I read through this with some interest and have a naive question that you might advise me to discuss in person: all of the discussion on advertisers' reactions to our pricing changes seem to presume that this is a 2-person game between the advertiser and Google and — at some point on the pricing curve — advertisers could abandon us even if it behooved them to stick with us. But isn't it really 3 players — the advertisers, us, and our competitors? The discussion seems insensitive to where else the advertiser could obtain traffic of similar quality and price. Why is it ok to ignore this — isn't the real point where an advertiser switches us out determined by the surrounding market?

The underlying document frames the concern clearly: pricing on google.com happens today in small touches throughout the year, through what it terms 'incidental' pricing (quality and format improvements with CPC or CPA components) and 'intentional' pricing (auction mechanism tunings via format pricing, squashing, or reserves). The result is pricing happening in a 'semi-controlled, semi-organic way that might not be ideal.' Leadership expressed discomfort with intentional pricing launches, worried that cumulative changes could leave advertisers unhappy and cause them to reallocate budgets to other channels on timeframes Google cannot track. Two risk types are identified: advertisers lowering bids to restore ROI (manageable), and advertisers shifting spend away from Google permanently due to degraded sentiment — characterized as the more problematic outcome.