$800M to support small businesses and crisis response
blog.google
blog.google
- $250 million in ad grants ...
- $340 million in Google Ads credits ...
- A pool of $20 million in Google Cloud credits ...
A company that has a Bazillion $ in the bank, has means to really make a difference. This is not.
Edit/Clarification:
The original title was: "$800M funding and grants to support ..". Now they changed it.
I take issue with the claim of providing funding, and all they offer is free ADs. I appreciate that Google is doing _something_. I don't think they have to. I don't think that free ADs is a thing that people need right now.
We should acknowledge the fact that these corporations are acting now, while keeping the perspective that the cash they are spending isn't in government coffers to spend on this pandemic in part because of the low corporate taxes.
However, if you come forward and pledge to provide "800 Million funding and grants" and all you get is Google Ad credits, that's disingenuous.
By no means should any company be required to do this - but I know I'm going to take a close look at who I'm spending my money with when this is all over, and I'll be doing it through the lens of what they have contributed back to the communities that let them thrive in the first place.
I hope I'm not the only one.
Reading the announcement is somewhat sobering though.
Most of it (590 million) are ad "credits" or "grants". Keep in mind that Google ad revenue in 2019 was 134 billion.
> $250 million in ad grants to help the World Health Organization (WHO) and more than 100 government agencies globally provide critical information on how to prevent the spread of COVID-19 and other measures to help local communities.
It seems odd to me that institutions are supposed to resort to advertising to be shown above all the false, misleading and inaccurate information.
Is the WHO supposed to have a marketing team optimizing ad spending on Google during a pandemic to rank higher than inferior sources?
There ought the be ranking mechanisms or other side channels to keep important information on top in case of a crisis.
This is like fixing a leaking pipe by forcing in water from the outside.
Edit: apparently all ads relating to Coronavirus have been blocked. See below.
--- Small beneficial side effect: for Google: this drives up the prices a bit for pharma and other companies trying to profit with Corona related topics.
> $340 million in Google Ads credits available to all SMBs with active accounts over the past year.
This sounds decent at first, but also seems more like a token gift on further thought.
I reckon the goal here is mainly to avoid losing those customers. Many SMBs are closed, struggling, and will reduce expenses where possible. Marketing is often the easiest to cut right away, and many of those might not return anytime soon.
The hardest hit businesses are those that had to close down (restaurants, shops, etc). They won't be spending money now.
While a small, free marketing budget is good to have , it will also help stabilize/raise prizes more quickly once everything opens again.
This way they keep those customers at least somewhat engaged and can also prop up the numbers a bit.
> A $200 million investment fund that will support NGOs and financial institutions around the world to help provide small businesses with access to capital.
This is certainly the most impactful. Assuming 70% of that money reaches businesses, it could amount in 14_000 loans of 10_000 each.
I'd assume those to be loans though, so the fund probably won't be much of a loss in the medium term.
Google recently blocked advertisements around COVID19 and related issues. Would you please at least look it up before making this kind of assumptions?
https://www.blog.google/inside-google/company-announcements/...
I hadn't seen that, thanks for pointing it out.
There are still ads for terms like "breathing mask" though, so it could probably be circumvented to some extent. But that's to be expected and probably unavoidable.
Especially in light of these efforts, it still seems weird to me though to encourage institutions to use ads for information.
Fine. I offer free ads for 3 months worth 1B$ in my website, can I use it now for PR as well?:-)
Also, Google employs some of the best marketers on the planet, they should be showing ads for how to wear masks correctly and for practical safety guidelines, and leverage everything they've learned about human psychology to disperse information that could save lives.
That's what it means to actually want to do something, not just pretend with ad credits that ultimately boost your own business.
Right now I'm getting an ad for Milka chocolate as I watch news videos about the pandemic on YouTube, instead of being offered a chance to learn how to safely disinfect groceries.
Google does not need to give out ad credits to WHO to be able to run public safety ads today across all AdSense sites. They have the money and the talent to spin up a massive public safety campaign within days.
> Direct financial support and expertise to help increase the production capacity for personal protective equipment (PPE) and lifesaving medical devices. We’re working with our longtime supplier and partner Magid Glove & Safety, with the goal of ramping up production of 2-3 million face masks in the coming weeks that will be provided to the CDC Foundation. Additionally, employees from across Alphabet, including Google, Verily and X, are bringing engineering, supply chain and healthcare expertise to facilitate increased production of ventilators, working with equipment manufacturers, distributors and the government in this effort.
Not couple billions, but still the last bullet point is exactly what you're saying.
> Also, Google employs some of the best marketers on the planet, they should be showing ads for how to wear masks correctly and for practical safety guidelines, and leverage everything they've learned about the human psychology to disperse information that could save lives.
Google seems promoting the following link in their top page (which is perhaps one of the most valuable real estate in the internet).
https://www.google.com/search?q=coronavirus+tips&fbx=dothefi...
I think we should stop giving them a pass. If they can spend billions on fines, it's possible that they could afford to spend a comparable amount to help people and save lives. Don't you find it insulting that the bulk of the support package is ad credits?
> Google seems promoting the following link in their top page
Only if you search for coronavirus tips and related terms, that is nowhere near the massive marketing campaign Google could pull off across their network to bring vital information to the public.
I explicitly stated the phrase "in their top page", not "in their search page".
Btw, it would be good to always disclose your affiliation to Google on similar threads, or at least in your bio.
What does this really mean? Aside from the NGO stuff it sounds like it could just be taking advantage of the downturn to buy businesses?
Why since the beginning of 2019? If I just started a business at beginning of 2020, wouldn't I need at least equal amount of help, if not more?
If I was in the US now, my company and staff would qualify for a large number of help avenues, not to even speak of grants for our work on COVID 19. Over here? The AWS bill we pay monthly has doubled...because our currency has fallen that much. I won't meet payroll on Monday because clients have paused their work and payments to us...etc
Meanwhile here is all manner of funds seemingly available but just another new extra requirement out of reach.
As usual, the beneficiaries will be larger orgs and their army of consultants and friends.
But Google is doing a lot more beyond that:
"A $200 million investment fund that will support NGOs and financial institutions around the world to help provide small businesses with access to capital.... This is in addition to the $15 million in cash grants Google.org is already providing to nonprofits to help bridge these gaps for SMBs."
"Direct financial support and expertise to help increase the production capacity for personal protective equipment (PPE) and lifesaving medical devices. We’re working with our longtime supplier and partner Magid Glove & Safety..."
And I owned a restaurant. Restaurants, by and large, do not advertise on Google Search. If they do, it’s a small fraction of their ad spend. There are many ways to get the message across, like actually being good and having a connection with recurring customers.
The situation is pretty novel since there are significantly less options for offline interaction available this time. I don't think local businesses can cover most of the loss only with recurring customers this time.
The problem is that the cost per lead just went up dramatically. These ad credits will solve that problem for us and allow us to continue to generate leads. This is exactly the kind of help my business needs right now.
Realistically, apart from G Suite access for remote work, they don't actually have much to offer.
That being said, Google ad spend is a huge chunk of marketing budgets, so it probably will help the overall bottom line of these businesses a fair bit.
I understand G-suite has had some adjustments regarding limits and such.
I can't fault them for some effort even if it is hardly front line virus fighting. They're just not in that position.
I think your cynicism is just cynicism.
I'm not an accountant by any means, but I don't see how there even would be a deduction here. From what I could quickly dig up, even if you donate your services to a nonprofit, you can only deduct your costs, not the price you'd normally charge a paying customer. And of course this isn't even a nonprofit; it's just a freebie to a business.
So while cutting supply might create higher auction prices for paying customers (than you'd otherwise have), the grants themselves don't seem like they'd do anything advantageous for taxes.
Of course, there are expenses with serving ads that they can take out after revenue to reduce how much profit they'll be taxed on, but I'm not sure there are many expenses coming from this giveaway. Seems they would have incurred most of the expense without doing the giveaway because they've already got the computer hardware up and running to serve ads. This is just a way to try to get some value out of the expense that you're going to pay anyway.
Isn't this just an accounting trick? They're going to lose revenue. But can't they now issue this "grant", and then pretend they aren't losing revenue -- they're just issuing a grant?
Or is that not how it works? I don't know, but would like to know.
I sell you a $10 gift card today. I can't recognize the revenue until you spend the $10.
However, if I know you're going to spend $10 less at my business this year, I can GIVE you a $10 gift card. Then, hopefully, you'll come to my business as usual. When you spend the $10, I can record that as revenue, and then I can record a $10 expense for the cost of sale.
Top line doesn't change. I think. But I'm not an accountant. I don't know.
If people spend $10 grant money, I believe you can record $10 revenue and $10 expenses. Top line is artificially $10 higher. Bottom line is unchanged.
Again -- this is how I think it works. But I don't know.
No, they see their Ad sales declining, so they are trying to stimulate their own business with this act. "Grants" to new customers so they hopefully become buying customers in the future; loans (nothing like becoming a lender in this economy); and of course grants/loans will just bid up ad prices on existing customers. Not to mention all the major business just highjacked $5.75T from the taxpayers so they will have nothing better to do than waste that on ad buys.
>$340 million in Google Ads credits available to all SMBs with active accounts over the past year. Credit notifications will appear in their Google Ads accounts and can be used at any point until the end of 2020 across our advertising platforms. We hope it will help to alleviate some of the cost of staying in touch with their customers.
And you seem to be overlooking/ignoring:
>Google offers every employee annually to $10,000 from $7,500. That means our employees can now give $20,000 to organizations in their communities, in addition to the $50 million Google.org has already donated.
$20,000 x 100,000 employees = $2B in discretionary credits (not dedicated to new customers, but certainly does not exclude them)
$30k MRR gone overnight alongside $40k already earned in Adsense income siezed by Google. All this happened early this month of March, effectively crippling our ability to take care of employees and survive the Covid-19 crisis.
Such hypocrisy.
Maybe you should write a blog on this.
If they did tell you what you did wrong, you could figure out what the rules in their spam detecton system was and game the system, and their losses from you or anyone gaming their adspam detection system are far greater than loosing a few false positive customers.
Sux for you, but works great for them.
It doesn't have to. This is a choice Google is making on how it wants to conduct charity.
>The federal government should be providing interest-free working capital and guaranteeing the sale of every glove and mask
Sale at what price? It has to be bounded or else it sounds ripe for fraud (people are monsters).
> anyone can produce.
So is the loan for anyone that wants it? Or just for companies that have proven they can make gloves and masks? If the former, what stops people from just using the loan to fund salaries while making a ritual display of making masks for a few months and then declaring bankruptcy after collecting salaries during that time?
Guaranteeing the sale means that the manufacturer will assume no risk for overproduction. The price would be whatever the prevailing market price was before the crisis or maybe with a slight premium.
In essence, the government should remove all business risk for manufacturers of needed equipment.
As much as this will annoy civil libertarians, the powers of the state are vast and in emergencies should be used to protect people when justifiable and without harming people. The takings clause will ensure that whatever companies are affected will be monetarily compensated and they have recourse through our courts.
Maybe they should choose not to maximize tax avoidance instead.
I'm really glad somebody is stepping up to the plate in the meantime. Every bit counts.
Thats the actual funding the Government was Already supposed to have (and then be responsible for using correctly) to do this.
So, in my opinion, the Government (read: the fucking citizens of the country) should demand fealty payments from ALL the companies that were under-paying taxes.
All companies, who are considered "corp=people" should be taken to task and be required to PAY rather than get a bailout.
Have you noticed the marketing push by Verizon of late?
That company, for whom Ajit is their mole in the .gov, should be just nationalized and turned over. (obviously, this then means that its a 100% surveillance company... so that must be weighed)