Surprise: Advertisers Win Money From Google For Over-Budget Clicks

from the didn't-see-that-coming dept

Wed, Apr 1st 2009 3:48pm — Mike Masnick

Back in 2005, we wrote about how Google was sued because AdWords users were being charged more than their "daily budgets" for ads on the site. The case initially got plenty of attention after pretty much all of the mainstream press reported that the Howard Stern listed as a plaintiff was "the Howard Stern" of radio fame -- though, that was later disputed. Either way, the case itself (famous Howard Stern or not) was still interesting. Since advertisers pay based on clicks, and the price of the clicks isn't always known until the click happens, the "daily budget" that any advertiser sets for ads is impossible to match exactly. Thus, there will be days when the daily budget is exceeded -- but that wasn't acceptable to those suing, who found the whole thing misleading. After a court refused (twice) to give summary judgment to Google, it looks like the company has decided to throw $20 million at the problem to make it go away via settlement (a decently large chunk, of course, goes to the class action lawyers who brought the suit). This is a bit of a surprise, since you would think Google has a pretty clear case, as the terms of its agreement with advertisers was pretty clear on what was going on -- but perhaps Google thinks it's smarter to just pay up and keep advertisers happy.

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Filed Under: ads, budgets, clicks
Companies: google

5 Comments

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Adwords Advertiser, 1 Apr 2009 @ 4:17pm

I believe Google's policy is that they won't exceed the daily budget by more than 10%, and there's something about the total for the month (can't remember the details on that right now). That seems somewhat reasonable, and may not sound like much, but take a $500/day budget and that extra $50/day adds up pretty quick, especially when they occasionally even go over that 10%.
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- ChimpBush McHitlerBurton, 1 Apr 2009 @ 4:38pm
  
  Re:
  Yeah, and its soooooooo hard to just reduce your budget to like, oh.... $450?
  
  wimps
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Weird Harold, 1 Apr 2009 @ 4:54pm

I suspect that Google figured that $20 million is cheap compared to the fun that could come on discovery. It's a pretty cheap way to buy peace and keep the story out of the press.

With the ad market in flux right now, the last thing Google needs is another reason for advertisers not to trust them.
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Anonymous Coward, 1 Apr 2009 @ 7:39pm

You go to the gas station and tell them to put $10 in your tank and they put in $50 worth. Do you pay the extra $40 or would you expect them to take the gas back or write it off since it was their error?
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Lucretious, 2 Apr 2009 @ 5:03am

Tort reform please.....
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