During the recent economic crisis, a Google analysis indicated many small and midsize business customers were confronting working capital constraints that limited their ability to invest in more of its AdWords advertising.

Since Google's main source of revenue is advertising, this was a challenge. "If these businesses realize a return on their advertising investments, they will advertise more," explains Axel Martinez, assistant treasurer and head of capital markets at $40 billion Google. "However, we learned that many were not optimizing their advertising campaigns in different monthly or seasonal periods. We needed to understand why."

Google soon learned that business customers were running out of money in the latter part of each month, and their credit was constrained due to the tight lending environment, hindering further advertising. The treasury team's solution was out-of-the-box.

"We have significant access to capital so we thought it would make sense to create a credit offering for these customers, where small and medium-size businesses could use a Google-branded credit card with an ample credit line and low interest rates, compared to industry averages, to pay for AdWords," Martinez says.

The company partnered with a bank to issue the credit card, dubbed AdWords, with card expenditures restricted to ad purchases from Google. The return on investment from their ads would provide businesses with enough capital to pay off the credit, among the factors that allowed the partnering bank to provide favorable terms and low rates. "Customers now have working capital, allowing them to grow their businesses via increased investments in AdWords, and we benefit through increased advertising sales and higher customer retention," says Martinez.

Instant Insights /

Silver AHA Winner in Working Capital

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