Google Admits To Overcharging For Adwords

How many billions do they owe their advertisers?

[superclown2]

During their recent trial Google employees admitted to 'adjusting' bids on Adwords, which resulted in them making a lot more money at the expense of their customers, who were over-paying for their clicks. The US Government sued them and rather than have it go to trial (which coincidentally could have meant a lot of publicity) They sent a cheque for three times the sum claimed, saying that that should be the end of the matter.

Now then: what about the millions of other customers whose bills they 'adjusted' in the same way? Will their cheques be in the post perhaps?

You can see a copy of the alleged cheque here: [thebignewsletter.com ]

[universenet]

They are trying to save the credit card fees.

@Shepherd
I did think same and now I see your post, this is unbeliveble,
I think reason can be that "little managers" in google try to proof to boss that they made
profit up few percent so that they can take bigger bonus,
and this is easy with no paying fee to credit card companies,
so effect will be fast without not do notihng, almost over nite

[Mark_A]

I wonder what the criteria are for changing payment details?
We pay with a credit card, I don't think we have been asked to change yet.

[superclown2]

It may be more to reduce the amount of chargebacks claiming unauthorised use of card or good not as described.

I don't know what it's like in the rest of the world but here in Europe it's perfectly easy to challenge and chargeback a bank payment even where no credit card is involved. In view of their deceptive practices (fully detailed in their trial transcripts) there could well be a huge number of ad buyers querying their bills so, yes, chargebacks could be a big problem for them right now.

However: Google seem to be trying to slash costs wherever they can. They have an obsession, driven by Wall Street, to increase profits every quarter so cutting CC charges is perhaps more palatable than sacking more key workers, or exporting more jobs to low wage countries.

[ember]

I am a small potato but I once had a customer initiate a chargeback for $8,000. Woke up one day and the money was just gone from my bank account. The customer lied through her teeth about not receiving what she'd ordered. I screamed and hollered at the bank that she was lying, but I lost. So if Google is playing footsies with pricing and stealing from now-aware advertisers, then they might be getting more chargebacks than usual and figured ending credit card payments is the best way to deal with it.

[Shepherd]

We went invoicing many years ago, voluntarily. We are also small potatoes and even so our "credit line" with google invoicing is several hundred thousand. Their exposure to us not paying is WAY more than if we were on credit card.

Also, google (and most very large businesses) are not living in the same world as most of the rest of us in regards to chargebacks.

I, personally, have only ever filed one chargeback in my life. It was legitimate, service not provided backed up by customer support documentation. My chargeback was unsuccessful because the big business I was up against was move valuable than me.
On the flip side, we stopped disputing chargeback through our merchant account and go directly after the customer because we virtually never win a chargeback dispute.

[superclown2]

So: Google employees allege in court that the company overcharged it's customers in order to meet profit targets.

The American government sues them and a cheque for about three times the alleged overpayment is handed over without any argument.

Google has about seven million customers, many of whom may well have been overcharged; perhaps in some cases by millions of dollars.

Why am I not reading about massive claims, worldwide, against Google? And have there really been no criminal lines crossed? Are people so frightened of this company that they meekly submit to whatever they do?

[Shepherd]

so frightened of this company that they meekly submit to whatever they do?

Yes.

Specifically, the fear (rational or not) of losing organic traffic if you complain about their ad shenanigans.

Also, the levels of shenanigans we are seeing now are new and have been progressing slowly for many years. I would say that we are getting close to a tipping point, organic traffic so low and ads thievery so high that we may see ever increasing and public responses to google's shenanigans. We are in the processes of finding out how far google is willing to go to collect on ad debt. We would love for google to try and collect in court, however, since they're writing sizable checks to avoid discussing their thievery in open court (jury), we're probably not going to get that lucky. Chances are they will probably just pawn if off on some unsuspecting third party debt collector.

[superclown2]

Over the last few days I have heard of others who have refused to pay substantial bills. It makes me wonder if there has indeed been a backlash after the admissions of overcharging, but we are just not hearing about it.

Perhaps those in the media who complained so bitterly about being excluded from much of the testimony have lost interest.

[superclown2]

And now google is removing the option to pay for ads with credit card,

Has Google fallen out with credit card companies, or have credit card companies fallen out with Google over the number, and size, of chargebacks?

Just a thought.

[Mark_A]

Not having access to Google's bidding system I don't know how I would calculate over charging?

[Shepherd]

google's bidding system

I would say that it hasn't been a "bidding system" for quite some time.

[BigKat]

Not having access to Google's bidding system I don't know how I would calculate over charging?

Just imagine how difficult it will be for the judge hearing the DOJ -vs- Google ads lawsuit. I think the judge is celebrating her 80th birthday today...

[ember]

What's wrong with being 80?

[BigKat]

What's wrong with being 80?

Nothing wrong with being 80, but if you watched the 78 year old -vs- 81 year old US Presidential debate last night you would understand why age limits are needed in Government. As it pertains to technology based lawsuits, having someone so old behind the bench does not serve society well. I believe both Canada and the UK have age limits of 75, leaving the US largely alone with life tenure Federal judges. Most states in the US have age limits for state judges, and it's about time the same be applied to the Federal level IMO.

[superclown2]

Perhaps by the time they reach 80 they are more impervious to 'lobbying', which seems to be a major factor in American politics nowadays.

[ember]

why age limits are needed in Government

That is up to the voters. If they think a politician is too old, they can vote him or her out.

leaving the US largely alone with life tenure Federal judges.

So we're alone. The point of life tenure is so that judges can take the long view, are not subject to political cycle whims and can focus on applying the law and not on campaigning for reelection.

[BigKat]

That is up to the voters. If they think a politician is too old, they can vote him or her out.

That's not how it works. Two political parties narrow it down to two candidates who voters can choose from. I personally think both a 78 and 81 year old are well past their prime to hold any public office. And because the threshold to compete in an election is so high, to keep outsiders like RFK JR out of debates and off ballots, we will either have a 78 or 81 year old as President unless someone one or both get replaced by their party.

There is a minimum age requirement to be President, and there should also be a maximum age requirement for public office as well. We all deteriorate with age and we've witnessed a number of "senior moments" with other political leaders as well (Feinstein, McConnell, etc.). The citizens deserve leaders who will be around long enough for their policies to impact those who create them and also long enough so any misdeeds politicians engage in while in office can be punished instead of being blamed on old age and dismissed.

[ember]

That's not how it works.

That is how it works. If people don't want either T or B, then they can vote for RFK or any other third-party candidate they want.

[engine]

Mod note: Let's not drift.

[Mark_A]

Back to overcharging on Adwords, how would anyone know?

One can only look at charging and decide to continue or to stop.

[engine]

Back to overcharging on Adwords, how would anyone know?

Perhaps a comparison with Bing's prices as a guide?

Either way, it's not sustainable: I had accounts decide that the CPC was too high and they decided to withdraw. In part it was the cost, but also that each click did not result in an order. That second part was an acceptance that there would be some that didn't buy, but, if it outweighed the sales opportunities to any extent it became unsustainable.

[Mark_A]

Hi engine.

In my experience we pay less to Bing per click than we pay Google. I have always avoided linking the two accounts in any way because I want them both to find their own level. Regarding ROI, I think that is everything, if Google is costing us a lot but the people that are clicking through go on to make enquiries that lead to business then it continues to make sense.

What becomes alarming is when the click throughs continue to come and the cost, but for some reason the conversions stop. At this moment, Google is continuing to send click throughs, but conversions have dried up. Hard to know the best response, alarm is one ..

[Shepherd]

One can only look at charging and decide to continue or to stop.

Correct. The term "overhanging" might not fully capture the issue, but it highlights that the price google charges per click is no longer driven by open market competition among advertisers. google has the power to charge advertisers whatever they want per click. This lack of transparency should be addressed, and google should be more open about their pricing mechanisms.

More importantly, google does not give any reasonable, straight forward way to control "spend". They offer misleading tools such as "budgets" and "target ROI/ROS," which are designed to make advertisers spend more than they intend.

If google still had a high-quality product, they wouldn't need to resort to these tactics. What they have is market dominance, and they are abusing that dominance in a deceitful manner to generate increased revenue.

[Kendo]

Back to overcharging on Adwords, how would anyone know?

Easily. By using your own stats and checking referrers. I have used AWstats for years. For WordPress sites there is plugin called WP Statistics that I recommend.

[Mark_A]

But Kendo stats for our own sites don't include who else was in the supposed bidding in that moment, what the Google minimum bid was, and what the competitors were prepared to bid.

[Shepherd]

Overcharging:

a. charging for clicks not received. Not really something google does. google does send some questionable clicks and there is no real way to dispute the quality of the clicks but that is another issue.

b. the way google has evolved from a market driven auction/bid price for ads to a price fixing scheme

[Kendo]

> stats for our own sites don't include who else was in the supposed bidding
Maybe not but if the number of referrers from Google don't match the number of clicks charged from their ads you have somewhere to start.

What they charge per click? Who knows? They have them selves covered. While recommending that an ad will not be shown because a bid is too low, they still charge for low bids. And they recommend high bids to get shown when no-one else is actually bidding on that keyword.

> charging for clicks not received

Strange that I never ever saw one of my own ads.

> the way google has evolved

I see no difference between now and when they started.

[Shepherd]

I see no difference between now and when they started.

OK.

_{FWIW, I've been using google's ad offerings since they stole it from Overture}

[Mark_A]

> Strange that I never ever saw one of my own ads.
Perhaps your set up was different to mine. I see our ads often when checking position etc.

[chewy]

Folks, remember "broad matching" and how that changed over the years?

Close watchers to their (increasingly useless) Search Query Report would notice how broad "broad matching" - and more modern versions of same - are.

This became exceptionally evident when I was working for an on-demand "print" service and Google seemed to think "print" had the same meaning as "paint" - so of course I became nearly obsessive compusive about using negatives, creating thousands of negatives, generating a zillion numbers as negatives, etc.

Cost isn't just what you pay - it is what they sell you for what you pay - and Google knows how to sell you traffic on keywords you DO NOT WANT. In fact, this is very much how some of their reps want you to play these days. It is deplorable.

Of course, with an increasing number of "not shown" queries in Google Advertising and Google Analytics(4) they can hoodwink you even more.

Plus - we all know that there is a much larger gap and delta these days between what is real traffic vs what GA reports - so - because of their "privacy" objectives, they can show even less of that information - so you don't even know what you are spending money on.

This also works with their geotargeting (which doesn't really seem like geotargeting, more like more obfuscation) and many of their other features.

Google also uses contracts that specify arbitration only and prohibits class-action suits. Seems to me that someone needs to bust this up so we can get the real scoop.