Ginny Marvin says, “When Google and its sibling companies at Alphabet buy ads on its own search engine, the company says it works to ensure that its participation in the ad auction doesn’t “directly inflate” what the other advertisers in that auction end up paying.

The mechanics of those efforts can be hard to follow if you aren’t familiar with the AdRank system Google uses to decide which ads to show based on how much advertisers are willing to pay and the “quality score” assigned to each ad. Our story on Search Engine Land goes into those mechanics. But the bottom line is that despite Google trying to keep pricing neutral in the auction, just being in the auction can have an impact on its customers’ prices. That’s because of what could be called the “limited shelf space” scenario.

If Google were a store: a cereal scenario

Consider Google as if it were a retailer selling cereal, with brands paying for shelf positioning. There is only so much room on the shelf”.

How ads on Google for its own products can impact the prices other advertisers pay

Marketing Land

Sharing is caring