Google has been “the world is a scam” with its massive ad spend, according to a former Google executive.
“It’s just not working,” said AdWords senior vice president and general manager Kevin Kranish.
“There are no signs of it working, and it’s killing us.”
Google spent more than $8bn on AdWords in 2016, according a report from analytics firm Gartner, and more than 60% of the money went to the top 1,000 advertisers.
The company has been criticised for its marketing practices, including targeting its AdWords users to advertisers in countries where the US is not allowed to advertise, limiting the range of content they can see and denying them access to targeted advertising.
AdWords was acquired by Google in 2014 for a reported $3.9bn.
“This is a problem that we’ve seen with the past few years, and we’re going to have to make changes, because there’s no way around it,” Kranish said in an interview with Recode.
“The way we’ve built our platform over the last five years, I think it’s one of the best in the world, and when you look at it as a platform, it’s probably one of, if not the best platforms.”
Google declined to comment on Kranishes claims.
Kranisha, who was promoted to general manager in 2016 and is currently based in Silicon Valley, told Recode he was concerned about the impact AdWords would have on the future of the platform.
“When we started out, I don’t think AdWords really was going to work as well as it does today,” he said.
“Now, I can’t imagine it ever working like it does now.”
“We’re going through a big change in the way we think about our users, and I think that’s why it’s such a big issue,” he added.
“We have an entire generation of people who grew up on YouTube, who have never had access to the AdWords platform, and they are the ones who will be impacted the most by the changes.”
Kranises fears over Google’s advertising strategy have been amplified by Google’s new ad platform, AdSense, which offers publishers a more targeted way to reach its users.
Krantish said AdSense was a major challenge to Google’s ability to grow the AdSense platform.
Google launched AdSense in September last year, and Kranhass claims the launch “was really, really bad for AdWords”.
The company’s AdSense team said it had spent $3bn on new advertising, and that its advertising spend “has grown by almost 70% year on year”.
“The ad spend growth over the past year has been unprecedented,” it said in a statement.
“AdSense has been the largest contributor to AdWords growth for the past three years, outpacing our competitors.
AdSense has made AdWords a $100bn platform.”
Kranishes fears are also being voiced by the likes of Netflix, who are also exploring how to scale up their advertising.
Kramlich, the Netflix VP of product, told the Financial Times: “It was a bad idea, and a terrible thing to do, and Google has had a lot of problems with its marketing and AdWords and with our advertising platform, but the big question is whether it will ever work again.”
The Financial Times reported last week that Google’s revenue had dropped by 25% in the first quarter of this year.
Krenish, who took over as general manager from John Collins in October 2016, said he did not believe AdWords will “ever work as good” as it used to.
“We’ve seen some incredible changes over the years with AdWords, and with this year’s new technology, we can’t begrudge the companies that have gone through these changes the ability to do it better,” he told Recomb.
“But I don�t think it will work the way it was meant to.”
“I think that we’re in a bubble,” Kramitchas boss added.