Featuring:
Nikhil Lai, Senior Analyst and Mo Allibhai, Senior Analyst
Show Notes:
For most of the 21st century thus far, “online search” and “online advertising” have been synonymous with “Google search” and “Google advertising.” Yet two high-profile antitrust cases — paired with the freight train that is generative AI — could derail Google’s dominance and dramatically alter online search and advertising. This week on What It Means, Senior Analysts Nikhil Lai and Mo Allibhai discuss what may lie ahead and how brands and advertisers should prepare.
The episode starts with a brief overview of the two major antitrust cases against Google. The first involves Google’s monopoly in online search, where Google has paid device manufacturers and operating system owners to prioritize Google Chrome and Google Search, thereby stifling competition. The second focuses on Google’s dominance in the ad tech market. The US Department of Justice argues that Google’s control over ad exchanges and ad networks gives it an unfair advantage, allowing it to squeeze out competitors.
The conversation then dips into the evolution of antitrust law and the broader implications of the current cases against Google. The two lawsuits mark “a watershed moment for the way in which [antitrust] law is being interpreted,” says Lai, in that companies offering free products have historically not been considered monopolies. Yet he adds that the impact will likely be limited to Google, rather than spreading to Big Tech more broadly.
The analysts then discuss what the outcomes of the antitrust trials could mean for Google and what a reduction in its power might look like. In the advertising realm — where Google now controls much of the buying and selling of ads — curtailing Google’s influence could result in “stronger-quality ads and better-quality bids [since Google] will be able to focus on that without sort of looking after the back end at the same time,” Allibhai says. On the search side, it may be AI and not the antitrust cases that usher in change, Lai adds. He describes a future in which AI agents acting on behalf of consumers have “conversations” directly with publishers, unmediated by Google, “so the web-based search experience that Google has been building for decades is going to be obsolete.”
Of course, this development would have enormous implications for search marketers and advertisers. As conversational search becomes the norm, people won’t click through to websites, forcing change in how marketers and advertisers measure success. Advertisers will need to reconsider how they allocate their spending. Having a diversified media strategy and, for marketers, being adaptable in terms of skill sets will go a long way.
The conversation also touches on the innovation that may come out of the lawsuits and the opportunities that may arise for Google’s competitors (a boon for Bing?). The episode closes with the analysts offering additional advice for advertisers and brands, so stay tuned for that.