Google Laughing in the Face of the FTC – Raven, SEOMoz, and the AdWords API

What is Going Down?

If you are in the search marketing community, you are likely familiar with Raven Tools and SEOMoz. These two SEO tool leaders provide incredible tool sets for webmasters looking to improve their search performance – in both paid and organic. They aggregate data from numerous sources including the Google Adwords API. Back in September, SearchEngineLand.com reported that Google had begun a process of revoking a large number of AdWords users’ API access and then provisionally allow access. This explained why SEOMoz saw intermittent access of the API over the last several months. We have now learned that both SEOMoz and Raven Tools have lost their AdWords access.

Why is Google Doing This?

From Google’s perspective, the AdWords API is to be specifically used by AdWords customers to help improve their own campaigns. In general, they are not to be used as a part of an exposed public or private tool, even if the expressed use is to improve AdWords campaign performance. In reality, the AdWords API is one of Google’s biggest liabilities for numerous reasons. Here are just a few…

1. Traffic volume data provides competitors with information on target markets
2. Bid prices allow for advertisers to automatically compare prices and, potentially, determine better advertising opportunities
3. Bid prices allow competitor ad networks to price their products appropriately

Google’s Adwords API, despite being paid, is kept under incredibly strict usage guidelines that are enforced regularly and without much forgiveness. Why would Google create a paid service and then restrict the number of its customers and the volume of its usage so carefully? To protect industry dominance.

What Does the FTC Have to Do With This?

The FTC has been investigating Google for monopolistic practices for quite some time. While we can quibble back and forth about whether Google is genuinely a monopoly, there is little to no argument that Google is not trying to behave like one. The New York Times points out that “The investigators are… looking into whether Google’s automated advertising marketplace, AdWords, discriminates against advertisers from competing online commerce services like comparison shopping sites and consumer review Web sites.”

The tight reigns on the Adwords API do just this. You cannot know the cost of using AdWords without actually being a logged in customer of AdWords. The prices are private and restricted. It is a violation of their Terms and Conditions to extract data in any other way than those expressly permitted by Google (T&C Section 4(B)). This would be akin to WalMart refusing to publish their prices in any public fashion and then refuse to allow you to log-in and “extract” their prices in any way other than what they expressly tell you is OK so you know if you are getting a good deal – AND THEN STARTED ENFORCING IT by booting people out of the store who were caught writing down prices or seeing how many items were still in stock.

This kind of activity is alright when there are a bunch of other stores in the area, but when Google is by far the biggest advertising game in town, it starts to look very suspicious.

Hubris

The big word that comes to me here is hubris. Google is over-confident that the FTC is not willing to take them to court. Winning monopoly cases is expensive and right now the Federal Government doesn’t exactly have a huge budget. But this kind of activity simply laughs in the face of the FTC right as they are planning to release their findings. If I were Google, I would be more careful. But, alas, I am not. I’m just a guy trying to run a business.

Addendums…

Great feedback is coming in from the search community. Andrew Dumont mentioned that by not allowing users to purchase ads from within their app, they are in violation of the Terms & Conditions of the API. If I wasn’t clear above, I don’t mean to state that people are wrongfully having their API access revoked. The T&C are being fairly enforced. My intent was to note that these rigorously enforced T&C serve a very specific purpose of intentionally hiding both their pricing and their inventory to make it difficult for consumers to compare costs and opportunities with both paid and free alternatives.