Google is helping small businesses by providing Ad credits? Of all things a small business may need, Google thinks Ads are the solution? The response to this crisis has my cynicism and disdain for our system growing every day.
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)