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Can Google Be Trusted?

11/27/2020

by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Ask people their biggest brand loyalties and they’ll mention names like Apple, Coca-Cola, and Nike. Flying under the radar, however, is a firm whose product most people use far more often. It’s second nature to ‘Google’ any online search, but does a company the U.S. Department of Justice (DOJ) accuses of anticompetitive practices deserve so much of our trust?

The DOJ recently levied an antitrust lawsuit against Google, “alleging that the online giant engaged in anticompetitive conduct to preserve monopolies in search and search advertising.” Although the lawsuit implies a lack of trust, “The trust in antitrust [actually] refers to a group of businesses that team up or form a monopoly in order to dictate pricing in a particular market.”

Given that Google doesn’t charge people to use its search engine—it’s free for all—it doesn’t make much sense to say that the company colludes with competitors to fix prices.

On the other hand, Google’s inordinately large share of the market for online search, does resemble a monopoly. According to 2017 Net Market Share statistics, Google accounted for 79% of the global search engine market versus just 7.3%, 7%, and 4.9%, respectively, for Bing, Baidu, and Yahoo.

Contrary to what one might think, a monopoly is not necessarily illegal. According to the Sherman Act, it’s fine for a company to hold such a position of prominence, provided that the firm’s “vigorous competition and lower prices [took] sales from its less efficient competitors.” It’s kind of like saying, ‘It’s no crime to be rich, if you made your money honestly.’

Google’s rise to the top appeared to be upright. In 1995, with the Internet in its infancy, Larry Page and Sergey Brin conceived the search engine from their Stanford University dorm rooms. Then, as companies and consumers increasingly spent time online, the firm kept improving its product and riding the wave of web success. Google now has annual revenues of $166 billion and a market cap of $1.20 trillion.

So, if Google’s free product precludes price-fixing and its rise was above reproach, how has the search engine giant run afoul of the law? It has to do with what the company has purportedly done to maintain its preeminent position.

According to the DOJ’s antitrust lawsuit, Google is guilty of acting anticompetitively in search and search advertising in order to “preserve” its monopolies in those arenas. In other words, it’s not what the company did to get to the top, it’s what the firm does to stay there.

It’s important here to reiterate that so far Google has not been found guilty of wrongdoing, it’s only been charged. That said, why would a company that achieved such success honestly, need to resort to maleficence to maintain its status?

As hard as it is to come by success, staying successful can be even harder, for reasons like these:

Success breeds competitors. When people see someone being successful at something, a natural tendency is to think, “I can do that.”
Everyone guns for the leader. In sports, subpar teams often play great games when they have an opportunity to beat the defending champion.
Bigger businesses have more to manage. Even a small company is not easy to run. As an organization grows, so do the number and size of its challenges
Good ideas are hard to find. It’s difficult to maintain a continual flow of winning ideas.
Success is addicting. Once you get a taste of success, it’s hard to give it up.

Of course, none of these reasons would absolve Google of anticompetitive practices. If it’s doing what the DOJ alleges, Google is not only breaking the law, it also may be hurting consumers like you and me in more than one way:

Costing us money: According to the DOJ, enforcement of antitrust laws like the Sherman Act, the Clayton Act, and the Federal Trade Commission (FTC) Act “saves consumers millions and even billions of dollars a year.” It’s basic economics: Greater supply means lower prices.

Reducing quality: The FTC also maintains that monopolies impinge on product quality. When customers have no other options, there are fewer incentives for monopolizing organizations to make sure their offerings are great.

In the abstract, these two reasons definitely resonate. The issue, though, is that my positive experience with Google makes it hard for me to pin either of the problems on the company.

Just in writing this piece, I used Google at least a dozen times to search the Web for articles and statistics that I’ve hyperlinked throughout the article. Those searches are in addition to a dozen more Google searches I do each day for work and personal needs. All these searches cost me nothing and I am almost always very happy with the results. So, why isn’t a bigger, more powerful Google better?

Perhaps the biggest downside of monopolies is that they can impede innovation. Companies with monopoly power can lose incentive to innovate, while standing in the way of other firms that would like to offer us cutting-edge products and breakthrough services.

In a monopoly-managed industry, what’s available may seem good because we’re unaware of what could be, i.e., we don’t know what we’re missing.

What if Microsoft had short-circuited the rise of Apple or if big automakers had put the brakes on Tesla? The world wouldn’t be enjoying the innovative products that these firms and other one-time startups have brought to market. I wouldn’t be typing on my MacBook right now.

Competition is good for consumers. It’s also good for the firms competing, as it encourages them to work more efficiently and effectively, which brings out their best: “Iron sharpens iron, so one person sharpens another” (Proverbs 27:17). Every individual and organization should want to do/be their best and, therefore, should welcome competition.

It will be up to the U.S. District Court for the District of Columbia to determine whether Google has been “unlawfully maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets.” However, if the Court does uphold the charges, the company also could be cited for “Single-Minded Marketing.”

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Marketing Unity

11/14/2020

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

In his first speech after news media declared him the election winner, Joe Biden urged Americans to “come together as a nation,” “unite,” and “heal.” Those are commendable words with admirable intent, but given the deep divisions besetting the country, is it realistic to believe that any individual or organizational rhetoric can restore national harmony?

Among those with a keen interest in the current social climate are marketers. At a minimum, they want to demonstrate that their organizations are in step with public sentiment. Even better, they’d like to suggest they’re leading the charge for positive societal change.

Over recent years, we’ve witnessed dozens of companies advertise their support for causes that have included immigration reform, gender equality, and racial justice. Even with a change in the Oval Office, the social unrest that fueled these and other movements is likely to continue, in part because America is so ideologically divided.

Despite the state of the nation, only half of marketers have specific plans that account for such social unrest. Furthermore, those with strategies may be working from flawed assumptions, at least if they’re following examples like that of Gap.

The clothing company recently tweeted its wide-eyed desire for red and blue voters to “come together.” It quickly deleted the tweet, however, after considerable backlash accused the firm of “tone-deafness and words that were not backed up by action.”

As Pepsi’s failed ‘protest’ commercial featuring Kendall Jenner showed, consumers don’t like when companies just pay lip service to social concerns. People want firms to act on their supposed convictions and walk the walk, not just talk the talk.

The question, then, is: How marketers, whether they’re individuals or organizations, move beyond words to unifying actions? Here are six suggestions:

1. Separate individuals from issues: Some people have a hard time putting a partition between the things others say and those who say them. As a result, disagreements over issues often descend into personal attacks that undermine unity, e.g., “Well, if you believe that, you’re an idiot.”

If it’s hard to coexist on social media with someone whose opinions are very different than your own, imagine being married to that person. That’s exactly the union that liberal-leaning James Carville and conservatively-inclined Mary Matalin represent. Despite very strong ideological differences, the famous pair of political consultants have a long and happy marriage because they love and respect the other person. Issues are not the individual.

2. Genuinely listen: Anyone who argues that listening isn’t a real action probably hasn’t done much serious listening. It takes patience and focus to listen well, and even greater skill to effectively communicate to others that you’ve heard and understood them.

To its credit, Pepsi recognized its error with the Jenner ad and has made “social listening” a top priority. According to vice president of marketing Todd Kaplan, the company now actively identifies and seeks to understand specific “cultural truths,” which determine the brand, not vice versa. The company has made careful listening a prerequisite for action.

3. Find common ground: When confronted with controversy, too often people run to their ideological corners, from which they launch long-range attacks on their adversaries—an approach that is alienating, to say the least. On the other hand, when people first identify points of agreement, communication tends to unfold much more favorably for all.

In sales, one of the most difficult things is to ‘cold call’ prospective clients—"I don’t know you, you don’t know me, but here I am.” However, it’s amazing how quickly the temperature of such interactions warms when the salesperson and prospect come across someone/something they have in common, e.g., a shared acquaintance, the place they grew up, a favorite sports team, etc. Shared affinities and experiences, as well as beliefs, lay a foundation for mutual respect.

4. Show humility: There’s little more socially off-putting than unabashed arrogance—individuals who are very ‘full of themselves,' often insisting they’re right, and suggesting they can do no wrong. Such an “I’m above you” attitude implies an uncomfortable hierarchy that undercuts unity.

In contrast, there are others who are brilliant, talented, experts in their fields, yet readily admit that they don’t have all the answers and acknowledge that they sometimes make mistakes. Despite the greater gulf that probably exists between us and them, it’s this latter group that makes us feel more valued and welcomed.

5. Practice hospitality: We forget the vast majority of things that people say to us, but we tend to remember for a long time even the small acts of kindness that people do for us. It’s been more than 20 years, but I still remember when, shortly after the birth of our son, my department chair stopped by our home to visit and drop off a meal that his wife had made for us.

I’ve also been a grateful recipient of notes of encouragement, such as one I received recently from a student who wanted to express thanks for the special efforts faculty members have made to teach during the pandemic. Great or small, such hospitable acts bring people together, physically, figuratively, or both.

6. Laugh: If you notice a couple that never laughs, it’s likely a relationship on the rocks. People who are on good terms, tend to joke with each other. In fact, even more than a sign of healthy relationships, laughing together helps build social bonds.

Two colleagues and I recently conducted a study that looked at “playful teasing” in television commercials. Among other results, we found high means for ‘liking’ and ‘recall’ of ads that contained friendly joking, even when the ribbing crossed racial lines.

Saying the right words and avoiding the wrong ones is important for many persuasive purposes; however, if words were what motivated most, there wouldn’t be so many sayings like these:

Marketing is about bringing people with related needs together for mutually beneficial exchange. Whether those exchanges happen for economic reasons or other reasons, each exchange encourages participants to bond, but only if the marketer models unity.

More specifically, marketing communication must rest on a foundation of supportive action, such as the six suggestions listed above. Unfortunately, this article is just words, but hopefully it serves as a reminder that behaviors that build unity are among the best examples of “Mindful Marketing.”

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix.
Check out Mindful Marketing Ads and Vote your Mind!

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Can Google Be Trusted?

Marketing Unity

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