David R. Henderson  

Google's Gamble

Milton Friedman argued that th... Germany is "balanced", it's th...

Before getting to today's post, two things:

1. Thanks to all the commenters whom I didn't thank individually for their congratulations on my becoming a Full Professor. As one of my former students said on Facebook, he's glad that I'm finally a full professor because he was getting tired of calling me Half Professor.
2. At the advice of many people, I decided to upgrade my operating system on my Mac to Yosemite. Big mistake. It was in the shop all day Thursday or Friday. So that's why I didn't post on Thursday or Friday.

My guess is that most of you have not followed what has been happening between Google and another web site I occasionally write for, www.antiwar.com. For the longer background, you can read about it in Dan Sanchez, "Don't See Evil: Google's boycott campaign against war photography and alternative media."

One excerpt from Sanchez's article:

On the morning of March 18, Eric Garris, founder and webmaster of the site, received a form email from Google AdSense informing him that all of Antiwar.com's Google ads had been disabled. The reason given was that one of the site's pages with ads on it displayed images that violated AdSense's policy against "violent or disturbing content, including sites with gory text or images."

Disclosure: I used to write regularly, and now I write sporadically, as "The Wartime Economist on antiwar.com. Also, Eric Garris, referred to above, is one of my favorite people in the world.

After Gawker publicized the incident, a Google employee stuck a conciliatory note. Then:

As instructed, Garris removed the code and submitted an appeal that very day. After such a friendly email from the PR guy, he hoped to see the ads restored the next morning. The following day, not only were the ads still gone, but there was yet another message from AdSense in his inbox, informing him that his appeal was rejected because yet another non-compliant page was found: this one a report on the war in Ukraine that included an image of dead rebel fighters. (Contrary to various reports, Antiwar.com's ads were never even briefly restored.)

Go to the site yourself to read the Google person's response.

Garris, not giving up, reached out again to Google to find out what kind of content was acceptable for antiwar.com to qualify for ads and the associated revenue from ads.

Now former antiwar.com writer Kelley Vlahos continues the story:

In their last exchange, Garris asked Google PR rep John Brown if this photo of Yemenis carrying a blanket, ostensibly with an injured person inside, "would be objectionable." Brown, according to the email provided by Garris, responded: "A good rule of thumb is if it would be okay for a child in any region of the world to see that image, it's acceptable."

Vlahos continues:

What would happen if Google really applied this "rule of thumb"? Suddenly, all of the significant war photography of the last century seems at risk, like this grim view of Omaha Beach after the D-Day invasion. What about these images from World War I, Vietnam--could the goal of keeping advertisers happy eventually scrub the historical canon of war's ugly realities, leaving only a bloodless, "family friendly" Madison Avenue vision intact?

Earlier in her article, Vlahos quotes Daniel McCarthy, editor of The American Conservative:
"Advertisers have always been free to withdraw support from a news organization when they're embarrassed by its reporting, but Google is more than just an advertiser: AdSense is the Internet's largest advertising network, and the only reason it's the Internet's largest ad network is because of Google's market power as a provider of search engine and other services integral to most Americans' web use," says McCarthy.

I think McCarthy's "only reason" part is wrong. Google's market power as a provider of search engine services is certainly very important. But it's not the only reason. The other main reason, as Eric Garris told me in a phone call, is that Google made the process so seamless. It had not been that hard to comply with Google policies in the past, said Garris, and so the revenue that came from carrying Google customers' ads was relatively easy money.

That's no longer the case.

Here's what is going on. Google faces a tradeoff. On the one hand, there are probably many advertisers, possibly the vast majority, who don't want their ads to appear alongside pictures of blood and gore, people being tortured, etc. So by being careful that web sites where ads appear do not have such pictures, Google gets more ad revenue than otherwise. On the other hand, Google is upsetting a lot of people who see it as dictating content. This will cause some people to shun Google. I don't know what the right margin is from a strictly profit-maximizing viewpoint. But I do see Google as taking a gamble. The choice it has made seems fairly safe. But if the upset spreads, there could be a role for another competitor.

Postscript: One thing that one should not accuse Google of doing is censoring. Vlahos's title (I realize that authors don't get to pick their own titles--but someone does) suggests that she or an editor thinks Google is censoring. The above-mentioned Daniel McCarthy gives an apt analogy between Google and CBS. In the Vlahos article, she quotes McCarthy:

"So when Google imposes restraints upon what news organization can report, it's not acting like an auto manufacturer that withdraws advertising from '60 Minutes' in retaliation for an expose. It's more akin to CBS itself telling the news program that it can't report anything that wouldn't be suitable for children's television."

CBS, in that case, wouldn't be censoring. But it would be taking the kind of gamble that Google is taking.

To his credit, Sanchez does not accuse Google of censoring. He writes:

Now nobody is suggesting that Google should be forced to change its policy. Of course it has every right to refuse service to anyone for any reason. The issue is whether Google's actions are shameful and corrupt, not whether they should be illegal.

I think he has it right. The "Don't Be Evil" company has become the "Don't See Evil" company.

Comments and Sharing

COMMENTS (7 to date)
Adam writes:

I work in this industry, and I can tell you that this is not about Google or Google's market power. It is about what sort of content advertisers want to have their ads on, on the one hand, and the inability of algorithms to be very nuanced in their targeting, on the other. As a result, companies like Google (they're the biggest player but anyone would have to do the same in their shoes) have to use some fairly blunt instruments when it comes to avoiding that content, such as wholesale blocking an entire site based on a few instances of content deemed objectionable.

Again, this isn't about Google. The real gamble, for Google, would be to _not_ err on the side of blocking too much. Then advertisers might pull out their money in favor of an ad platform which would be willing to. Most of them are already on multiple platforms, so switching costs are low---they would just have to move their spend from one to another.

I also don't think that antiwar photography is at risk. That stuff generates attention, which can be monetized in any number of ways, beyond just automated ad networks like Google's.

mucgoo writes:

Google would have nasty PR problem if people believed it was profiting from placing adverts alongside war crime footage. Maybe there's a niche for a specialised company which can ignore the reputational damage.

But would the anti-war site want the adverts of those who choose to go with this non censoring company?

trent steele writes:

Similar to when free marketeers say that, e.g., Bill Gates deserves all of his money and power because he created so much value, I think that (in this case) Dr. Henderson is making a mistake when declaring unequivocally that Google is not "censoring." Technically he is right and I agree. But it is more nuanced, I believe.

Look, Gates deserves a lot (of credit, of money, etc.). But Microsoft would never have become as rich as "it" is in a free market. It benefits from IP laws and armies of taxpayer funded agents and a subsidized court system for enforcing those laws. The same goes for Google. Let's not even begin with how they got their start with stolen taxpayer dollars in cahoots with the CIA (there are many great links to follow in a thread from Dr. Henderson's post, many of which I'd read before). Google is not a private company, and their actions can therefore (to me) be considered censorship to some degree. It's a very sticky wicket to be sure, but let's not pretend that they are only using the free market to promote themselves and their product. Were they I would heartily applaud their decision and simply switch to a competitor (I just changed my default search engine, btw, though I don't yet know how to get along without G**gleMaps).

This (e.g. the Bill Gates' wealth problem) is one of the things that makes defending freedom, and a free market, very difficult. If Google was built with private money and maintained with private influence I would agree 100% that they are not "censoring," and that they deserve every bit of market share and "power" that they have. But Google is *not* a private company. In fact, as the articles show, they are the #1 visitor to the White House. And not for the weather.

When fascism came to America...

Tom West writes:

Sadly, I think Adam is correct.

As an advertiser, the big fear is that you're associated with something that greatly offends 0.1% but worse, makes a lot larger number uneasy.

On a slow News day, you can find yourself national news attention, and not in a good way. The ranters provide good TV, and sure, most people aren't calling for the product to be burnt at the stake, but if they're made uneasy, your advertising choice has hurt the product.

Far easier just to go with the super-safe. You can get still get nailed, but then at least you can say we tried every possible avenue to make certain we didn't advertise on questionable web sites.

And as for ad competition, I'd say that saying "we're a bit riskier than the competition" doesn't win many accounts.

Still sucks, though.

Daublin writes:

I am not sure this is a change in Google policy, but rather something they have always done that you just never had reason to think about before.

A related example is sexual content. Sex is a large fraction of the Internet's content, whether you measure it by static volume or by dynamic bandwidth usage. Yet, with default settings in Google, you will see hardly any of it.

It's an awkward position to have to delineate what content is acceptible, but it seems hard for them to avoid at least a crude filter. It exacerbates the problem that they don't have a large support staff. Their business model involves lots of small automated sales via web interfaces such as AdWords.

Jeff Cunningham writes:

It can't be surprising that advertisers don't like to see their ads alongside pictures of devastation. In olden days (I was publisher of Forbes Mag) we would manually replace ads in the magazine if they happened on an article that was counter to the image. All magazine's did this including those who may deny it. So Google has merely programmaticized the practice.

It brings up the larger question. Why would a website devoted to something so extraordinary, so alarming (and important) expect the broadest and most generic consumer advertising platform to support it? This kind of journalism calls for new revenue models, targeted advertising, and pro bono funding. It's a reality check in an advertising market that is maturing.

mobile writes:

Meh. Just build your next ad campaign around the concept "CLICK HERE TO SEE THE ADS THAT WERE TOO HOT FOR GOOGLE" and then get your wheelbarrows out of the shed to carry around all your $$$.

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