Among its many efforts to help the economy and combat the impact of the coronavirus, Google has announced that it will issue a $340m credit for SMBs to use in their Google Ads accounts. The credit for small- and medium-sized businesses will be available toward the end of May 2020 to be used on Google Ads platforms.
Google first announced this ad spend assistance plan in March, but it had not made all the details clear until recently. While there are still some questions yet to be answered, such as how Google will calculate the amount of credit available to SMBs, they have answered most of our questions concerning who will be eligible.
The massive ad spend credit is a small part of Google’s $800m plan to assist businesses, health organizations, and NGOs in the wake of COVID19.
Why is Google offering free ad credits?
The economic downturn that we have experienced since the outbreak of COVID19 has taken a toll on everyone, but those who are most vulnerable to these impacts are small and medium-sized businesses and the people they employ.
Google’s ad spend credit for these businesses comes as a gesture of goodwill for those who have relied on Google Ads to keep an active online presence and engage with their customers.
Small and medium-sized businesses make up the vast majority of the world’s economy. According to the World Bank, they comprise nearly 90% of all businesses worldwide, and they employ over half of the world’s population.
Google’s effort to help these businesses will hopefully slow the tide of economic repercussions resulting from worldwide coronavirus lockdowns.
Who will be eligible?
Ad credits will be distributed among small and medium-sized businesses across the globe, but how does Google determine who makes up this demographic? The answer is somewhat ambiguous, but this is what Google has stated: “We have a global team that is specifically designed to consult with and support the needs of small and medium-sized businesses around the world, and the ad credits will be supporting those businesses.”
What we can deduce from this is that Google already has pre-determined the requirements for what constitutes an SMB.
Furthermore, the credit for SMBs will be available only for existing eligible customers of Google Ads. New Google Ads accounts will not be eligible to receive this credit. In addition, eligible users will need to have spent on Google Ads during at least ten of the twelve months in 2019, and in either/or January and February of 2020.
Eligible users are those who directly advertised their businesses with Google or through a Google partner. Google has also stipulated that, in order to be eligible, users must comply with Google’s advertising policies.
How does it work?
Beneficiaries of the Google ad credit will be able to use their credit on any Google Ads platform, such as search, display, and YouTube, through the end of 2020; ad credits will not roll over into the following year.
The ad credit will only be applied to future ad spends for eligible customers, and recipients will not be able to use it for past or current advertisement that has already been invoiced.
Each recipient will have the credit applied to their individual account, including those who work with a Google Partner to manage their ad campaign. Google has stated, “A partner is an advertising agency or third-party that manages Google Ads accounts on behalf of other brands or businesses.” Partners will only be able to use credits for the subsequent accounts to which the credit is applied.
Google Partners who also advertise their own business using Google Ads will receive their own credit in their business’s Google Ads account.
Google has also announced that it will be issuing $20m in ad grants, on top of the $340 million in ad credits for Google Ads accounts, to assist NGOs and financial institutions with running public service announcements on Google Ads platforms regarding relief funds and additional resources for small and medium-sized businesses.
Along with these initiatives, Google has announced that it will provide millions of dollars of relief money for health organizations and governments to assist with their efforts in combating the spread of coronavirus.
When will advertisers receive their credit?
Eligible customers will begin to automatically receive their credit some time toward the end of May. The entire program will be rolled out in phases over the following months, and customers will be notified when their credit hits their Google Ads account.
How much will the ad credits be worth?
This is the big question around which there is still some level of uncertainty concerning the details around the $340m in ad credits. According to Google, each account will receive only one credit to be used toward future ad spends. The value of the credit will be determined by Google, but they have now made it entirely clear how they will calculate the value of each credit.
What we do know is that the value will vary from customer to customer. Google has given us some hints as to how they will determine the value, taking into account factors such as past Google Ads spend, the country where each customer operates, and the currency in which the Google Ads account is established.
As Google Ads releases details, it looks like the most likely scenario is this: the more you have spent on Google Ads in the last year, the more your credit will be worth.
Google’s initiative to distribute $340 million in ad credits is a substantial move among their many efforts to assist consumers and businesses throughout the worldwide health crisis. We hope that this attempt to help the global economy will result in an increased surge in commerce around the world. However, the credit for SMBs via Google Ads is but a drop in the bucket when it comes to the full economic impact of the pandemic.
The coronavirus has posed a very serious economic security threat, and only time will tell how this can be dealt with in the years to come. While this ad allowance from Google will help e-commerce companies sell products in search results, its impact will most likely do more to help Google’s bottom line than the economy as a whole.
Stay tuned for more search engine news as we update you on how the crisis continues to shape our economic future. If you have any questions or would like to share your opinion, leave us a comment below.