Google Lost A $Billion In Unspent Ads

By Nathan Weinberg

BuyGoogle’s got the fascinating tidbits from the Google earnings announcement conference call, including this biggie: Over a billion dollars in ad money that was allocated to Google went unspent. Although the period in which this happened is unclear, it is still a significant item Google will want to handle.

What would cause money to be not spent? I’m thinking it’s money allocated to ad spends that wound up losing the Google AdWords auction process. After all, you can plan on spending $4 a click a million times over, and spend exactly $16 for four clicks since you were outbid by a dime per click. Oops.

Of course, the easy (and, of course, not at all easy) solution is that this is an inventory problem, not a system problem. Google needs to find places for this money to go. After all, its not like the per-click prices can go much higher; if it isn’t mesothelioma, it isn’t worth more than what’s currently being paid. Considering how poorly AdSense is growing, I’m not sure how Google can grow that network without slashing profits from that division. Maybe they need to buy one of the smaller players that have a lot of publishers.

Posted:
April 21, 2006 by Nathan Weinberg in:
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3 Responses to “Google Lost A $Billion In Unspent Ads”

  1. Search Engine Journal » A Billion Dollars Lost Unspent Google Ad Money Says:

    […] From InsideGoogle: “BuyGoogle’s got the fascinating tidbits from the Google earnings announcement conference call, including this biggie: Over a billion dollars in ad money that was allocated to Google went unspent. Although the period in which this happened is unclear, it is still a significant item Google will want to handle. […]

  2. Derrick Says:

    This is behavioral, not really indicative of lost opportunity.

    Ad buyers put in high budget thresholds to ensure that their campaigns continue running, but don’t actually expect those numbers to be hit.

    There was a question on this in the investor call Q&A and I don’t have the impression that there is a tremendous amount opportunity in tapping this number, but it would be interesting to track how the percentage of spent vs unspent budget dollars changes quarter to quarter (not that they will ever give us that information - even in leaked Powerpoint slides :)

  3. adsv1.info » Blog Archive » Says:

    […] ” AdSense ” InsideGoogle ” part of the Blog News Channel By Nathan Weinberg. Google AdSense doesn’t like ants, clearly. Judy Breck writes that, following a science article about the survival of ants, a blog post had the almost customary AdSense ad block. […]

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