How Feature Changes of a Dominant Ad Platform Shape Advertisers’ Human Agency

ABSTRACT

Businesses are increasingly delegating activities in the advertising process to dominant online advertising platforms. This delegation yields the ad platforms tremendous power, akin to the principal–agent dilemma discussed in economics. One of the major platforms is called Google Ads—this platform is the focal point of our study. Over the years, Google has made substantial changes to its platform’s features, which, in turn, govern what is possible and what is not for the advertisers. These changes impact the advertisers’ ability to act independently and make their own choices, referred to as human agency. To better understand this impact, we examined 362 industry news articles reporting changes in Google Ads from 2015 to 2020. The findings indicate that while most changes increase human agency, this effect is becoming weaker over time, driven by automation. To better understand advertisers’ attitudes towards automation, we surveyed 193 advertisers with Google Ads experience. Contrary to the popular belief that marketers are afraid of being replaced by algorithms, we found this to not be the case. Even though most advertisers indicated appreciation for maintaining their human agency, they did not perceive this agency being violated by the ad platform. However, we did observe interesting variability among respondents, reflected in three computational advertising attitude types: tinkerers, instrumentalists, and shepherds. We discuss the implications for advertisers in terms of strategizing in the face of reduced human agency and for ad platforms in terms of designing features that advertisers perceive as fair.

KEY WORDS AND PHRASES:

• Online advertising
• advertising automation
• digital marketing
• human agency
• Google ad platforms

Acknowledgments

Mekhail Mustak expresses gratitude to Kone Foundation (Finland) and Liikesivistysrahasto (The Foundation for Economic Education, Finland) for their financial support enabling this research.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ https://www.statista.com/statistics/242549/digital-ad-market-share-of-major-ad-selling-companies-in-the-us-by-revenue

² https://support.google.com/google-ads/announcements/9048695?hl=en

³ https://blog.google/products/ads-commerce

⁴ https://searchengineland.com

⁵ https://martech.org/author/marketing-land

⁶ https://www.dropbox.com/s/iufxv44pv5micto/supplementary%20material.xlsx?dl=0

⁷ https://support.google.com/google-ads/answer/9614122?hl=en-GB

⁸ https://privacy.google.com/businesses/compliance

⁹ “Google’s Auto Applied Recommendations Catch Advertisers, Agencies off Guard”—November 2020: https://searchengineland.com/googles-auto-applied-recommendations-catch-advertisers-agencies-off-guard-343867

¹⁰ https://searchengineland.com/googles-search-terms-move-will-make-millions-in-ad-spend-invisible-to-advertisers-340182 (June 2020).

¹¹ https://searchengineland.com/how-google-ads-impact-bids-pricing-adwords-auctions-269153 (February 2019).

¹² Google to Prohibit Demographic, Zip Code Targeting for Housing, Employment, Credit Ads”—June 2020: https://marketingland.com/google-to-prohibit-demographic-zip-code-targeting-for-housing-employment-credit-ads-279901

Additional information

Notes on contributors

Joni Salminen

Joni Salminen ([email protected]) holds a Ph.D. in marketing from Turku School of Economics, Finland, and is a program manager at University of Vaasa. His expertise lies in the area of digital marketing and using big data for marketing applications, such as automatic profiling of user segments and gauging brand using social media data.

Bernard J. Jansen

Bernard j. Jansen ([email protected]) is a principal scientist in the social computing group of the Qatar Computing Research Institute, and a professor at the College of Science and Engineering, Hamad bin Khalifa University. Dr. Jansen is the editor-in-chief of Information Processing & Management, and the former editor-in-chief of Internet Research. He is also an adjunct professor with the College of Information Sciences and Technology at Pennsylvania State University.

Mekhail Mustak

Mekhail Mustak ([email protected]; corresponding author) is an assistant professor (Marketing and Sales Management Department) at the IESEG School of Management, France. He is also an affiliated senior researcher at the Turku School of Economics, Finland, and a member of the Value Creation for Cyber-Physical Systems and Services (CPSS) research group, University of Jyväskylä, Finland. His research focuses on the application of artificial intelligence in marketing, B2B marketing, and services marketing. Before joining academia, he was a senior executive at A.P. Moller–Maersk, where he was involved in the international supply chain management for Nike, Puma, JCPenney, and Tesco Stores.