Google, Net Neutrality, and the Curious Case of Let’s Make a Deal

Something has been bothering me, and I couldn’t quite put my finger on it for the longest time.  As I was digging my car out from our recent snow, I was enjoying the always pleasant and never controversial John C. Dvorak and his Cranky Geeks podcast.  The episode had a segment called “Google Must Die” and was based in part on John’s article of a similar title.  His basic thesis is that Google, as a search engine, with its intent to get you, the user, the best information about whatever it is for which you are searching, is broken.  Instead, GOOG has become a portal to commerce.

Then it hit me.  Those words repeated in my head over and over again.  A. Portal. To. Commerce.  When I was running IMSafer, we spent quite a bit of time doing SEO and ad buys.  I always had a great deal of wonder for the many ins and outs of the various search engines, and the many people who claim to have cracked that nut.  It never ceases to amaze me how when I search for either SEO or the name of an SEO firm that wanted to win my business that the firm in question did not appear as the number on link.  That’s a story for another time.

As part of their method for determining ad word link order, Google has a metric which they call their quality score.  You see, it used to be that the only thing that mattered for your ad placement was the amount that you were willing to pay and the click through rate of your ad.  This actually rewarded people who wrote good ads in such way as to move their ad to the top of the page, and not require that they be the highest bidder.  As is the case with any technology business, things seldom stand still for very long, and the quality score metric has evolved.

The one bit that stands out, more than anything else, is that GOOG is in the business or arbitrating the commerce on the Internet.  With a very opaque system which exists, in their words, “to organize the world’s information and make it universally accessible and useful,” I find it very interesting that GOOG is the one who gets to determine the usefulness, and, more specifically, how accessible, any specific piece of information is.  As a business, if you are not on the front page of GOOG search results, you might as well not be in business.

There are several factors affecting quality score which are largely in the control of a business.  They can write great ad copy, and get great click through rates.  However, the addition of the landing page relevancy to the metric swings things dramatically in GOOG’s favor, with no recourse for the advertising business.  I am not the first to trod on this ground, as this post clearly outlines many of the issues calling for transparency from such a large force in the market.  Alan Rimm-Kaufman makes some great points, but the discussion left me feeling incomplete.

The connection I have not seen in any of these discussions, however, is that coupling this debate back to the topic of net neutrality.  GOOG has taken a very strong stance on the notion of net neutrality.  Again, in their own words:

Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet. The Internet has operated according to this neutrality principle since its earliest days. Indeed, it is this neutrality that has allowed many companies, including Google, to launch, grow, and innovate. Fundamentally, net neutrality is about equal access to the Internet.

Let me repeat that last point again.  Fundamentally, net neutrality is about equal access to the Internet.  To hear GOOG tell the story, it shouldn’t matter how much you are willing to spend on ads.  If their bot determines that you have a better landing page, then they can get you more traffic than someone who is willing to pay more for the placement.  Traditional media placement actually works the other way – you pay, you get the placement.  Demand determines price.  GOOG will no doubt claim that they are democratizing the web, because they are making millions of customers available to those who can make for a better customer experience.  GOOG is the arbiter of that experience, however, since they have little, if any, visibility into the conversion rates for traffic they send a business.  They have lexical analysis.  Businesses have hard numbers.  This is no doubt why they make Analytics available free of charge – a business’s traffic and conversion data feeds the GOOG beast, and gives them more data upon which to charge the business what they believe to be the appropriate price for a set of ads.

There’s the rub.  GOOG gets to charge you whatever they want for ad placement.  It doesn’t matter that the top link spot is going for $1 CPC.  If you are willing to pay $10, and have no prior historical data with GOOG about traffic or ads, they can decide, through the opaque process of their quality score and the fallback excuse that your landing page didn’t pass muster, to charge you $100 for top placement, or not let you advertise for that ad word at all.

GOOG doesn’t want the network providers to create a tiered Internet based on who they decide should be on whatever tiers they set up, but GOOG are in fact doing that very thing.  If GOOG can arbitrarily decide who gets a link off their search result page, they are the de facto arbiters of commerce.  It’s as if a mall operator showed up to a store the day after they opened, walked in, looked at their layout, and said “you now have to pay 10x the rent because I don’t think people will like coming in here.”  Further compounding this issue is the lack of clarity in the algorithms that GOOG uses.  There is no playbook by which a business can refer that enables them to know with certainty that if they do X, they will get Y result.

Which brings me to the curious case of “Let’s Make a Deal.”  Business owners don’t know if they should take what they have and understand (traditional advertising), or what’s in the box (GOOG ad words).  The box can be mightily seductive, but it can also bring ruin.  Play your cards right, and you get great rewards.  Play them wrong, and you go home with nothing.  GOOG now has close to 70% share in the search market, making them an undisputed monopoly, and, more abstractly, the new version of Monty Hall.  I’m not a huge fan of the government taking on the task of deciding who is and who is not a monopoly, having myself been deposed in the Microsoft anti-trust case.  I believe that customers and users will dictate where the market goes.  With that said, this is an angle on the story which I have not seen anywhere, and I hope more people start asking the hard questions around GOOG’s role as a portal to commerce, and their hypocritical role as the white knight for net neutrality.

UPDATE

Not two seconds after I posted this, I find this article, courtesy Hacker News.  The article lays out, pretty clearly, that GOOG is even more hypocritical than I had thought.  They are approaching the network providers with a plan to allow GOOG traffic to operate on a higher tier of business.  Incredible.

Additionsl coverage can be found at RWW, and GigaOM.

Update – Looks like Techcrunch has a post on this topic (7 months after the fact) and they are missing one very subtle but important point.  Google can charge whatever they want to a customer seeking to buy ads based on what they think the user experience will be of clicking on an ad.  This is a “protection” scheme that is anything but fair.

  • Hey Brandon,

    Great post. I am just learning more about the world of SEO/SEM. I’m curious if you’ve read about Google’s patent and plans for a wireless spectrum auction system and their whitespace ambitions? How will their transparency extend to what people pay for wireless access? I’ve got one more question, do you know much about when Google decides to black-list sites? Adding some examples of bad “Quality Score” victims would help elaborate the not so neutral aspect of the story. Not only do they act as judge and jury with ad-revenue as a motivation, but they are also the search sheriff. I would be curious to get your thoughtful insight on this. Thanks for the great post.

  • Excellent content here and a nice writing style too – keep up the great work!

  • Pingback: Google and Net Neutrality, the ultimate Irony. | Chrome OS Blog()

  • Love the article, very interesting points. I linked to it from my blog here with a small commentary on the issue as well.

    http://www.chrome-os-blog.com/google-and-net-neutrality-the-ultimate-irony-141/

  • Brandon Watson

    It’s an old article, but I updated it today with the link to the techcrunch article on a similar topic. I find it surprising that more hasn’t been made about their ability to arbitrarily jack up rates for what a company pays for keywords based on what they think the customer experience will be.