The Google AdWords Class Action Lawsuit

June 11, 2009 by
Filed under: Google 
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2 days ago myself, along with all U.S. AdWords Advertisers received a notice that Google was being sued for $20 MM (million) because it was alleged that AdWords advertisers were being charged just above their daily limits on their AdWords campaigns.

As an example, if you had set a daily budget of $20 for a Campaign, at the end of the day your total cost might be $20.73 or $21.12 instead of just $20 or a few cents below that figure.

Just pennies to one individual but overall a huge income earner for Google.

Consider this for a moment.  Let’s say for the sake of argument that there are 300,000 (and I’m being conservative here) campaigns running every day at a set budget of $20.

That grosses Google $6,000,000 dollars a day.  However, let’s say that each of these advertisers were only charged $.20 over their daily budget.  $.20 doesn’t seem like much does it?  Not to you or to me as an individual, but as a whole, that same $.20 on each advertisers accounts grosses Google $60,000 a day.

Now consider that same $60,000 over the course of 30 days.

$60,000 x 30 = $1,800,000.  Quite a little added “extra” in income isn’t it?

Google claims that regardless of what the minor fluctuations are each day on a campaign (and I’m paraphrasing here), will still only add up to the advertisers monthly budget.

So regardless of the pennies here and the pennies there, if you had set up a budget of only spending $400 in a month, then your cost would not go over that $400 regardless of what the daily minute charges were.

All this being said, it is interesting to note that literally the day after I received the lawsuit email, my daily budgets were pennies BELOW what I had set whereas prior to receiving the lawsuit information my budget was pennies ABOVE what I had set as my daily limit.

Coincidence?

Here’s the official gist of it:

“The Court has certified a Settlement Class defined as: all persons and entities residing in the United States who have paid Google for advertising pursuant to Google’s AdWords program who (a) became AdWords advertisers between June 1, 2005 and February 28, 2009, inclusive, and who were charged more than their per day Daily Budget on any day during that time period; or (b) paused their AdWords advertising campaigns on any day during the period from January 1, 2002 to February 28, 2009, inclusive, and during the same billing period when their AdWords advertising campaigns were paused, were charged more than the product of their per day Daily Budget times the number of days that such Class Members’ advertising campaigns were not paused during that billing period.”

Now, this has been going on for some time as many of you might know – it tends to move in and out of “buzz” since the time periods between what’s actually going on is very long.  However, Eric Goldman’s blog gives you all of the history you need to know regarding this case as well as all of the information on the most current Class Action Settlement.

So if you’ve been wondering what all the buzz and noise online is about, this would be it.

Talk soon!

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7 Comments on The Google AdWords Class Action Lawsuit

  1. Matt Wolfe on Sun, 5th Jul 2009 6:08 pm

    2. It’s weird because this has happened to me several times. I have put a daily budget of $25 and at the end of the day, I had spent $26.34 or something like that. The thing is, Google only ended up billing me for the $25. When I saw that, I was very happy because I realized that Google basically gave me an extra $1.34 in advertising. With some of my keywords, that could be an extra 4 or 5 clicks. Google will do the right thing….

  2. Bill Hazelton on Tue, 14th Jul 2009 1:15 pm

    3. I’ve been a part of 2 class action lawsuits against Google as an Adwords advertiser. The first one resulted in zilch. This one will more than likely result in the same thing…zilch.

    As a performance advertiser myself, daily budgets are meaningless. For most Adwords customer, I just don’t see how meaningful this lawsuit can really be for them.

  3. kristinewirth on Tue, 14th Jul 2009 2:39 pm

    4. Matt – That’s very interesting. I have not had that happen to me but here’s to hoping :-)

    Bill – I agree that the lawsuit will probably results in hardly anything at all and as an individual advertiser, the dollar amount really ads up to almost nothing but to me, it’s the principal of the thing. I for one do work with daily budgets and a dollar here and a dollar there really ads up in the long haul. It will be interesting to see what comes of this…if anything. It seems as though the topic arises every so often, then dies down only to resurface again a few months later.

  4. Lisa on Thu, 30th Sep 2010 1:47 pm

    5. I’ve been using google adwords for two week now and I’m getting more visitors on my own. Thanks for the article, I do notice from time to time am getting a bit more for my cost per day.

  5. Carla Holland-Strange on Mon, 25th Apr 2011 7:25 am

    6. google not only over charged me, but charged one of my new websites for clicks that did not happen, I watch my stats everyday and there was a site that wasnt getting but about 14 clicks aday and I was over my limit of $50 a day. That was my poosrus.com site……….. I had 8 sites at that time. I do not believe that thi suit will ever settle. nothing but ripoffs have I had doing business online.

  6. Maxie on Mon, 9th May 2011 5:36 pm

    7. Does anyone know if there has ever been a class action suit against Google Adwords for other reasons ?

    For example, where you get charged for 2 clicks, even though there has only been one impression ?

    Also, where you specify a two word keyword in broad match, but clicks are incurred when just one of these two words is searched for ?

    Thank you.

  7. Russ on Wed, 8th Jun 2011 9:20 am

    8. I’ve been banned from Google adwords because my site is an affiliate site and directs visitor to click on another site. This is for woodworking plans.

    I’ve agreed with them that I won’t advertise that site anymore but they’ve banned me not the site so now I can’t advertise any products on adwords so I go to Bing and Facebook instead. Would love to see a class action suit on this topic.

    Any comments

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