Google provokes inflation in the adwords network

Recently, Google has been hard at work distributing AdWords vouchers of $ 75 and $ 100 to stimulate additional activity of advertisers. During the year I activated several such vouchers on one of the almost inactive accounts. By accidentally visiting the AdWords site, I even received an invitation to register within 48 hours with a voucher to boot.

What effect do coupons actually have? The answer is obvious. By giving away free money to participate in the auction system, Google puts significant pressure on AdWords prices.

Let's look at the short-term effect.

1. We distribute free money to those who do not spend anything.
2. Some of them are starting to spend coupons. Since this money went easy, they are likely to bid at higher prices than in a normal situation, potentially reducing the position of real advertisers.
3. Advertisers with real money are forced to increase their bids in order to maintain their positions, or they will receive fewer conversions for the same money.
4. Google observes from the side how customer budgets burn out faster.

What is the long term? Will prices fall to their previous level when the company stops distributing free vouchers? Well, in theory, it should be that way. However, since Google actively sends notifications at lower rates, I think that advertisers will increase their bids rather than lower them.

A blind auction combined with the stimulation of artificial inflation seems to me to be a completely brilliant strategy, but I strongly recommend paying attention to other contextual advertising platforms before increasing spending in AdWords.