovation as companies focus on their core competencies.

If Google were to be split, smaller ad platforms could focus on their core competencies because they wouldn’t be burdened with managing a diverse range of products and services. 

This third implication builds on the themes of competition and the drive to innovate, emphasizing that a company’s size can also limit innovation. 

For instance, when a company reaches the scale of Google, search features may not always be the primary focus at any given moment. This has been evident in the AI race

Google’s parent company, Alphabet, is a massive conglomerate with interests in various tech sectors, from search and advertising to self-driving cars and healthcare.

If Google were to split, smaller companies could emerge, each focused on specific areas like search, advertising, or cloud computing. 

These smaller companies could concentrate their resources and expertise on their core competencies, leading to more efficient operations, faster decision-making and greater innovation. 

For example, a smaller ad platform could focus solely on developing advanced targeting algorithms or innovative ad formats without being distracted by other Google projects. 

This increased focus would allow them to compete more effectively with larger, more diversified companies.

Negative implications

4. Siloed data

Google’s integrated ecosystem allows for streamlined data collection, from Google Analytics to Tag Manager. You can easily pull data into a Looker Studio report.

Advertisers who bypass Google Analytics often highlight the availability of numerous tools for data integration. However, incorporating additional services and data integrators can lead to data loss. 

This issue will likely be exacerbated when pulling data from multiple search engines and platforms, as each platform tends to calculate metrics with slight variations. 

Is it even possible for us to unite on marketing standards?

A breakup would mean advertisers lose cohesive insights and would have to invest in third-party data integration solutions to bridge gaps between platforms, potentially risking data loss and hampered decision-making. 

Independent platforms are incentivized to claim credit and demonstrate their role in driving revenue. This dynamic will continue to worsen the credit attribution issue we observe between paid search and paid social.

Achieving statistical significance could become challenging if search volume fragments too widely, making campaign optimizations more difficult for ad managers.

5. Increased labor costs

Costs for advertisers are already high, especially in retail, where increased CPCs further squeeze margins. 

Fragmentation could further intensify these challenges, not only from the platform side but also from the labor side.

Advertisers will need to hire more platform specialists, which typically cost more than generalists in terms of salary.

Reid Thomas agrees with this, pointing out that it seems counterintuitive.

Despite their apparent similarities, Google and Bing differ significantly in their algorithms, user interfaces and overall search experiences for users and ad specialists.

The bidding systems and auction dynamics in Google Ads and Bing Ads differ, influencing CPC and overall campaign effectiveness.

If the courts ever restricted Google or mandated its division into separate entities for search, we might witness the rise of Bing experts alongside Google experts who also specialize in Bing. 

This assumes that the volume of searches and the return on investment for advertisers on Bing justify the costs of dedicating resources to this platform.

6. Increased training costs

It is advantageous for a Google Ads expert to understand how Facebook Ads and Amazon Ads and other platforms operate. 

Although Google Ads experts may not actively manage these platforms daily, having cross-platform knowledge allows experts to better assess the role each platform plays in relation to Google Ads.

If Google were to be divided, the demand for this training would rise as additional platforms become options for search. 

This assumes that a breakup of Google introduces more competitors beyond just Microsoft’s Bing and that the new platforms offer distinctly different products.

Julie Bacchini has also been thinking about this, reminding us that this could happen quickly.

7. Media plan complexity

For large advertisers, media planners handle intricately complex strategies that include spending on platforms such as Google, TikTok, influencer marketing, programmatic and CTV. 

The emergence of the media planner role has led to specialists adept at quickly adjusting year-long media plans mid-campaign and projecting the revenue impacts of the moving media budgets.

This role ensures media budgets are allocated to the platforms performing best at each stage of the campaign.

If the market begins to fragment, this role will become even more demanding, as advertisers want to be agile when allocating budgets during the campaign’s duration.

Dividing Google search would significantly increase the demands on media planning teams, requiring them to manage exponentially more scenarios for budget allocation in already complex plans.

8. Higher CPCs

Fragmented search volumes on platforms may drive up CPCs due to intensified competition at the platform level.

Additionally, increased operational costs – such as those for server time – could trickle down to advertisers, reducing ROI. 

Google already limits low-volume keyword bids to control the cost associated with serving ads.  

Segmenting search across various platforms could increase its prevalence by decreasing searches on each platform. This would align the ad serving costs more closely with the CPC, thereby reducing margins.

9. Google targeting shifts

We can only speculate on what a division of Google might entail, but let’s consider a scenario where Google must separate YouTube and its search operations.

Currently, Google uses a wealth of user data across its various platforms to create detailed user profiles and highly targeted ads. 

However, if these platforms were separated, the amount of data available for targeting could be reduced. 

This could lead to less precise targeting, potentially impacting the effectiveness of ad campaigns. 

Additionally, integrating YouTube and Google Search allows for sophisticated cross-platform targeting strategies. 

For example, advertisers can target users who have watched a specific YouTube video with relevant search ads. 

If these platforms were separated, such cross-platform targeting opportunities might be limited or even eliminated.

It’s important to note that this is just a potential scenario. The actual impact of a Google split on targeting would depend on the specific details of the division and any new regulations or policies that might be implemented.

10. Innovation slowdown

Although the previous section discussed the potential for increased innovation, a Google split could also reduce innovation. 

While outcomes are unpredictable, it is important to consider all scenarios.

Google has a vast amount of user data, which is a key driver of innovation in the paid search industry. 

A split could reduce the amount of data available to each company, hindering the development of advanced targeting and measurement tools.

11. Regulatory scrutiny

A split could subject the new companies to increased regulatory scrutiny, potentially adding additional costs and bureaucratic burdens that could hamper innovation.

This is basically a case of laws and regulations being enhanced to avoid another Google situation.

However, considering these new companies will be smaller and may not have the same resources as a larger corporation like Google, excessive regulatory rulings could stifle their growth and hinder their ability to compete or go to market with an alternative platform.

12. Impact on employment

The impact of Google’s disappearance on employment in the paid search industry would be significant and far-reaching.

Google employs a vast workforce to develop, maintain and support its advertising platforms. A significant portion of these jobs would likely be eliminated.

Numerous agencies, consultants and freelancers rely on Google Ads as a core part of their business. Reducing Google’s dominance could lead to job losses in these sectors.

This could also decrease the demand for specialized skills related to Google Ads, such as campaign optimization, audits and strategy work.

On the other hand, Google’s absence could shift new job opportunities as businesses look for alternative ways to reach their target audience. 

Other search engines or social media platforms may see increased demand for their advertising services. This could open up different roles for paid search marketers and advertisers familiar with these platforms.

What should marketers and advertisers consider in the short term?

To navigate potential disruptions, PPC marketers should prioritize adaptable strategies that can withstand shifts in the paid search ecosystem.

Platform diversification 

• Begin experimenting with alternative platforms to build resilience in case of fragmentation. While testing requires a budget, the insights gained could prevent over-reliance on a single platform.

Develop cross-platform skills 

• Train teams in data analysis, human behavior and cross-channel strategies. 
• Adaptability is crucial as market dynamics evolve.

Adopt flexible tools 

• Leverage and engage with thought leaders from third-party vendors like Optmyzr that facilitate multi-platform campaign management and analysis. 
• Vendors can serve as valuable guides, integrating data across platforms and adapting to industry changes.

Build resilient strategies

• Focus on developing platform-agnostic strategies that can be implemented across multiple channels. 
• Understanding search intent and customer psychology will remain valuable regardless of the specific platform.

Technological agility 

• Invest in tools and teams that allow for flexible adaptation across platforms.

Channel relationships 

• Cultivate connections with platform vendors and search engine representatives to stay informed of future changes.

Ongoing training 

• Keep skill sets current in areas like data analytics, audience insights and regulatory updates. 
• Marketing fundamentals remain constant even as digital spaces evolve.

Looking forward

It’s important to note that the actual impact of a Google split will depend on various factors, including the specific terms of the split, the competitive landscape and overall economic conditions.

A Google breakup would undoubtedly reshape the paid search landscape, requiring paid search marketers to embrace new strategies and technologies and possibly higher costs. 

Advertisers can navigate a diversified market and leverage competition by staying adaptable and informed.

The skills to analyze and optimize remain more critical than ever. Equally important is delivering marketing in a privacy-focused manner that respects consumers while they browse online.