Feeds

Google AdWords: 11 herbs and spices revealed

Bidding on ignorance

Boost IT visibility and business value

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.

Boost IT visibility and business value

More from The Register

next story
Apple fanbois SCREAM as update BRICKS their Macbook Airs
Ragegasm spills over as firmware upgrade kills machines
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
Mozilla fixes CRITICAL security holes in Firefox, urges v31 upgrade
Misc memory hazards 'could be exploited' - and guess what, one's a Javascript vuln
NO MORE ALL CAPS and other pleasures of Visual Studio 14
Unpicking a packed preview that breaks down ASP.NET
Captain Kirk sets phaser to SLAUGHTER after trying new Facebook app
William Shatner less-than-impressed by Zuck's celebrity-only app
Cheer up, Nokia fans. It can start making mobes again in 18 months
The real winner of the Nokia sale is *drumroll* ... Nokia
EU dons gloves, pokes Google's deals with Android mobe makers
El Reg cops a squint at investigatory letters
Chrome browser has been DRAINING PC batteries for YEARS
Google is only now fixing ancient, energy-sapping bug
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
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.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
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.