Ad auction platforms are giving out advertising funds to keep ad prices up.
Ad auction markets have been in turmoil since Covid-19 shut down much of the economy. Ad rates plummeted at Facebook and Google.
Both companies announced various promotional grants or credits to companies to help them through the crisis. Last week I received an email from Google informing me that it had deposited a $100 credit in one of my accounts “as a gesture of support.”
But the companies aren’t giving away free advertising from the bottom of their hearts. Much like the Federal Reserve trying to stabilize financial markets, ad platforms are trying to stabilize auction prices.
And what better way to do that than to take a page out of the Fed’s playbook: print money!
This pushes up the price that other advertisers are paying for clicks. The goal of giving away advertising funds isn’t to help small businesses. It’s to push ad auction prices up.