Google AdWords: 11 herbs and spices revealed
Bidding on ignorance
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Google likes its secrets. But there's one secret it likes more than any other. We don't mean Goobuntu. Or the GDrive. Or those Juniper-killing GRouters. We mean the secret that makes the millions, the secret at the heart of the Mountain View money machine.
It's not much of a secret, really. It's right there for all to see. But it's something Google refuses to admit - whether the question comes from from a nagging reporter or a loyal customer. If Google keeps its loyal customers ignorant, Google makes more money. Much more.
Almost all of Google's revenues arrive via AdWords, its flagship advertising program. Billed as an auction, AdWords serves up text ads in response to Google keyword searches. You bid for a particular keyword or group of keywords - "whips and chains," for instance, or "free Adobe Acrobat" - and if you bid high enough, your ad may appear when some unsuspecting web surfer searches on those terms. Then, if they actually click on your ad, you pay Google a fee somewhere south of what you bid (depending on what your competitors are bidding - and Mountain View's mystery algorithms).
Even among seasoned AdWords advertisers, the assumption is that you're bidding for the right to post an ad every time someone searches on your keyword. Or at least most of the time. The wisest advertisers are well aware that Google may tweak ad placements based on the surfer's location. And many speculate that Google is targeting ads based on the surfer's surfing habits. But almost no one - including some of the cleverest search engine marketers we've spoken to - realizes the truth. And that's because Google won't acknowledge it.
The truth is that Mountain View carefully controls the number of impressions each ad receives - presumably as a means of maximizing its own revenue. To wit, if you bid on the keywords "pork dumplings," your ad will likely appear on only a small fraction of "pork dumpling" searches. And you have no way of knowing how small that fraction is.
Drawing on the ad hoc research of a longtime Google advertiser, we made this claim back in July of last year. And it's confirmed by AdGooRoo, an independent outfit that tracks Google ad placements from servers installed across the globe.
"Google is going to display the ads that make them the most total revenue," Rich Stokes, AdGooRoo founder and CEO, tells us. "Every single ad campaign I've seen has at least a handful of keywords - sometimes far more - that are only getting three to five per cent of the coverage [impressions]."
In other words, advertisers aren't bidding for what they think they're bidding for. And Google has rigged its ad system so that it's dominated by only a handful of advertisers. According to the latest numbers from AdGooRoo, three per cent of Google's advertisers receive 80 per cent of all ad impressions.
Next page: Impressionable Advertisers
COMMENTS
Lying and Stealing
What Google is doing is unethical because it intentionally causes financial harm to advertisers using their system in these ways: 1) Properly targeted ads purchased at the REAL auction prices generate a certain measurable percentage of sales. 2) Not showing an advertisers' ads for all the SPECIFIC (exact match) searches they are willing to pay for is intentionally depriving them of sales. 3) Selling them garbage traffic that will not convert in place of targeted traffic is fraud. 4) Artificially inflating the bid prices when advertisers are most likely to generate sales (during the holidays or whenever those keywords are in high demand) is immoral. 5) If your ad spending spirals upward and conversion rates drop you are the victim of this Google game. When you try to reduce spending Google's system will start showing unrelated ads in place of those you've paused or even deleted!
CONCLUSION: If you're buying ppc ads on Google's system use ONLY exact match and watch your spending constantly. They can NOT be trusted. If you're spending a lot of money there the only way to control their system is through employing an automated IMPARTIAL third party analytics program such as ClickTracks feeding a bid management program that can immediately shut down spending anomalies before you lose your shirt.
BETTER: Replace all ppc ad traffic with other sources. It is a bad idea to do business with a company that can not be trusted.
AFFECT ON USERS: Google's system is worse for users of their search engine because it does not show them the most targeted ads, is inconsistent in what it does show, and provides a less optimum searching experience.
P.S. Google AdWords used to be an exceptional gift to businesses providing direct access to specific products for searchers. It worked extremely well. (And yes, lots of people DO click on ads and DO buy products and services from those ads.) Too bad Google got greedy and turned it into what it is today.
P.P.S. Why do so many still use Google? Because they have an extraordinary percentage of the search traffic. They sorely need some true competition and for us as Internet users to use something else. Until that happens Google has far too much power over far too much.
Google is clever but one point to consider
Hi there,
Interesting information revealed. Google shouldn't act like that.
But I have something to add. May be I am wrong but if I say correct then no claims for Smart Google!
While starting campaign, Google gives us two options:
1. We set our daily budget. No matter how long we want to stay. When clicks reach our budget, our ad is not appeared onward.
2. Second option is that we let Google to set our impressions according to our daily budget. This option helps those people who have low budget. For low cost ads, Google automatically set criteria for impression so that AdWord must appear throughout a day.
For example;
While setting out campaign, if I set $30 daily budget for one day then impression will be less. If I set $100 then my ad will be appearing more.
According to Cade’s point of view;
“Mountain View charges only when someone clicks on AdWord. If we want our ad at prominent position, then we must increase our bid... its okay. And if we can't hike our budget then at least our ad should appear, even at last page. But Google doesn’t show low budgeted ad at every search. Its means, we are loosing opportunity of getting client at that search query in which our site was not appeared.”
This is what I extract from this article but bottom line of my tip is that it could be ethically wrong only when Google hasn't given us second option. It is obvious, that if we set limit of our daily budget by choosing 1st option then Google will show our ad until our budget ends. It could be finished by 3 hours or at the middle of day.
Anyway, these all views based on judgments and experience. No one can claim exactly what is Google doing? Unless, we know about exact algorithm.
BTW – What about Yahoo and Live? We talked only for Google. I think YSM and Live are doing same as their mother (Google) doing :-) What say???
Thanks
Is this news?
I have never been under the impression (no pun intended) that you were guaranteed on getting an impression if you bid the highest. All you are paying for is increasing the likelihood of an impression. The more people that are bidding for the same words, the less likely it is.
Apparently the most expensive word combination on Google is "Asbestos Lawsuit" This is because:
a) The term is quite specific to a target market (those seeking litigation for exposure to asbestos)
b) The advertiser is likely to make a significant amount of money out of litigation and therefore is prepared to pay a lot for the referral
c) The number of suppliers (law firms) specialising in this litigation is comparatively small compared to, say sandwich shops.
In this situation you are much more likely to get a high number of impressions. However, if you are a sandwich shop, the amount you bid is going to be limited by your potential revenue for an individual purchase and your impressions are going to be limited by the number other competitors bidding a similar amount for the same terms.
This all seems pretty logical to me. I don't think it's witchcraft or voodoo.
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