• by Laurie Sullivan  @lauriesullivan, September 8, 2024

Pavlo Prannyk, CEO of the small family-owned business olpr Leather Goods, has choices when it comes to where he runs ads.

The company's founder mostly runs advertising through Google Ads and a bit on Amazon and Etsy, but he also has tried platforms such as Bing, Pinterest, Reddit and TikTok.

“I don’t know what I would do without Google Ads,” Prannyk says. “I would have some organic customers come to the website, but it’s not enough to pay my workers or pay rent.”

Prannyk’s company also buys ads on Amazon, but advertisers are required to pay nearly 20% in commission fees.

He said Amazon is a bigger “evil” partner than Google because it is “ripping off all small businesses, because they push you” to give consumers the lowest price on the products sold.

Costs include paying for ads to run and a 20% commission for sales on the platform, and businesses are required to use their fulfillment centers to fulfill products.

Amazon, Etsy, and Google each have their own ad platform. Prannyk must manage it all. He also sells product on his website, and must drive search traffic to each of its platforms and marketplaces.

Prannyk shared his thoughts in a virtual press conference  hosted by the Connected Commerce Council ahead of this week’s Google Ads antitrust trial.

Small business owners, publishers and others on the call expressed concerns about possible outcomes of Google's U.S. Department of Justice antitrust trial, which is set to begin Monday. Rather then seeing lower costs, some believe they may need to hire agencies to help them through processes or the use of multiple companies. 

Google during the weekend in a post acknowledged the ability to buy online ad "cheaply and simply" could be challenged. About 69% of U.S. small and medium size businesses use digital ads to find new customers. 

Display ads are primarily the way to connect with consumers, says LaKita Anderson, who owns Simply LaKita, a recipe website. 

Anderson started her company in 2013, and began by partnering with brands on sponsored content. This process required many meetings and negotiations, and pressure to keep up was difficult. She experienced burnout from the process, so she began working to make money from her blog through display ads, which have now become her main source of revenue.

Her biggest concern is that Google's ads would become less effective with any requirement change based on a DOJ decision to alter the company. 

Shifting her ad budget to search engines or social media would have a direct impact on revenue, she says. "I would have to bring in a person to manage all the different platforms," Anderson says. "I have a very small team. Everyone wears multiple hats, and we are already stretched to the max. We would have to bring someone in to manage it all and manage the process."

From Anderson's perspective, the lawsuit seems to address a problem that does not exist.

Digital marketing expert Salil Gandhi, who also participated in the discussion, works with many small businesses such as a local neighborhood bars and doctors' offices, including many businesses that have only one location. His agency supports clients that have small budgets.

“There’s a reason why small businesses and agencies use Google Display Ads,” he says, pointing out that Google is not the only big display ad company. Apple and Facebook have large display ad businesses with multiple millions of users.

Gandhi doesn't “think people who have brought up this lawsuit understand the impact,” and beneficiaries of a Google breakup will become small ad agencies that will need to manage the process for small businesses.

He agrees that while reducing cost by increasing competition makes sense, that thinking will mostly impact large businesses with major advertising budgets.

Google built its ad business on serving small companies. The vast majority of small businesses he has worked with have an ad budget of less than $500 per month.  

“Saving a nickel or two on display ads won’t impact them that much,” Gandhi said, referring to small businesses. He believes cost and time spent managing multiple platforms will far out way cost saving that they get potentially by breaking up Google. While the lawsuit has good intentions, he says, it "has not been thought through in terms of the actual impact.”

Applying traditional advertising rules of competition in an online digital media world of supply and demand do not add up, says Beth Egan, associate professor of advertising at Syracuse University, who started a career in advertising before the internet.

“The risks are much greater to small businesses then large companies,” she said. “The Coca-Colas of the world will figure it out.”

If Google is broken up and stops funneling ads to third-party websites like the one owned by LaKita Anderson, Egan asks, “then were does she get the revenue from?”

“The Sherman Act and all the antitrust legislation, which is very important to keeping our capitalist society alive and well, is usually put in place to protect consumers,” Egan says. “In this instance it is not. Ad exchanges were created to solve a problem, but as the number of websites and publishers grew, it became impossible to connect with all. Google solved a problem, she adds.

Amazon, Microsoft, The Trade Desk, Walmart Retail Media Network and many others have created competition for Google.

Advertisers have the option to use these and many more. The challenge for Google is that it initially had more data on consumers compared with other companies, Egan says, but adds that that is changing.

“Apple also has a lot of data,” she says. “Don’t let them fool you.”