Advertisers also recognize each ad type as a distinct product. Non-retail advertisers emphasized that they simply cannot use PLAs, and thus they view text advertising as its own channel. FOF ¶¶ 179–180.
Retail advertisers who purchase PLAs view them as a complementary product. Text ads can be used in conjunction with PLAs to “own the SERP,” that is, take up as much real estate on the search results page as possible. FOF ¶¶ 189–190. For instance, Amazon’s Director of Software Development, Mike James, testified that, from the advertiser’s perspective, “there are . . . distinct advantages in one ad format over another,” and “there are edges where those ad units have their own specific incremental benefits.” James Dep. Tr. at 234:23-24, 235:3-4. Amazon uses a particular bidding strategy for branded keywords on text ads, which cannot be achieved through PLAs alone. See id. at 95:3-8. To be sure, text ads and PLAs arguably serve a similar function from a user’s perspective, id. at 142:4-5, 234:9-19 (stating that “there is an intersection of the purposes that they serve,” which is that they “can fulfill the same customer’s need”), but marketers view them as distinct products.
Google counters that “what matters for market definition is that many advertisers can and do buy other search ads as substitutes.” GRFOF ¶ 19f. At trial, Google employees highlighted that certain advertisers shift spend between text ads and PLAs. FOF ¶ 234. This, Google contends, is evidence that these ad types are substitutes. But, as discussed, only retail advertisers can shift spend between text ads and PLAs—only a small minority of all Google advertisers (7.5%) purchase both ad types. And for reasons already discussed, the reallocation of some spending between text ads and PLAs does not on its own reflect significant substitution: Advertisers may reallocate dollars among ad channels for a variety of campaign- or product-specific reasons.
187
