AdSense payout's achilles heel

it's an adwords defect

[incrediBILL]

I was just reading an AdWords topic about someone that had an unpaid bill and didn't sound like it was going to get paid anytime soon either. Suddenly the big flaw in the whole AdWord/AdSense payout scheme came to me like a lightning bolt.

The ads are run BEFORE the ads are actually paid, meaning if Google doesn't get paid because of a bunch of deadbeats they could either:

a) deduct the unpaid ads from the affected AdSense publisher (lots of unhappy screaming)

b) adjust the payout rate the following month to make up the difference

c) absorb the loss being the wonderful publicly held philanthropists we know them to be

I'll hazard a guess that it's "B" the payout rate gets adjusted so our old buddies @ Google always make the same percentage month after month but average out any unpaid losses over the entire AdSense network.

Just a theory, but I think the flawed AdWords payment methods have something to do with not disclosing the exact AdSense payout percentage.

[JamesR3]

It's not flawed -- it's industry standard for advertising. If Google demanded payment up fron instead of net 30, it would annoy a lot of big advertisers.

[incrediBILL]

Yes, I'm familiar with BIG advertisers, have run ads for them on my site.

But we aren't talking about a lot of big advertisers here. There are lot's of little guys advertising to make a buck using credit cards on the border of decline.

I'm wondering what happens when Google gets bad accounts, who eats it?

My gut tells me the publishers pay for the sins of the advertisers.

[no9t9]

correct me if I'm wrong, but don't most adwords advertisers use credit cards as a form of payment? If it is a credit card, Google gets their money from the credit card companies. It's the job of the credit card company to collect from the advertiser.

Now, if the advertiser declares bankruptcy... that is a different story. In that case, Google would move that cost into an expense account for bad debts. This is standard practice for all public companies.

I am not so sure that they would play with the payouts for publishers to get back that money.

[incrediBILL]

You can't collect for a credit card that is over the limit, past due, etc.

Let's not even get into possible chargebacks.

Those are declined.

I guess I'm wondering if there is enough room for problems that it impacts the system?

Maybe not, just speculating.

[roycerus]

Google pays adsense publishers 30 days after the end of month. This creates enough money in interest which gives them a cushion. And adwords has limits you can spend when you first sign up. When you first sign up your credit limit is only $50 I think [not sure] and it grows on each payment being made. Moreover.. you have to pay a signup fee to open an account, so they know your address your contact numbers, so google can go after you anytime they want to. So I really don't think this is a big issue.

Regards,
R

[incrediBILL]

Yup, you're probably right.

Been fighting viral bronchitis all week and I'm not thinking things through like I usually do.

Oh well, chalk it up to fever brain.