IAA Finds Advertisers Wary of Google

Survey Underwritten by Microsoft Shows Concern About Size, Market Share

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NEW YORK (AdAge.com) -- The Department of Justice may have shuttered the Google-Yahoo search deal two months ago, but Microsoft is still working the court of public opinion.

The latest evidence: The Redmond, Wash.-based software company is an underwriter of a recent International Advertising Association survey in which 100 of its members responded to questions about search-advertising competition, the Google-Yahoo deal and future attitudes about regulatory action.

IAA Executive Director Michael Lee said while the survey was partially underwritten by Microsoft, which he noted is an IAA corporate member, the questions were created by the IAA independent of Microsoft.

"The idea of the survey was an internal IAA suggestion way back in the summer," he told Ad Age in an e-mail. The IAA is clarifying Microsoft's involvement when it releases the study today, and Mr. Lee emphasized that the IAA controlled the content. "It is our study," he said. "The results ... are what they are, no editing on anyone else's part."

The results indicate that advertisers are still concerned about Google's size and market share, whether that was a naturally incubated fear or one inspired by Microsoft's lobbying: 65% said there is one dominant player in the online ad market and that there are "limited choices and price options for online advertisers"; 85% said it's important a strong competitor to Google emerges in the online advertising market.

Data collection
Microsoft, of course, would like to be that competitor and was the major opponent of the Google-Yahoo search deal, as well as Google's acquisition of DoubleClick, both of which were reviewed by governmental agencies for competitive concerns. DoubleClick was more successful than the recent could-have-been Yahoo deal.

A February Wired article suggest things are about to get worse for Google, as Microsoft and AT&T, which some view as a one-day Google competitor, throw their formidable lobbying efforts into attacking Google's data collection and privacy.

On one hand, it hardly seems like a fair fight, considering both AT&T and Microsoft have had years in Washington learning the system and both are in the ad industry, of course, as peers with other big advertisers, spending $3.2 billion and $959.5 million on marketing, respectively. Still, there's an argument Google that could be communicating better with advertisers, should be more open about certain practices -- particularly how it sets minimum bids and determines paid-search placements on its search engine. (Lack of transparency in these parts of Google's business was a sticking point with more than 80% of the IAA survey respondents.)

"From my vantage point at the IAA, all the players in the industry need to be engaging," said Mr. Lee. "People do feel Google is very dominant, because it is. From a business point of view, some people think Google is perhaps a little bit distant."

Incidentally, it may be the right time for Google to tackle this criticism. It's the first time in almost two years that Google is not preoccupied lobbying for or against a deal. The ink had barely dried on Google's long-reviewed acquisition of DoubleClick before three months later, in June 2008, it was embroiled in the review of the Yahoo search deal. Google plans to use this time to tell its story in Washington and on Madison Avenue without being in the middle of a regulatory investigation.

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