Google’s traffic acquisition costs (TAC) have been climbing. As Google’s ad revenues grow, so does the money it pays to partners and distributors. Investors are particularly sensitive to this issue. In response to investor questions, Alphabet CFO Ruth Porat explained recently that Google’s increasing traffic costs are partly about mobile and programmatic growth, which have different payment structures and higher TAC. Last year, Google’s ad revenues were $90.3 billion; its TAC was $16.8 billion (other cost of revenues was $18.3 billion). Alphabet cost of revenues, including TAC Source: Google 10K filing 2016 As Bloomberg reports, investors worry that increasing TAC will squeeze margins and make Google less profitable. In Alphabet’s 10K filing from 2016, the company said the following about rising TAC: In this multi-device world, we generate our advertising revenues increasingly from mobile and newer advertising formats, and the margins from the advertising … [Read more...] about Investors anxious about Google traffic acquisition costs, which regulation could further increase
Traffic regulations 1976
This fall, Google made its links to its millions of Place pages even more prominent on the first search results page, pushing sites such as TripAdvisor.com farther down the page for searches on "Berlin hotels," for instance. Place pages for businesses give basic information such as location and hours as well as a summary of user-generated reviews from sites like Citysearch and Yelp. Carter Maslan, a Google product management director, acknowledged "a little bit" of tension between Google and local-information sites. But he said the changes are meant to improve users' experience by getting them more information about businesses faster, and to provide links to review sites. Upset over lost traffic To some degree this is about publishers "settled expectations" and changes in the Google algorithm disrupting them: "we're getting less traffic than we used to." As the WSJ piece points out Bing operates in a way that is similar, often referring traffic to its own sites. In the broader context … [Read more...] about Should Google Be Allowed To Send Itself Traffic?
If I were a betting person I’d say that the European Commission and FTC antitrust investigations against Google will wrap up without any major “structural” changes or dramatic new rules imposed on the company. Indeed there were premature reports that Google had already settled with the EU. An announcement of some sort is imminent I suspect. In the US a number of legal scholars (both independent and sponsored by Google) have come forward to argue that under the current antitrust framework Google would potentially win any case brought by the feds. In addition a new FTC nominee disfavors antitrust action against Google. Beyond this, a now somewhat more competitive mobile landscape (i.e., Apple Maps, Kindle Fire-Bing) and the prospect of Facebook going into search give Google ammunition to argue that not only is the digital landscape more dynamic it’s increasingly competitive (depending on how you scope the market being discussed). On the other side anti-Google … [Read more...] about Seeking To Pressure Regulators, FairSearch Announces New Members, Issues Missive Seeking “Meaningful” Remedies
Axel Springer, Germany’s largest publisher and the owner of Europe’s largest newspaper, has said it wants back in to snippets. According to Reuters, the German publishing giant revealed that traffic to its four largest online properties from Google search results “had fallen by 40 percent” and referrals from Google News had dropped “by 80 percent in the past two weeks.” We previously reported on the decision by VG Media, a consortium of German publishers including Axel Springer, to opt back in to snippets because of a significant traffic decline that would have potentially caused some of its members “to go bankrupt.” Google has long maintained in its disputes with publishers that it sends valuable traffic their way. This episode seems to vindicate that argument. Yet, the decision to opt back in to snippets is not a truce but a temporary cease fire as the German publisher bitterly acknowledged its dependence on Google traffic. In the wake … [Read more...] about Loss Of Snippets Caused 80 Percent Traffic Drop
The constant stream of news on legal or legislative initiatives attempting to regulate Google’s organic search results creates a climate of conflict and fosters unrealistic expectations among SEOs. And that diverts attention from what the business should really be all about: managing user experience. Instead of taking a stand and possibly appealing to common sense, let’s look at the realities of search and how actionable SEO lessons can be drawn from them. One step at a time. 1. Google Is A Public Corporation As a profit-driven company, Google has a vested interest in, and a track record of, constantly improving its products. It has demonstrated indifference towards the visibility of individual sites in its organic search results and an unrelenting drive to keep search engine users — not webmasters — happy. 2. Google Can’t Be Legally Forced Into Driving Free, Organic Search Traffic To Individual Sites Many individuals and companies, including even some … [Read more...] about Regulating Google Search — A Reality Check