This Man Is Furious At Google For Taking Hundreds Of Thousands Of Dollars From His AdSense Account

Google is being sued by a handful of companies who claim that they earned thousands or millions of dollars on their web sites using Google’s AdSense advertising tool, but Google then wrongly confiscated the money from their AdSense accounts and returned it to their advertisers.

One company alleges it lost $US1 million this way.

Google, of course, has denied the allegations. The company declined to comment specifically on the litigation when contacted by Business Insider. Historically, Google has tried to get bad actors out of its high-quality ad publishing system. Some of these publishers may have used bot traffic or placed ads in a way that “forces” users to click on them. The company has longstanding bans on such publishers. It makes sense for Google to root out websites with poor quality inventory and scraped content, and advertisers like it when Google refunds money that was spent on low-quality clicks.

Google isn’t keeping the money — it’s returning it to the advertisers who spent it in the first place. So the search giant has no financial incentive in the fight.

Even so, a man whose company has been through the AdSense wringer contacted Business Insider recently to explain why he believes Google does actually have an incentive to reverse payments that publishers believe they have legitimately earned. This man’s website earned hundreds of thousands of dollars on AdSense until Google suddenly reversed the payments back to his advertisers, he claims. He asked not to be named because he is in a dispute with Google about these payments, and because he works in the tech industry and doesn’t want his criticisms of Google to hurt his career.

The payment reversals perform the same function as “kickbacks” to advertisers, he alleges, which keep advertisers coming back to spend more on Google.

We should caution you that this source is obviously biased against Google. So take this with a fistful of salt.

His theory is worth reading, though, because AdSense payment reversals are clearly a huge issue among Google’s publisher partners tools. They may not be able to prove their claims, but this is what they’re talking about in the marketplace — and that’s a genuine PR issue for Google.

The man’s basic case is that when the revenue reversals go back to the advertiser, it functions like a net discount on the advertiser’s budget. That discount makes the budget spent on AdSense look more effective — because even when the money is reversed the advertiser still gets all the traffic, users and sales the publisher generated. Any client analysing their ad budget is likely to increase their spending on the network that, net discounts included, is the most effective provider of traffic and clicks. (And the fact that Google filters out as many bot clicks as it can before charging advertisers adds to that argument.)

There is a certain down-the-rabbit-hole aspect to all of this. As we have noted before — Google is the focus of some surreal (and false) conspiracy theories about why it reverses AdSense payments to publishers and bans publishers from its network. What’s interesting about this source’s theory is that although it is somewhat conspiratorial it nonetheless illustrates the level of anger among some publishers at the way Google does business. Even if you don’t believe the theory, the anger is genuine.

Here’s his theory:

Returning all the money to the publishers is arguably more beneficial then keeping it. Online advertising is a market, advertisers are allocated budgets and must make choices with which networks to spend that money with. By returning money to advertisers they are making sure their ad network is by far the most competitive on the market.

Here’s a simplified example:

Imagine I’m Frank & Oak, and I have an October ad budget of 5k for google ads and 5k for Criteo. From both campaigns I was able to receive the same 100,000 ad impressions with 1,000 people converting at an average purchase valuing at $US100. Which means for every dollar I spend, my business generates $US20. But now the end of the month comes and I’ve received a $US300 credit back in my google account. I look at the numbers again and real ize on Criteo I made $US20 per $US1 dollar and on Google I’ve now made $US21.28 per $US1. Now I begin deciding on my November ad budget and figure well, I have an extra $US300 for my google budget, but since the numbers were also better, let me adjust and do 4k on Criteo and 6.3k on Google.

Now put this into scale and it’s pretty clear Google benefits by essentially providing kickbacks to advertisers at the publishers expense. When they suspend an account they withhold the ENTIRE amount, and offer zero visibility on how many clicks were “accidental”, “bot traffic”, whatever the reason for a particular ban. So even if the advertiser received the money from google, to some extent they still earned free brand marketing from those ad impressions, as well as click throughs, and conversions all at zero cost.

Now one could argue, Google is just creating a competitive advantage over other ad networks by being diligent in weeding out “fraud”. However, it gets to a certain point where “weeding out fraud”, “accidental clicks”, aka with-holding payment becomes a tool to fix the market and ensure that online advertising continues to stay healthy. Now you might ask, “what’s wrong with ensuring the online advertising market stays healthy?”. Well, “ensuring a market is healthy” is great, except when it’s being propped up in a border line fraudulent way at the publishers expense. Let me provide some context and I’ll explain:

• The internet is a very big place, publishers (especially small blog sites) are a dime a dozen…

• But Google does NOT have unlimited ad inventory.

• The demand for ad inventory far out weights the supply.

• Advertisers will only continue to advertise if it brings net positive results.

• Declining conversion rates mean declining cost for that ad space. AKA “If I’m seeing worse returns on my ads, I will spend less on those ads”

These are the basics of online advertising. Now let’s for example take the world of stocks. The stock market has market makers, their purpose is to keep the market healthy. Market makers don’t care the direction a stock will go, they only care about the market being liquid. Google controls a substantial amount of the online advertising market. In the online advertising world Google is the market maker, except their interest is aligned with ensuring conversion rates stay up. Since they have no shortage of demand, they can easily time and time again burn away that demand (the blog, the new media startup, XYZ site) to adjust the numbers for better conversion rates. Obviously it’s a little more complex than a two sided equation. It’s really multi faceted since you have to keep a steady number of ad impressions, click through rates, conversions, ect…

But, no matter how you slice it, Google DOES benefit from returning all the money it withholds, arguably more so than keeping it, and it clearly comes at the publishers expense. The thinking that Google can only benefit if it keeps the money is very short sighted. I’ve read my fair share of Google Adsense stories and I’m actually very surprised that I have yet to see anyone put forward this opinion…

Now, I don’t believe for a second Google created the banning system to deliberately increase their profit. I’m sure it came out of necessity when online advertising was in it’s infancy and Google had to fight off large number of true “bad actors”. But it’s not bans themselves that make this practice wrong, it’s the reasoning, zero transparency, and the full withholding of all money… It’s all these things that open up so many questions like:

• What about the rest of the money that was generated not through {accidental clicks, bot traffic, X reason}, how come that wasn’t paid?

• If google bans you for {accidental clicks, bot traffic, X reason}, then what is that amount they take out of your “estimated earnings” when they transition into “finalised earnings” I thought that deduction adjusts for things like that?

• How much traffic, was bad traffic?

• What defines accidental clicks?

The list can go on and most of these questions would probably lead to more questions. It makes it worse when conveniently Google can’t tell you any of the answers, because if you knew the answer to those questions you’d be able to “figure out their top secret proprietary traffic analysing algorithm”. You can probably tell by my sarcasm, that I don’t believe they have a very complex proprietary algorithm.

Google could could easily fix all this by being transparent about the numbers, and withholding only the dollar amount found to be as a result of invalid traffic. Maybe because a portion of the bans are only a result of market fixing. Maybe they don’t, because they truly don’t know what that number is. Maybe, they just don’t want to deal with the administrative process of figuring out that number. Maybe, it’s because they know if they were transparent and very clear, at the end of the day the person being banned will just ask for more “proof” or argue their proof is wrong. So the best option is probably to, issue bans, take everything, be as vague as possible, and offer no means of communication. At the end of the day if the disgruntled banned publisher is going to sue he will sue regardless if he was given his fair amount, or nothing at all.

Now suggesting Google bans intentionally to fix the numbers in the market is a serious accusation that obviously I have no idea if it is true or not. But, regardless how intentional or not it is, it is the result when your banning publishers that are not “bad actors” and withholding all of their earnings. Now personally, I don’t believe for one second there is no one who doesn’t understand this at Google. Google has zero incentive to change their policy, they benefit in each and every way. They are able to increase numbers that give the impression their ad network is more effective and that comes out of the publishers pocket. I’m not even going to go into the fact that Google tends to wait till the end of the month to issue these bans, that’s a completely different chapter that will make me another hour late for work…

The next interesting piece of the puzzle is the domino effect this plays on content marketing companies like Outbrain, Taboola,, ect… But I won’t get into that.

The last thing I’ll leave you with, out of 100 webpages you visit how many ads have you clicked? Out of 200? 500? 1000?

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