Thursday, August 25, 2005

Stupid Suit - AdWords Daily Budgets

Earlier this month, Tony commented briefly on a news tidbit that there is a class action suit against Google for overcharging the daily budgets. (Original article here.)

Now, I know this is a shock – but I’m gonna come to Google’s defense on this one.

Yes, at first, for a few minutes, I found it a little confusing. But it took about five minutes to understand that the daily budget is an average. That during the course of a month, there will be some days a little over and some a little under. That if there is significant overspending, Google will refund the charges – which means the client has gotten free clicks, since it’s not like they can take back the traffic.

The suit alleges that there are instances when campaigns have spent as much as 160% of the daily budget and not gotten a refund. I’d venture to guess that these same people had days that ran underbudget – and they are expecting a refund for each day they go over, when that’s just not how it works.

Google does a much better job of keeping the daily spend close to the daily budget than Yahoo. You can set an average daily budget on Yahoo and still get days when it spends 3x that amount, and as a result shuts the campaign off completely on other days. Though really, that just seems like poor management to me. It would be in the search engine’s interest to keep those ads running a bit every day, at the very least because this would make the clients happier and more secure.

I’d guess that there may be technical limitations to how accurately the engines can keep a campaign under a specific budget… how fast is the data processed, the costs updated, and then the campaign shut off? In the time it takes for that to happen, how many more clicks will be incurred?

It’s not like Google make a secret of how the budget works. If I advertise with a newspaper and don’t understand their written policies – can I sue them? Seriously – do people get to win a lawsuit just because they’re dumb? Oh, wait… (remembers McDonald’s hot coffee warning) sometimes they do.


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