Howard Stern Sues Google; Discovers How Pay Per Click Makes Daily Budgets Fuzzy

from the now-this-should-be-fun dept

What is it with talk show hosts and Google? Following overhyped reports about David Letterman making a stupid joke about Google (which probably was more for the slight humor value than any actual dig at Google), Threadwatch has pointed out that Howard Stern has sued Google over misrepresentations concerning the “daily” AdWords budget. The complaint is a common one for AdWords users, but might not really be such a big deal. The problem is that, since Google charges advertisers per click rather than for placement, it’s nearly impossible to guarantee that a daily budget will stay under the number. That’s because Google keeps showing the ads not knowing if anyone’s going to click. So, for example, if the daily budget is $10, and each click costs a dollar, when it gets up to $9 Google will keep showing the ad, but what if four people all see it and click on the ad? Then you’ve gone over budget. Google promises to try to even these discrepancies out over the course of a month, and many advertisers seem to believe it does a pretty good job of it. However, the wording of the “daily budget” might not be clear enough, so perhaps Google should better explain it for those who don’t like to read the fine print. In this case, however, it appears the specific complaint was that Google promises that you will never pay more than 120% of the daily budget — but did actually charge advertisers up to 162%. If that’s the case, then, Google did screw up and go beyond their own stated terms. Either way, knowing Howard Stern, expect plenty of Google-bashing to go on the air. Guess we won’t be hearing any Google representatives on Stern’s show for at least a year. Update: People are now saying that this is a different Howard Stern, which would probably make more sense. The original sources the story was pulled from certainly implied it was the famous Howard Stern.

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Comments on “Howard Stern Sues Google; Discovers How Pay Per Click Makes Daily Budgets Fuzzy”

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Jim says:

Staying under budget?

The problem is that, since Google charges advertisers per click rather than for placement, it’s nearly impossible to guarantee that a daily budget will stay under the number.

What? I haven’t advertised on Google for quite a while, but I distinctly remember being able to set an upper limit on how much I wanted to spend per day.

Mike (profile) says:

Re: Staying under budget?

You can set an upper limit, but Google will occassionally go over it. It’s nearly impossible to prevent that as described above. Because Google is going to keep *showing* ads until it hits your budget, but there’s a time lapse between *showing* and *clicking* the ads, it’s possible that multiple clicks that were shown before the cap was hit will push the daily spend over the budget. In response, Google will temporarily lower the budget over the next few days to even it out on a monthly basis…

sun818 (user link) says:

Re: Google is saying their technology sucks.

Once the click is made, you don’t show the ads any more. Google is implying their technology sucks so they have to keep showing the ads even though they can stop it. If they really wanted to make the process real-time they could. I suspect they want to make more money than keep accounts under budget.

Mike (profile) says:

Re: Re: Google is saying their technology sucks.

No, you’re missing the point. They do stop showing ads. The problem is that the ads *show* before someone clicks. In other words, you have millions of people doing searches all the time, and more than one will see the same ads at the same time. That is where the problem is made.

So, say 10 people all see the same ad at the same time, but one more click hits the daily budget. If any of those other 9 people click at the same time, you go over the budget.

It has nothing to do with Google’s technology. It has everything to do with the difference in time between presenting an ad and when it’s clicked on.

mhh5 says:

Re: Re: Re: Google is saying their technology sucks.

Um… I just noticed this post… uh… I think Google currently REFUNDS advertisers at the end of the month if Google ads go over budgets… So actually, Google tries to maintain advertisers’ budgets, but it’s unclear exactly how Google counts clicks per day, or if they shuffle click fraud around.

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