Serfing on the Giants’ Farms

Josh Marshall has a great post describing in detail the control Google wields over the advertising industry, “A Serf on Google’s Farm”:

But here’s where the rubber really meets the road. The publishers use DoubleClick. The big advertisers use DoubleClick. The big global advertising holding companies use Doubleclick. Everybody at every point in the industry is wired into DoubleClick. Here’s how they all play together. The adserving (Doubleclick) is like the road. (Adexchange) is the biggest car on the road. But only AdExchange gets full visibility into what’s available. (There’s lot of details here and argument about just what Google does and doesn’t know. But trust me on this. They keep the key information to themselves. This isn’t a suspicion. It’s the model.) So Google owns the road and gets first look at what’s on the road. So not only does Google own the road and makes the rules for the road, it has special privileges on the road. One of the ways it has special privileges is that it has all the data it gets from search, Google Analytics and Gmail. It also gets to make the first bid on every bit of inventory. Of course that’s critical. First dibs with more information than anyone else has access to. (Some exceptions to this. But that’s the big picture.) It’s good to be the king. It’s good to be a Google.

Google’s monopoly control is almost comically great. It’s a monopoly at every conceivable turn and consistently uses that market power to deepen its hold and increase its profits. Just the interplay between DoubleClick and Adexchange is textbook anti-competitive practices.

It’s a long post but really interesting. I’ve almost certainly left a lot of money on the table over the last decade by eschewing the mainstream web advertising industry, but I don’t regret it. I also know that DF’s independent advertising streams wouldn’t scale to work for larger sites with dozens (or hundreds) of writers, editors, and designers.

I told the story a few months ago that I got dumped from Amazon’s affiliate program because of a single article from over a decade ago where I encouraged DF readers to bookmark my Amazon affiliate URL. I actually think that was allowed back when I wrote it, but apparently now it’s against Amazon’s terms. That’s fine. But the way they dumped me was a bit unsettling:

  • There was no warning. The first and only email I received about this was informing me that my account was already terminated.

  • Their only explanation was that “You are not in compliance because you are encouraging customers to bookmark your Amazon links, as opposed to clicking through your website to reach Amazon.” They did not include a link to the article or articles where I violated this rule. I strongly suspect it was this article from 2004.

  • The email came from an anonymous (and perhaps automated?) “Amazon Associates” email address. There was no indication that there was any way to appeal this decision and reinstate my account.

Here’s the full text of the email. The only thing I redacted is my personal email address. (You’ve got to love the “Warmest Regards” sign-off. I showed this to Jason Kottke last year, and he quipped “I guess that’s how you say ‘Fuck you’ in Seattle?”)

I would categorize my reaction to this email as “mildly annoyed”, but that’s because I had greatly decreased my use of Amazon Affiliate links over the last few years. In the early years of Daring Fireball, Amazon Affiliate revenue was a significant percentage of my overall income. It was never the biggest source, or even close to it, but it was significant.

If that were still the case, I would have found this email more than mildly annoying. There are a lot of sites that rely on Amazon Affiliate revenue. And when it works, it really is a great system: Amazon sells more stuff, readers who follow the links pay the same regular prices as they would if they hadn’t used the affiliate link, and publishers get a nice little cut of the transaction. But in no way is it a relationship between peers. Amazon holds all the power, and as evidenced above, they can just pull the plug at any moment, with no warning and no recourse.

They’re not evil. They just don’t care.

Article Link: Daring Fireball: Serfing on the Giants’ Farms