Google denies manipulating ad auctions in resurfaced SMX clip

Google denied manipulating ad auctions at SMX Advanced 2015 – eight years before admitting it actually does.

During the conference’s keynote speech, Google Ad executive Jerry Dischler told the audience:

• “Full stop, we are not manipulating search results or manipulating the ad auction in order to increase profits. That’s just not what we do.”

Fast-forward to the 2023 federal antitrust trial, Dischler completely backtracked and told Judge Amit Mehta that the search engine “frequently” changes the auctions it uses to sell search ads without telling advertisers, increasing the cost of ads and reserve pricing by as much as 10%.

Why we care. This complete U-turn will likely raise doubts over Google’s reliability at a time when its trustworthiness is already being questioned.

How the tables have turned. The SMX Advanced 2015 clip was resurfaced by Tinuiti’s VP of Research, Andy Taylor, who claims Dischler made the denial in response to a presentation he had just given. He said:

• “When I presented RKG’s data at SMX Advanced that year, the Google spokesperson who responded in their keynote Q&A to a question regarding my findings with a similar dismissal was…Jerry Dischler.”
• “My presentation from that show, which showed numerous data points that indicated Google was manipulating minimums and driving up CPC at the time.”
• “Lot of victory laps to be had…Oh how the turn tables.”

Why has Google been tweaking search ad prices? Dischler claimed that staff were “shaking the cushions” to find ways to ensure his team met revenue targets given to Wall Street by Ruth Porat, Google’s Chief Financial Officer. In an email he sent to his team back in May 2019, he wrote:

• “If we don’t meet quota for the second quarter in a row and we miss the street’s expectations again, which is not what Ruth signalled to the street, so we will get punished pretty bad in the market.”
• “I care more about revenue than the average person but think we can all agree that for our teams trying to live in high cost areas another $100,000 in stock price loss will not be great for morale, not to mention the huge impact on our sales team.”

What has Google said? Following Dischler’s comments, a Google spokesperson told Search Engine Land:

• “Search ads costs are the result of a real-time auction where advertisers never pay more than their maximum bid. We’re constantly launching improvements designed to make ads better for both advertisers and users.”
• “Our quality improvements help eliminate irrelevant ads, improve relevance, drive greater advertiser value, and deliver high quality user experiences.”

Deep dive. Watch the SMX Advanced 2015 keynote speech to hear Dischler’s comments in full, and read our Google antitrust trial updates for all of the latest developments in this case.