Google Lost A Billion In Unspent Ads

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Google Lost A $Billion In Unspent Ads

By: Nathan Weinberg
2006-04-21

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.

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About the Author:
Nathan Weinberg writes the popular InsideGoogle blog, offering the latest news and insights about Google and search engines.

Visit the InsideGoogle blog.


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