Feeds

Eye of newt: Inside Google's AdWords auction

Or whatever it is

The Essential Guide to IT Transformation

At a Minimum

If Google doesn't like your quality, it may even force you off that results page entirely. With each so-called auction, Google gives every advertiser a separate minimum bid, and this too is a product of quality score. For one advertiser, the minimum might be 10 cents. For another, it might be 10 dollars. And unless you bid your minimum, you can't join the bidding.

There are ways of improving your quality score - and your minimum bid. But you can't improve it unless you pay it - over and over again. And many smaller advertisers can't afford to play that game.

If your quality score is low and your minimum bid is high, you typically end up at the bottom of Google's results page, paying more for less traffic. "Roughly speaking, an ad that has twice the quality of another ad will tend to get about twice as many clicks, and will only have to pay half as much per click as the competing ad," Google chief economist Hal Varian wrote in a recent blog post. This, of course, makes it all the more difficult to improve your quality score. And so on. And so forth.

Again, Google is working to weed out what it sees as dodgy ads. But in doing so, it puts the squeeze on newer advertisers who've yet to learn the ropes - while raking in some added dough. "Even for experienced advertisers, setting up an AdWords account is a real challenge," consultant Andrew Goodman, the man who wrote the book on AdWords, has told us. "If you're a new advertiser, either you fail or Google makes a bunch of money off you."

For some, the only option is a switch to some other search platform - an option that grows less attractive by the day.

"An ad that has twice the quality of another ad will tend to get about twice as many clicks, and will only have to pay half as much per click as the competing ad." -Google

False Impressions

But at least Google acknowledges that the minimum bid exists. Though Mountain View remains largely mum on the matter, there's evidence the company exerts even more control over the alleged AdWords auction. It would seem that those who typically receive higher placement on the results page also receive more impressions - i.e. their ads appear on more pages.

With his blog post, Google's chief economist indicates that AdWords does limit impressions for certain ads at the bottom of its list. "Ads that have particularly low quality may be disabled, and not shown at all," he says.

But Mountain View may go much further. According to a study run by one high-volume advertiser, Google plays games with impressions not only at the bottom of its ad list, but at the top. For each keyword, this study indicates, the ad that typically sits at the top of the page receives significantly more impressions than the ad that typically occupies the second spot, the ad in the second spot receives more than the third, and so on.

"If you bid your ad to rank 1, you get about 60 per cent more impressions than if you bid it to rank 2. Rank 2, in turn, gets about 30 per cent more than rank 3, and below that, there is about a 10-per-cent-per-rank boost," this advertiser says.

The study compares AdWords to Yahoo!'s original search advertising platform, which was replaced in the middle of last year. Yahoo!'s old school platform was a straight eBay-style auction. The highest bid got the highest spot. And Yahoo! gave the same number of impressions to each bidder.

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.