Feeds

Screwgle™ - Google's new ad revenue model

It's wallet-emptying good...

Internet Security Threat Report 2014

Google's strict code of secrecy calls for extra silence when the subject is AdWords, the epic money-making machine fueling the company's drive towards world domination. But sometimes, the truth slips out.

Earlier this month, during Google's all-important quarterly earnings call, a financial analyst outed the company's plans to squeeze who knows how many extra dollars from the world's online advertisers. Though no one seems to have noticed, this astute money man mentioned "Automatic Matching."

"Automatic Matching" is an AdWords beta program that Google launched ever so quietly at the end of February. Via email, the search giant notified an unknown number of advertisers that if they ever failed to spend their daily ad budget, this new feature would automatically spend it for them.

With AdWords, you arrange for your very own text ads to appear in response to Google keyword searches. The program is billed as an auction. You bid for a particular term or collection of terms - "chia pet," say, or "suppositories" - and if you bid high enough, your ad will turn up each time a web surfer searches on those words. And each time someone clicks on your ad, you pay Google a fee somewhere beneath your bid - until you reach your daily budget.

Of course, if a relatively small number of surfers search on your keywords, you won't reach your daily budget. And that's where Automatic Matching kicks in. When Auto Match is turned on - and it was turned on by default with many (if not all) beta-testers - AdWords automatically spends your unused budget on keyword searches you aren't actually bidding on.

"Automatic Matching automatically extends your campaign's reach by using surplus budget to serve your ads on relevant search queries that are not already triggered by your keyword lists," reads Google's email to beta testers. "For example, if you sold Adidas shoes on your website, Automatic Matching would automatically crawl your landing page and target your campaigns to queries such as 'shoes,' 'adidas,' 'athletic,' etc., and less obvious ones such as 'slippers' that our system has determined will benefit you and likely lead to a conversion on your site."

Naturally, this boosts Google's bottom line. But as search marketing consultant Dan Theis has pointed out, it doesn't exactly benefit the average advertiser.

"They're offering you the exciting opportunity to bleed every penny of your budget every day, advertising against keywords that you didn't want to bid on," Theis says, before unloading the sarcasm. "Sure, if I sell Adidas shoes, why wouldn't I want to get some traffic from people who searched for slippers? I mean, it's not like I'm trying to turn a profit or anything, right?"

Well, midway through that Google earnings call, Bank of America analyst Brian Pitts popped up to ask about the progress of Auto Match - which Google has yet to publicly acknowledge with anything more than some extra words on its AdWords help pages.

"You expanded Auto Match to more advertisers this quarter. Do you see this as a significant driver of coverage going forward?" Pitts asked, referring to the number of Google results pages that include ads. If more pages include ads, then Google gets more paid clicks. And more paid clicks mean more revenue.

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Same old iPad? NO. The new 'soft SIMs' are BIG NEWS
AppleSIM 'ware to allow quick switch of carriers
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.