By Douglas MacMillan
Starting on Thursday, Google's Chrome browser will block certain
types of online advertisements, a change Google is describing as
user friendly. But some in the industry say the ad giant's move is
self-serving, and they contend Google overly influenced the process
that selected which ad types to block.
Google, a unit of Alphabet Inc., describes the new policy as the
work of a collective, industry-wide effort designed to rid the
internet of spammy ads like pop-ups, and make other ads more
appealing to users.
Some people involved in that initiative say it wasn't a true
joint effort but a Google-dominated one that, while reducing ads
widely considered annoying, also could ultimately help Google's
bottom line.
Google is a behemoth in the digital ad industry. About $3 out of
every $10 spent on digital ads goes to Google, which generated over
$95 billion in ad sales last year. Some critics of the company's
new policy say advertisers may shift more dollars to Google sites
and products, which are less likely to be blocked by the Chrome
browser. The chrome browser is used by more than 59% of internet
users.
Google's ad-blocking effort is unfolding as the U.S. and
European government officials have raised concern about the growing
economic power of tech giants. Margrethe Vestager, the European
Union's competition chief, last year said she would follow the
Chrome ad blocker's effects closely.
"This looks like an effort by Google to use its strong market
position in browsers in order prevent users from adopting
third-party apps that block ads Google wants to make money from,"
said Gary Reback, a Silicon Valley antitrust lawyer who helped
persuade the Justice Department to launch its antitrust case
against Microsoft Corp. in the 1990s. He now represents an
ad-blocking company that has filed an EU antitrust complaint
against Google in a separate matter.
Google denies having undue influence, saying it is one of many
companies involved in developing the rules through the Coalition
for Better Ads, a group of advertisers, publishers and tech
companies that set the ad-blocking rules. A Google spokeswoman said
the company remained "committed to improving the online ad
experience, working in collaboration with the advertising industry"
through the coalition.
In a press release announcing the coalition in September 2016,
Google's name appeared once, in the final paragraph, in an
alphabetical list of 18 members, including Facebook Inc., Procter
& Gamble and News Corp., owner of The Wall Street Journal.
Several coalition members said Google conceived of the coalition
and performed the bulk of the research that informed its
rule-making process. Google executives were among the most
influential voices on its committees and helped steer its decision
making to favor its own ad formats, the people said.
Google began conducting research on what types of ads consumers
found most annoying in 2015. The following year, Google executive
Scott Spencer met with advertising and publishing executives to
gather support for a new initiative that would essentially curb the
role played by ad blockers, according to people who were
present.
In the meetings, Mr. Spencer proposed blacklisting certain types
of ads, the people said. The ad standards could be voluntarily
adopted by industry groups, or even enforced by browsers or
ad-blocking software, he said. Executives were asked to sign
nondisclosure agreements barring them from discussing the
meetings.
Venable LLC, a Washington-based law firm, was hired by three ad
trade groups including Interactive Advertising Bureau to set up and
manage the coalition, said the firm's chairman Stuart Ingis.
Soon after the coalition was established, it voted to adopt
Google's research, Mr. Ingis said. Google had surveyed consumers on
dozens of ad formats and ranked them by how "annoying" they found
each one. Long, skinny rectangles on the side of the screen were
found the least annoying; full-screen messages with countdown
timers were among the most annoying.
The coalition worked with Google to improve the research,
including deciding on a number of additional ad formats to test,
said one person involved in the process. Google tested 55 desktop
ad formats and 49 mobile formats and presented the findings to the
group.
The coalition ultimately deemed 12 ad formats unacceptable.
Google's leading role in the standard-setting process troubled
some of the coalition's members, who observed that the blacklisted
ad formats generally don't apply to Google's own business,
according to people who part of the process. Google generates most
of its revenue from text search ads and rectangular display ads,
rather than the visually rich media ads that will be banned by the
coalition.
"They are creating a standard that doesn't apply to them," said
Ryan McConville, president of mobile-ad startup Kargo, one of 17
members on the coalition's board.
Some of the members lobbied the coalition to make exceptions,
including Facebook, which argued that the social network should be
excluded from a rule banning videos that automatically play with
sound. Bounce Exchange Inc., a pop-up ad maker, argued the pop-up
ad rule should be changed to exclude ads that appear when a user is
idle for more than 30 seconds. Both efforts were successful.
Google didn't test one of its own most prominent ad formats, the
ads that run on YouTube videos for several seconds before users can
skip them.
The Google spokeswoman said the coalition plans to test video
ads in the future. Some of Google's own ads are likely to be
blocked by Chrome since non-compliant sites will have all ads
blocked, she added.
Mr. Spencer said Google has given ample warning to the affected
publishers. He said that less than 1% of the web's most visited
sites -- under 1,000 of them -- are currently out of compliance
with the rules.
--
Benjamin Mullin
contributed to this article.
Write to Douglas MacMillan at douglas.macmillan@wsj.com
(END) Dow Jones Newswires
February 14, 2018 11:09 ET (16:09 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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