Back to the future? Sounds cool. Find out what this really means for publishers and advertisers in this article written by Adam Epstein, Co-CEO and President of adMarketplace.
Twenty-five years ago, search transformed the digital world.
At its inception, Google was a fledgling company that revolutionized the Internet with its search engine. It built and expanded its empire thanks, in part, to the ruling in the antitrust case against Microsoft. The tables have turned today, and Google is on the other side of the bench.
In early August, Google’s loss in the search antitrust case decision marks a landmark moment for the search industry. As it stands, Google forces user searches to be funneled to its search results page, squashing innovation and extracting tens of billions from search advertisers and publishers in the process.
The industry now awaits proposed remedies to bring competition to the search market. The door is finally open for browsers and other search properties to innovate and improve the consumer search experience in search advertising by shaping consumer intent.
The Rise of a Tech Giant
In 1998, Larry Page and his Stanford friends invented a brilliant search engine that allowed anyone with a web browser to access relevant results to any query instantly and for free. Google now dominates search and most of Big Tech.
At the time, the company’s algorithms were so much better than competing search engines that the word “Google” became a verb that was, and still is, synonymous with “search.”
As Google grew, went public, and eventually added free software like Gmail, Maps, and Chrome, it extended its digital advertising empire. At the time, the only losers seemed to be the news and editorial publications who traded analog ad dollars for digital pennies when they raced to give away content for traffic.
However, to grow search ad revenue, Google began locking out competitors, raising ad rates, and extracting value from the user experience. As it extended its monopoly into new markets over the last ten years, Google’s search revenue has grown fivefold.
Unlocking Innovation on the Open Web
Google’s stronghold on the search advertising market is largely due to its exclusive search distribution contracts, which force partnerships like Apple to outsource search experiences to Google, making it the default search engine.
Conversely, “Search on the Open Web” is when a person searches for relevant results outside the search engine, such as on the homepage of a privacy browser like Firefox or through a shopping app like Klarna. In 2023, the size of the Open Web search advertising market was $90-100 billion. Over 90% of that revenue went to Google, according to evidence revealed in the U.S. v. Google antitrust trial.
Judge Amit P. Mehta of the U.S. District Court for Washington D.C. determined that Google’s exclusivity prevents the largest Open Web search properties from controlling ad selection or experimenting with their results. The tech conglomerate is also guilty of removing search results and ads provided by Google.
Now that Google has been found liable, the door to competition, innovation, and experimentation has opened. Most importantly, the consumer will benefit because the industry is entering a new era of curated search results.
How Can the Consumer Benefit?
Search on the Open Web opens the door to innovative, generative AI solutions. When Open Web search properties compete to experiment with search, consumers benefit from a more modern, personalized, relevant, and dynamic experience. With a curated search experience, users can find the best result or offer from the browser or property they are searching on and skip the SERP altogether.
Google’s exclusivity contracts currently prohibit this innovation. As a result, Open Web search properties generate less than 10% of total Open Web search revenue. Today, few Open Web search properties can refuse to forgo Google ad revenue altogether — but that is poised to change.
What’s at Stake for Advertisers and Publishers?
The Court is poised to require Google to compete in search to create incentives for open Web search properties to innovate the search experience. Breaking Google’s exclusivity would bring transparency and efficiency to advertisers, as publishers could show their search results or ads or curate those from direct sources.
Whether it’s privacy search or Generative AI, everyone from DuckDuckGo to Apple Safari to your favorite shopping app could show Google and their own search results and make revenue from their search media.
For advertisers, tens of billions of dollars in wasted ad spend is at stake – as well as the return of transparency and control over their budgets. With Google’s exclusivity deals prohibited, these advertisers can “go direct,” reducing costs and gaining transparency.
The Future of Search Will Be Curated and Driven by Consumer Intent
Search on the Open Web will more effectively serve the needs of consumers in today’s increasingly fragmented and modernized search journey.
The Court’s decision suggests that it will fashion the remedy most likely to create competition in the search results and ad markets, similar to the Microsoft remedy in the early 2000s.
A potential structural remedy, such as the divestiture of Chrome and Android, would incentivize Google to participate in search markets where competitors produce innovative user search experiences and deliver transparency and efficiency to advertisers.
However, the remedy phase plays out, and one thing remains certain: the future of search will be built around valuable moments of consumer intent that can open up the market for $500 billion in consumer spending.