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Share Tactics
Another secret Google revenue-sharing deal was revealed during antitrust testimony.
Google head of global partnerships Don Harrison disclosed during the Epic Games vs. Google trial that the standard 15% fee doesn’t apply to Spotify.
Spotify only pays Google 4% of subscription fees via Google’s payment processor, The Verge reports. Meanwhile, Spotify pays Google nothing when it processes the subscription in its own system. Typically, apps get a 4% discount when using their own payment processor, while Google collects 11%.
Google fought to prevent exposure of Spotify’s sweetheart deal, arguing it could hurt negotiations with other app developers. Google says it has similar deals with other apps, but declined to name any.
Also revealed during the trial: Google offered Netflix a discounted take rate of 10%, but Netflix disabled in-app payments on Android to avoid paying Google anything.
Google says Spotify’s “unprecedented” popularity means it needs the app in its store. Otherwise, some people wouldn’t buy Android phones.
And Spotify isn’t above playing hardball. In July, it simply dropped support for Apple’s billing system rather than pay its 30% take rate.
Why Did You Block Me?
Speaking of Google, YouTube is trying even harder to stop people from using ad blockers, despite EU privacy watchdogs’ concerns about its method of detecting them.
When YouTube users reported five-second delays loading videos on Firefox and Microsoft Edge browsers, Google told 404 Media the loading delays are part of its plan to make people using ad blockers “experience suboptimal viewing, regardless of the browser they are using.”
The point, of course, is to pressure more YouTube users into giving up their ad blockers and boost its average revenue per user.
Why would Google admit to the ad blocker crackdown? Because user reports led to Firefox accusing Google of implementing loading delays only on non-Chrome browsers as an anticompetition tactic.
That accusation certainly isn’t a good look amid Google’s ongoing antitrust trials.
Google says it’s cracking down on ad blockers to support creators (from which it takes a cut of revenue), and if users don’t want ads, they can pay up for an ad-free subscription. But since the techniques are creating uneven user experiences across browsers, users are suspicious.
Spend Money To Lose Money
Temu, a Chinese ecommerce marketplace, which launched in 2022, is featuring its first full year of Temu Christmas.
For general consumers, a Temu Christmas could be shorthand for sending everything back. For ecommerce advertisers, though, Temu is a legitimate structural impediment.
Temu throws crazy money at online shopper search ads. According to research by Smarter Ecommerce, a European ecommerce marketing consultancy, Temu went from competing for 10% of Google search and shopper marketing auctions in May to 75%. Amazon, by comparison, dipped from about 85% to 80% of shopping ad bids.
“That should stun you,” Smarter Ecommerce’s Mike Ryan tweets about how Temu almost caught Amazon in less than a year. EBay, the former top auction challenger to Amazon, saw its search shopping auction rate drop from 50% to 45%.
Temu’s twin obsessions with low prices and high search ad budgets leads it to some strange places. For one thing, people search “Temu” alongside words like “scam” so often that Temu ads in the wild can include copy and search tags like “scam” and “insanely low price.”
But Wait, There’s More!
How much X is losing to advertiser boycotts. [Ad Age]
X CEO Linda Yaccarino says the best outcome of X’s lawsuit against Media Matters would be proving the outlet “manipulates advertisers.” [Fortune]
OpenAI and Microsoft are being sued for copyright infringement in class action brought by nonfiction authors. [Semafor]
Hollywood is back in business – but the ripple effects of the twin strikes on streaming are only just starting to shake out. [Variety]
You’re Hired!
GroupM-owned Wavemaker hires Dentsu exec Chris Worsley as global performance lead. [MediaPost]
