Google ad credits are like the Fed printing money — Facebook and

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 firms disclosed various promotional grants or credits to firms to help them through the crisis. The prior 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 firms 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 modest businesses. It’s to push ad auction prices up.