Judge Sides Against Google In Battle Over AdWords Discount, Geotargeting

In a blow to Google, a federal judge has ruled that the company must face trial for allegedly overcharging a search advertiser.

U.S. District Court Judge Edward Davila ruled last week that Rick Woods, a Fayetteville, Arkansas-based attorney who used AdWords to market his legal practice, could proceed with claims that Google failed to give him a promised discount on at least three ad clicks, and that Google failed to geotarget the ads as promised.

The ruling stems from a lawsuit brought by Woods in 2011. He alleged that he used AdWords from September of 2009 through early 2011 to market his legal practice. During that time, Google allegedly reneged on a promise to give Woods a “smart pricing” discount -- which was supposed to reduce his cost-per-click when ads were served on sites within Google's publisher network.

He also said he was charged for clicks originating in Pennsylvania, Texas and Japan -- despite Google's alleged representations that the ads would be targeted to users in Arkansas.



Google unsuccessfully argued that it was entitled to summary judgment, or a ruling in its favor before trial. The company contended in papers submitted two years ago that Woods received the smart pricing discount for all ads other than mobile ads, which were excluded from smart pricing when Woods advertised.

Woods countered that he purchased "text" ads, not mobile ads.

Davila ruled that there was a factual dispute about the meaning of "mobile ads," and whether ads purchased by Woods that were displayed on mobile web browsers were excluded from the smart pricing discount.

Given the factual dispute, Woods was entitled to take his claim to trial, Davila ruled.

Google also argued that it disclosed to advertisers that location targeting was sometimes based on people's search queries, as opposed to geolocation data.

Davila ruled that even though Google disclosed its practice on a help page, Woods was entitled to have a jury decide whether he relied on Google's statements that ads would appear in certain locations.

"A reasonable jury could conclude that Woods saw and relied on Google’s statement that ads would be targeted to users in a specific geographic area; that Google in fact charged for clicks on Woods’s ads outside of the designated geographic areas; and that Woods was charged for these clicks," Davila wrote.

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