The Google Dilemma – Gambling Related Adwords Ads (or Not?)
In 2007, Google did as Google does and made a sweeping decision that wound up tipping the Adwords community on its proverbial rear.
What was this sweeping decision you ask? Good question.
In short, Google decided to take all gambling and casino related Adwords adverts offline. Of course it was a good source of revenue, however the legal aspects were becoming complex as you can imagine. So an executive decision was made and then implemented globally.
Additionally, Google gradually started clamping down on those who tried to apply “back door advertising” – luring clients into online games (and gambling related jobs), with the intent of offering gambling related products and services afterwards.
Ironically, these “back doors” allowed operators to advertise at ridiculously low costs. But of course to the powers that be, it was unacceptable, and Google slammed the door. They did not want to be connected to anything related to gambling whatsoever.
In 2008 however, winds changed and Google reintroduced gambling related ads on Adwords for a number of countries (mostly in Europe) including Britain and Ireland. At the time, the resulting revenue was estimated at around 100 million pounds per annum (around $150M). Financially speaking, gambling is a huge industry, and each new player is worth a pretty penny.
Interestingly though, among the countries not being served gambling related ads are Germany, Russia, and China. While it is understandable that the Chinese communist government would not condone gambling these days, gambling was in fact a common activity all throughout the history of pre-communist China.
The policies however are strict, effectively prohibiting the capturing of email addresses for repeat marketing. So, even though the ban was lifted, the cost per customer acquisition escalated dramatically.
For instance – by using the “back door” advertising of old, it was possible to get clicks for half a pound (or about 75c each), but many companies are now paying twenty pounds (or thirty dollars) per click! While it is still worthwhile given the huge market, profit margins are definitely smaller.
To the discerning eye, it would appear as though Google withdrew gambling advertising from Adwords only until they could put a system in place to exercise total control over it. And they closed all other “back door” avenues in the meantime.
When considering the sheer amount of revenue to be generated from advertising gambling related products and services, Google is left with the dilemma of displaying these ads in the US. While the market potential is huge, there is an added complication; gambling activities (including online casinos) are totally illegal in some states.
Despite the complications, there are a number of cases throughout the past few decades where the gambling industry has taken on the U.S. law and won. Cases such as one in New York where all gambling advertising was initially disallowed; but the court eventually granted legal, licensed gambling operations to advertise their businesses in the media.
The reasoning was that a total ban on advertising contravenes the spirit of the free market system, making it difficult for new companies to enter the market. The example was offered of what happened when (in Europe) tobacco advertising was banned a few decades ago.
The existing companies simply sat back and raked in the profits – which kept on increasing, even when the number of clients started dwindling due to public health awareness. New brands found it impossible to establish themselves in a competitive market without being able to promote their brands. The result was that the existing, established brands eventually owned the market.
Considering the targeted efficiency of Adwords ads, the availability of this specific advertising medium would allow gambling operators and vendors of gambling related products to advertise to the ideal prospect, using a medium that is predictable, measurable and calculable.
While there is much debate going on around whether Google will ever reintroduce gambling related advertising in the US, it is only logical to come to an affirmative conclusion based on their actions in other countries.
In short, if there is a way to make money out of it (legally of course) Google will find it and implement it.
It might not happen overnight, but it is bound to happen. It may require specific systems and software to implement the application (along with a few technical challenges ahead) but it follows common logic that ultimately “Big G” will always be working towards the money.
That’s just good business.
This article has been bought to by Catherine on behalf of The Online Bingo Finder where she regularly looks into the deeper matters regarding online gaming, including bingo, casinos and instant games.