Australia\u2019s competition watchdog, the Australian Competition and Consumer Commission (ACCC), says Google now dominates the country\u2019s online advertising so thoroughly it must be reined in<\/a>.<\/p>\n The ACCC maintains that over the past ten years, Google\u2019s advertising technology has developed to the point of being anti-competitive.<\/p>\n In a report<\/a> released on Tuesday, the ACCC said Google had arrived at market dominance through a massive data advantage. The tech giant hoovers up vast quantities of information about the people who use Google Search, YouTube, Gmail, Google Calendar, Google Docs, Google Contacts, Google Sites, Google Meet, Google Chat, Cloud Search, and more.<\/p>\n The watchdog estimates 80\u201390% of all online ad impressions for Australia passed through at least one Google service in 2020. An \u201cad impression\u201d is created when an ad is displayed on an app or webpage. It is the benchmark by which advertisers know how many times an ad has been viewed.<\/p>\n In light of this estimate, it\u2019s fair to say Google has the lion\u2019s share of Australia\u2019s digital advertising industry, which last year reached A$9.5 billion in spending.<\/p>\n The ACCC has recommended a new industry code to make the end-to-end ad process more transparent. It also wants to impose rules on how user data is collected for digital advertising purposes, and how fees for services are calculated.<\/p>\n The full list<\/a> of recommendations is aimed at limiting Google\u2019s potentially monopolistic power in the digital advertising market.<\/p>\n In response, Google has said the ACCC hasn\u2019t properly taken into account other online advertising channels available to Australian advertisers, such as Facebook, Twitter, and Snapchat.<\/p>\n Google also highlighted a PwC report<\/a> which estimated three-quarters of the tech giant\u2019s advertising customers in Australia were small to medium-sized enterprises (SMEs) \u2014 and that Google\u2019s services contributed A$2.4 billion to Australia\u2019s economy each year.<\/p>\n A Google spokesperson reaffirmed the company\u2019s willingness to work with the ACCC to engender a \u201chealthy ads ecosystem\u201d, according to The Guardian<\/a>.<\/p>\n It may be apocryphal that in the early days of Google, when their only product was a revolutionary search engine, a business advisor is said to have asked the founders how they intended to make money. The reply was along the lines of \u201cwe\u2019ll figure something out\u201d. That something, it seems, was Google Ads<\/a>.<\/p>\n Last year, Google Ads helped the market value of US company Alphabet (of which Google is a part) surge in excess of US$1 trillion<\/a>, joining Apple and Microsoft. It places ads in Google Search results, as well on mobile apps, webpages, and videos, and is the main tool through which advertisers can reach customers via Google\u2019s services.<\/p>\n Each time someone uses Google Search or visits a website hosting ads through Google Ads, an automated ad auction takes place behind the scenes. Advertisers bid on the maximum cost-per-click<\/a> amount they\u2019re willing to pay for their ad.<\/p>\n Paying cost-per-click means that rather than paying for the ad space itself, the winning advertiser pays a set amount to Google each time someone clicks on their ad.<\/p>\n Of course, not everyone who clicks an ad will also make a purchase. It might only be one click in ten that converts to a sale \u2014 this depends on how hot or cold the market is.<\/p>\n So if the cost per click is 50 cents, and the click-to-sale conversion rate is one in ten, the advertiser must sell their product for no less than $5 if they want to break even on their ad purchase. But how does that price compare with their competition\u2019s? They must do their sums carefully.<\/p>\n For an ad to be displayed in a prime position, the cost-per-click bid must be sufficiently high, the ad must be of high quality, and must have keywords directly related to the search inquiry.<\/p>\n According to Google<\/a>, ads can be targeted based on a number of factors including audience \u201cdemographics\u201d (certain locations, ages, genders, and device types) and by picking out \u201csimilar audiences\u201d:<\/p>\n Expand your audience by targeting users with interests related to the users in your remarketing lists. These users aren\u2019t searching for your products or services directly, but their related interests may lead them to interacting with your ads.<\/p>\n<\/blockquote>\n The exact details of the process are murky, however, as Google guards its methods carefully.<\/p>\n As artificial intelligence (AI) comes increasingly into people\u2019s lives, the job of buying things will conceivably be delegated to AI assistants. This is the vision of Peter Diamandis<\/a>, one of Silicon Valley\u2019s leaders best known as the founder of the technology nonprofit X Prize Foundation<\/a>.<\/p>\n How would it work? Well, over time your personal AI will come to know all about your daily habits, the products you use, how often you use them, what brands you like, where you go, who you meet \u2014 everything.<\/p>\n It will then make product suggestions to you based on these patterns. This is an expanded version of what Google already does with its Google Assistant feature.<\/p>\nThe lion\u2019s share<\/h2>\n
What does Google say?<\/h2>\n
Google\u2019s winning formula<\/h2>\n
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What does the future look like?<\/h2>\n
![\"Google](\"https:\/\/images.theconversation.com\/files\/423943\/original\/file-20210929-27-1ipmeia.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip\")