Speaker 1: Hi, I'm Carol Masser and I'm Jason Kelly. It's time
Speaker 1: for this week's cover story. Well, Carol. For millions of
Speaker 1: small business owners looking to advertise during the pandemic the Internet,
Speaker 1: it's become an even more essential avenue of commercial life.
Speaker 1: That's right, Jason, And for many reliance on Google with
Speaker 1: its near monopoly of web search and search advertising, well,
Speaker 1: it has only grown over the past few months, especially
Speaker 1: for therapist, lawyers, or anyone else offering a service. Other
Speaker 1: search engines are essentially afterthoughts, and it's not like anyone
Speaker 1: else goes to Facebook or Amazon to buy a therapy session.
Speaker 1: So when Google's prices surge, small business owners can find
Speaker 1: themselves in a bind. And while being big or charging
Speaker 1: high prices, it isn't an antitrust violation. The US Justice
Speaker 1: Department and almost every state attorney general they are preparing
Speaker 1: antitrust cases that are expected to allege that Google's dominance
Speaker 1: is illegal. Google dominates search ads more than ever is
Speaker 1: working through that. If you're a therapist or any small
Speaker 1: business owner, really you live and die with Google. Regulators
Speaker 1: may step in. By Mark Bergen and Shelley Banjo in March,
Speaker 1: Ellen Ross's business came to a standstill. Ross is a
Speaker 1: psychotherapist accustomed to sitting across from patients, helping them deal
Speaker 1: with their deepest traumas and fears. When the pandemic started
Speaker 1: shutting the economy down, Ross shut her San Jose office too.
Speaker 1: She nixed plans to hire another therapist and began adjusting
Speaker 1: to video therapy, which meant, among other things, building breaks
Speaker 1: in between sessions. I can't look at a screen as
Speaker 1: long as I can interact with human beings, says Ross,
Speaker 1: who spent years counseling in hospitals before setting up her
Speaker 1: own practice in and then there was the Google problem.
Speaker 1: In the before times, Ross spent about twenty dollars a
Speaker 1: day on search ads to promote her practice. That worked
Speaker 1: well enough, people would search for things like therapist near me,
Speaker 1: and she would bid for those terms at Google silent auction.
Speaker 1: If she won the auction, adds for her practice True
Speaker 1: North Psychology would appear at the top of search results.
Speaker 1: Google charged for each click. In twenty nineteen, she spent
Speaker 1: about fifty five hundred dollars. Starting in April, Ross's calculus changed.
Speaker 1: Americans were stuck at home, some juggling home schooling and work.
Speaker 1: Others newly jobless, They were anxious and searched the web
Speaker 1: for help, sometimes looking for video counseling. Ross noticed that
Speaker 1: the prices for her regular keywords jumped sharply. She was
Speaker 1: still finding patients, though they often arrived after trying one
Speaker 1: of the proliferating virtual therapy start ups such as Better
Speaker 1: Help and talk Space, and it was becoming prohibitively expensive
Speaker 1: to buy the Google ads to attract them. Ross wasn't
Speaker 1: sure what to do. Google, as she well knew, has
Speaker 1: a near monopoly in web search. It has eighty seven
Speaker 1: percent of the U S market by some estimates. Its
Speaker 1: next largest competitor, Bing has about seven percent. So Ross
Speaker 1: you she couldn't simply stop buying Google ads. If she did,
Speaker 1: she'd lose out on any new business. But continuing to
Speaker 1: pay so much didn't seem sustainable either. I'm a fairly
Speaker 1: good psychologist, she says, I'm a terrible marketer. Ross is
Speaker 1: one of millions of small business owners whose reliance on
Speaker 1: Google has only grown during the pandemic, when the Internet
Speaker 1: has become the main avenue of commercial life. That dependence
Speaker 1: is at the heart of the most high profile antitrust showdown.
Speaker 1: Since Uncle Sam went after Microsoft in the nine nineties,
Speaker 1: the US Justice Department and almost every state attorney general
Speaker 1: are preparing antitrust cases that are expected to allege that
Speaker 1: Google's dominance is illegal. High prices in and of itself
Speaker 1: isn't an anti trust violation. Neither is being big, says
Speaker 1: Herbert hoven Camp, a professor at the University of Pennsylvania
Speaker 1: Kerry Law School. The bigger question is whether Google is
Speaker 1: abusing its power. Google got a preview of the government's
Speaker 1: likely argument on July ninth during a five hour Congressional
Speaker 1: anti trust hearing. It opened with questions about Google's stranglehold
Speaker 1: on search and included lawmakers calling four tech chief executives
Speaker 1: cyber barons and unregulated bullies. Sunder Picha, I, Google's well
Speaker 1: dressed and reserve chief executive officer, began by ticking off
Speaker 1: family owned US companies that have benefited from Google ads
Speaker 1: and services. Nearly one third of small business owners said
Speaker 1: that without digital tools, they would have had to close
Speaker 1: all or part of their business During COVID, he said
Speaker 1: via video feed from Google's headquarters. The company gave out
Speaker 1: three hundred and forty million dollars in add credits to
Speaker 1: small companies as part of its pandemic response. In his testimony,
Speaker 1: pitch I also asserted that the company operates in competitive
Speaker 1: global markets. The point was reinforced the following day when
Speaker 1: Google announced that its ad intake fell for the first
Speaker 1: time ever because of the crisis. The company still finished
Speaker 1: the spring quarter with on one billion dollars in cash
Speaker 1: on hand. When it comes to advertising, Google likes to
Speaker 1: broadly define the market it competes in to include even television,
Speaker 1: and it likes to point to its fierce rivalry with
Speaker 1: Facebook and Amazon. But for therapists, lawyers, and anyone offering
Speaker 1: a service, this argument is bogus. People peruse Facebook for
Speaker 1: the latest news or baby photo, not for psychological care.
Speaker 1: No one goes to Amazon to buy a therapy session.
Speaker 1: Other search engines are afterthoughts. Ian Palombo, a therapist in Denver,
Speaker 1: bought bing ads right after the pandemic hit. But it
Speaker 1: was such a throwaway proposition he didn't even check to
Speaker 1: see how they did. I mean, it's bang right, he says.
Speaker 1: Therapists talk about Google like they would about any utility.
Speaker 1: It's just another check, only this one goes to the
Speaker 1: fourth biggest company in the world and comes with no guarantees.
Speaker 1: It's a lot like a poker table at the casino,
Speaker 1: says Daniel Weindler, founder of marketing for Therapists. Anyone can play,
Speaker 1: but unless you know what you're doing, you're likely to
Speaker 1: get rolled. The last time the global economy cratered. In
Speaker 1: two thousand nine, Google released its first economic impact report.
Speaker 1: Regulators and other critics were questioning its sway over web publishers,
Speaker 1: whether the search engine was too big and powerful. Peppered
Speaker 1: with glossy, smiling photos of mom and pop business owners
Speaker 1: in each state, Google's reports showed that far from consolidating
Speaker 1: economic power, the company was helping the little guys. A
Speaker 1: bookstore in Mishawaka, Indiana, a lighting supplier in Kinnebunk, Maine,
Speaker 1: a remodeling service in Aberdeen, South Dakota, each had grown.
Speaker 1: Google said thanks to Google Ads. Selling therapy, though isn't
Speaker 1: as straightforward as selling a book or a light fixture.
Speaker 1: It can be expensive and for some still comes with
Speaker 1: the stigma. There is just a really significant human need
Speaker 1: that a lot of us struggle with, says Wendler, who's
Speaker 1: been helping therapists by Google. Ads for the past five years.
Speaker 1: At thirty two, with his rectangular glasses and untidy facial scruff,
Speaker 1: he could pass for an engineer at the Google Plex.
Speaker 1: He also has Asperger syndrome and wrote a guide book
Speaker 1: Improve Your Social Skills, full of tips for others with it.
Speaker 1: Those interests prompted Wendler to pursue a career as a counselor.
Speaker 1: While in grad school. He set up a marketing practice
Speaker 1: for therapists and now handles the budgets for roughly twenty
Speaker 1: of them a month. He wrote another book, Clicking with
Speaker 1: Clients Online Marketing for private practice therapists. In the first
Speaker 1: months of the pandemic, he saw the prices of keywords
Speaker 1: related to therapy jump as much as fift with some
Speaker 1: terms that had once cost seven dollars or eight dollars
Speaker 1: fetching ten dollars a click. Prices went higher as searches
Speaker 1: and buyers piled on. There's only so much inventory, he says,
Speaker 1: referring to the slots available for search page ads, that
Speaker 1: is driving prices up, up, up. Up. Prices are a problem.
Speaker 1: But even more frustrating for Wendler and other search by
Speaker 1: fires are the tweaks Google has made in recent years
Speaker 1: as it pushes to automate wherever it can. Today, there
Speaker 1: are two basic ways to buy search ads. A business
Speaker 1: owner can pick out search terms manually, or take the
Speaker 1: approach Google prefers, hand over a budget, select an industry,
Speaker 1: and let Google software figure out which ads will get
Speaker 1: the most clicks in Google ease. These are known as
Speaker 1: smart campaigns. The idea is to make search ad buying
Speaker 1: as simple as possible, while Google uses what it promises
Speaker 1: is the latest and greatest in machine intelligence to maximize
Speaker 1: profits for itself and its customers. Our advertising tools are
Speaker 1: designed to help small businesses compete on a level playing
Speaker 1: field with large businesses, even Fortune five hundred companies, says
Speaker 1: a Google spokesman. Local businesses, even those without marketing expertise,
Speaker 1: can create compelling ads in minutes that reach the right audiences.
Speaker 1: But automation doesn't work terribly well for therapists. Many are
Speaker 1: specialists focusing on, say, couples, counseling, or trauma, just stinctions
Speaker 1: that Google software doesn't necessarily make. As a result, some
Speaker 1: therapists who use the automated approach end up entering auctions
Speaker 1: for broader keywords where the clicks don't lead anywhere. For
Speaker 1: one of Wendler's clients, Google system once suggested PTSD, a
Speaker 1: search many people make for idle research rather than to
Speaker 1: find an expensive counselor Another client wasted a tenth of
Speaker 1: his two thousand dollar monthly Google ads budget this way
Speaker 1: before Weindler caught the problem. In another feature, Google even
Speaker 1: automatically writes ad copy if you're selling a widget or something,
Speaker 1: maybe that works for you. Wendler says people are less
Speaker 1: thrilled with psychologists who sound like they've been programmed. That
Speaker 1: hasn't stopped Google from pushing therapists to adopt smart campaigns.
Speaker 1: Wendler recalls Saturday calls from Google representatives asking him to
Speaker 1: turn on automated ads for his clients. He politely declines
Speaker 1: and asked them not to call again. They wait three
Speaker 1: months and call again. Google is essentially competing with itself,
Speaker 1: he says. I think Google's ultimate goal is that you
Speaker 1: give them your credit card, and that's the only thing
Speaker 1: you do. The control such companies as Google exert over
Speaker 1: their markets is one key reason lawmakers are trying to
Speaker 1: check big text monopoly power. Consider Amazon's subscribe and Save feature,
Speaker 1: which lets shoppers place a standing order for raisin brand
Speaker 1: or toilet paper. It's convenient, and it reduces the incentive
Speaker 1: to try competitors. It locks you in, says Luigi's Ngalas,
Speaker 1: a finance professor at the University of Chicago Booth School
Speaker 1: of Business. The same could be said of Google's smart campaigns,
Speaker 1: But Wendler and other search marketers say Google's drive to
Speaker 1: automate has dovetailed with the reduction in the quality of
Speaker 1: customer support. For years, a search ad buyer could call
Speaker 1: a Google helpline and get someone on the phone. Starting
Speaker 1: about two years ago, Google began outsourcing these services, and
Speaker 1: buyers say the quality of support quickly diminished. It feels
Speaker 1: like you're speaking to someone who's just talking out of
Speaker 1: a binder, says Matt Kaufman, founder of Therapy Practice Accelerator,
Speaker 1: a healthcare marketing firm. During the pandemic, Kaufman says he
Speaker 1: hasn't been able to get a human on the phone
Speaker 1: at all. Google moved its customer support to chat bots.
Speaker 1: The Google spokesman says the company scaled back support services
Speaker 1: because of COVID nineteen. Practically every antitrust investigator who's looked
Speaker 1: into Google has seen a web presentation called Focus on
Speaker 1: the User. It was created in fourteen by Yelp and
Speaker 1: trip Advisor, local review sites and longtime Google critics, whose
Speaker 1: central complaint was that Google was expanding its ambitions beyond
Speaker 1: mere web search in ways that hurts small companies. As
Speaker 1: rivals tell it, Google search engine once did one thing
Speaker 1: spit out a list of ten blue links, but starting
Speaker 1: in the mid two thousands, search results began to include
Speaker 1: above the links actual answers to questions like how hot
Speaker 1: is the sun and what are the signs of heat stroke?
Speaker 1: Google pulled these facts from other websites, resulting in searches
Speaker 1: where consumers didn't bother clicking on any links. Yelp and
Speaker 1: others argue this represents a theft of their intellectual property,
Speaker 1: siphoning off their web traffic. Gradually, this extended to phrases
Speaker 1: like where is the best Sichuan food in London? With
Speaker 1: the top results from Google Maps After Maps, Google did
Speaker 1: the same with its own services in travel, hotel booking,
Speaker 1: and shopping. In each case, Google says it shows the
Speaker 1: best results for consumers. Competing businesses say this is an
Speaker 1: open and shut abuse of monopoly power. Google has done
Speaker 1: something similar with healthcare. At times, the company has seemed
Speaker 1: intent on capitalizing on doctor Google, that ubiquitous modern phenomenon
Speaker 1: of self diagnosis by web search. In twenty fifteen, Google
Speaker 1: teamed up with the Mayo Clinic to begin listing symptoms
Speaker 1: and treatments directly in search results, rather than showing web links.
Speaker 1: At that point, Google said one in twenty searches were
Speaker 1: health related. About two years ago, the company hired David Feinberg,
Speaker 1: a hospital executive and former psychiatrist, to lead a new division,
Speaker 1: Google Health. Fineberg's remit is to create an electronic medical
Speaker 1: record system for hospitals that functions like Google Search, and
Speaker 1: to help revamp Google searches about health. His division created
Speaker 1: a special search page for anything related to COVID nineteen
Speaker 1: in May, and rolled out features specifically about mental health.
Speaker 1: People can now book virtual care appointments directly in Google Maps.
Speaker 1: Searches for terms such as anxiety disorder or PTSD produced
Speaker 1: buttons linking to a clinically validated questionnaire and other resources.
Speaker 1: A lot of folks come to Google and ask us questions,
Speaker 1: Fineberg said in a May interview with YouTuber Dr Mike Varshavsky.
Speaker 1: You can do your own in essence screening for depression
Speaker 1: and anxiety, so then you can see that you're not alone.
Speaker 1: That he was speaking on YouTube, Google in house streaming
Speaker 1: service was fitting. Those self assessments happened directly on Google,
Speaker 1: rather than on the sites of would be competitors such
Speaker 1: as web md or zoc. Doc Feinberg, through a representative,
Speaker 1: declined to comment. Google says that he doesn't control paid ads.
Speaker 1: These Google owned mental health checkups on Google's own search
Speaker 1: engine compound a problem marketers have complained about for a decade,
Speaker 1: namely that it's very hard to attract users without paying
Speaker 1: Google for ads. If someone near Google's headquarters in Mountain View, California,
Speaker 1: searches for treat depression, they might see ads for one Medical,
Speaker 1: a concert health service in which Google is itself an investor,
Speaker 1: plush Care, a tech company that specializes in online prescriptions,
Speaker 1: and Better Help, a virtual counseling service. To the right,
Speaker 1: they'd see an information box where Google lists various treatment options.
Speaker 1: The so called organic search results the old ten blue
Speaker 1: links come below all of that. In fact, so many
Speaker 1: search results are stacked of ads that one healthcare investor
Speaker 1: says his firm advises portfolio companies not to bother tweaking
Speaker 1: websites to hire in Google search listings. Only paid results matter.
Speaker 1: This is propelled an entirely new kind of competitor that
Speaker 1: is more or less the inverse of someone like Ross,
Speaker 1: marketers that have a sideline in therapy, such as Better
Speaker 1: Help and talk Space. When Ross loses Google auctions, it's
Speaker 1: mostly to these therapy consolidators. They have hundreds of millions
Speaker 1: in venture capital and corporate backing and use an uber
Speaker 1: like contract labor model, acquiring customers and sending them to
Speaker 1: a sprawling nationwide network of counselors and coaches. Ross holds
Speaker 1: a doctorate in clinical psychology, which required six years of
Speaker 1: graduate school. She usually charges two hundred and fifty dollars
Speaker 1: an hour. Better Helps therapists tend to be licensed counselors,
Speaker 1: clinical social workers, or psychologists with a master's degree and
Speaker 1: at least three years experience. The company charges from thirty
Speaker 1: five dollars to fifty secession. Full time therapists earn from
Speaker 1: fifteen to thirty dollars an hour. I could probably make
Speaker 1: more money working at the grocery store. Ross says they
Speaker 1: pay terribly. It's abysmal. Alan Mattis, president of better Help,
Speaker 1: says retention is high among his company's eleven thousand therapists.
Speaker 1: Some therapists with thriving private practices and affluent areas can
Speaker 1: earn more than they could online, he says, but there
Speaker 1: are providers on the platform who makes six figures annually,
Speaker 1: definitely not abysmal. Google is in a way a co
Speaker 1: conspirator in turning the business of mental health into a
Speaker 1: marketing game. Better Helps app has been downloaded six hundred
Speaker 1: thousand times so far, in increase from the same period
Speaker 1: a year ago, according to research firm Censor Tower. During
Speaker 1: the first couple of months of the pandemic, new customers
Speaker 1: complaining of stress and anxiety doubled from the year before.
Speaker 1: Mattis says the app saw a similar influx of independent
Speaker 1: therapists joining its platform, many of whom had no choice
Speaker 1: but to try online care while the pandemic shuttered physical businesses.
Speaker 1: The Google spokesman says a range of companies and nonprofits
Speaker 1: have bought search ads related to mental health. He notes
Speaker 1: that the company doesn't set ad prizes and that its
Speaker 1: auctions operate fairly for all advertisers. Better Help and others
Speaker 1: like it have another advantage. They don't have qualms about
Speaker 1: asking customers for testimonials to display on their websites, or
Speaker 1: paying social media influencers to tout their networks. That helps
Speaker 1: them boost their rankings on Google, which favors businesses with reviews.
Speaker 1: Many licensed therapists consider that kind of marketing and ethical violation.
Speaker 1: One could argue that the rise of these virtual therapy
Speaker 1: providers is a positive development, making therapy affordable and available
Speaker 1: at a time when everyone seems to need it, but
Speaker 1: that would cast better help whose parent company brought in
Speaker 1: more than five and fifty million dollars in sales last
Speaker 1: year in the role of the scrappy challenger and raw
Speaker 1: a sole proprietor as the incumbent. David Cecilene, the Democratic
Speaker 1: representative from Rhode Island who led the anti trust hearings,
Speaker 1: challenged pia's contention that Google helps small businesses. Google just
Speaker 1: shows what's most profitable for Google, Cecilene said, Gary Reback,
Speaker 1: an attorney with car and Ferrell who worked on the
Speaker 1: Microsoft anti trust case, watched that and saw a clear
Speaker 1: signal that the Justice Department should be more confident to
Speaker 1: pursue a case against Google. There are so many issues,
Speaker 1: and it looks like Google is on the bad side
Speaker 1: of all of them, he says. By summer, Ross's practice
Speaker 1: was picking up again. A couple of patients who had
Speaker 1: left town continue seeing her via video. New patients are
Speaker 1: coming in stressed by the unrelenting pandemic, dissatisfied with whatever
Speaker 1: they've been trying as relief. She's even reopened her office
Speaker 1: for those who truly need in person care. To prepare,
Speaker 1: Ross spent hours searching for klorox wipes before finding a
Speaker 1: reliable supply at her local liquor store. She's also improved
Speaker 1: her video backdrop, adding new wallpaper, a potted plant, and
Speaker 1: a smart looking wooden desk and bookshelf. Since more people
Speaker 1: seem to be seeking care, she's back to paying Google
Speaker 1: about twenty dollars a day. She says she's feeling better
Speaker 1: about her business. She's also telling her patients that she's
Speaker 1: preparing herself for two more years of pandemic dislocation. Google
Speaker 1: could be in for even more political hurt. It may
Speaker 1: have to pay record fines and make deep changes to
Speaker 1: its ad business. Politicians from both parties open to probe
Speaker 1: into a data sharing arrangement Feinberg's health division set up
Speaker 1: with hospitals. Google has waited more than nine months to
Speaker 1: close its two point one billion dollar acquisition of Fitbit,
Speaker 1: which makes fitness trackers. Regulators, politicians, and critics have denounced
Speaker 1: the deal, worried about handing over a company that tracks
Speaker 1: our bodies to one that knows so much about our minds.
Speaker 1: To win approval, Google has promised that it won't use
Speaker 1: any data from Fitbit's devices for its primary business of
Speaker 1: selling ads. Thanks so much for listening to this week's
Speaker 1: cover story. Check out this week's magazine for many other stories.
Speaker 1: That magazine on newstands right now, also online at Bloomberg
Speaker 1: dot com, and of course, on the Bloomberg terminal. I'm
Speaker 1: Carol Masser and I'm Jason Kelly. Check us out every day.
Speaker 1: It's our daily Bloomberg Business Week radio show, also carried
Speaker 1: live on YouTube. This is Bloomberg