All the businesses in my town have been receiving a constant stream of flyers from Google over the last 6 months offering either free ads for a whole month, or vouchers to the value of 50euro. I am wondering how widespread these campaigns are, and if they are pushing down the earnings of website publishers. Does Google actually meet the cost of these free ads? Or do they simply put them on the ad boards and let the publishers bear the cost of the free ads? It would certainly bring down the average price per click, if many of these clicks were Google give-aways.
Yes, here in Europe. Although Google feeds ads based on a visitor's location, and most sites have a mix traffic of US and European visitors, so it a price drop in the European portion might hit your earnings. My site attracts equal numbers of visitors from North America and Europe. Google always pays site publishers in US$ irrespective of the advertisers' currency.