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Google's Smart Advertising Leads to More Clicks
The New York Times has a story discussing the sophisticated technique that allows for the spot-on advertisements Google serves up on pages across the internet. From the article: "Hidden behind its simple white pages, Google has already created what it says is one of the most sophisticated artificial intelligence systems ever built. In a fraction of a second, it can evaluate millions of variables about its users and advertisers, correlate them with its potential database of billions of ads and deliver the message to which each user is most likely to respond. Because of this technology, users click ads 50 percent to 100 percent more often on Google than they do on Yahoo, Mr. Noto estimates, and that is a powerful driver of Google's growth and profits. 'Because the ads are more relevant," he said, "they create a better return for advertisers, which causes them to spend more money, which gives Google better margins.' (Yahoo is working on its own technology to narrow that gap.)"
The ads on their own pages may work well, but AdSense is not without its problems.
Suck figs.
Don't forget about all the fraudulent clicks ey... It seems like they're having a lot of problems with those...
- Leon Mergen
http://www.solatis.com
BTW, the funniest Adsense I saw was on the Hulk'in Lunar Eclipse page where ads were offering Lunar Real Estate for Sale - turns out some company sells "deeds" for land on the moon ... ;-)
Yahoo costs about a third, but generates significantly less than a third the number of clicks.
In our 'where did you hear of our product' feedback from our customers, the split between google and yahoo is about 90% google, 10% yahoo. even if some percentage of people dont know the difference between yahoo and google, and even if some people just click on google because it's easy to do (the feedback switches between a type-in-your-answer and a drop down enable us to do quality of data checks, and the order of items in the drop-down, when presented, is constantly randomized).
Yahoo's miminum cost per click is an unreasonably high $10, while google's, if i understand it, has just come down in price.
All that said, the yahoo ads are still profitable for us. However, should that margin begin to thin, you can guess who is on the chopping block first. All the moreso if microsoft finally unveils a credible online ad program.
Incidentally: if you ever wanted to see an example of ABSOLUTELY HORRIBLE UI design on the web, try google's overture service (or whatever the heck it's called now - i have the terms mixed up). it's not just "baseline bad", it's "textbook example of bad, bad". I use yahoo's web interface about every 3-4 weeks, and have to constantly read the instructions for basic operations, since it is never really quite clear what is going on. That's right - i have to re-read instructions that i read 3 weeks ago because the interface is really that lousy. I've never looked at a single instuction with Google.
Tell me again what value yahoo provides? For the life of me, I can't figure it out. They are what--a link index of out of date links? Free email? While I like that they send me clicks, I can not understand why they can generate such traffic to be a major internet site.
Actually this isn't as obvious a statement as it seems to be.
Overture - (now part of Yahoo and the ads on Yahoo search results) uses a different metric: how much the advertiser pays them - to place ads in a higher position and hence generate more clicks. There is a near-logarithmic curve that typically defines click-through rates by position of ad - regardless of content of ad. So more relevance does not really mean more clicks there.
Google earlier used a simpler metric - based on the Click Through Rate (CTR - a measure of the ad's relevance to consumers with 1% CTR meaning 1% of searchers who saw the ad felt it was relevant enough for them to click on). The earlier metric was CTR times what the advertiser paid (Cost Per Click) or CPC. In effect, Google rewarded the advertisers who paid them most money through the greatest value extracted from ads clicked.
Today it's more complex - and Google has weighted the algo towards advertisers who bid more instead of what the news item supposedly states - essentially a more "evil", Yahoo-like behaviour.
Plug: I help run Pinstorm http://www.pinstorm.com/ a firm where we do a lot of the nice math and creative stuff to help advertisers on Google and Yahoo not spend so much - but get much much:).
Mahesh
If you search for the URL and then click it, the NY Times won't ask for any such information/limbs/children/souls (as of post time, anyway).
The catch: Knowing the URL (but there are sources for that).
You can hold down the "B" button for continuous firing.
I do help run one of the larger Search engine marketing firms in the world http://www.pinstorm.com/ - we have offices in India and Singapore - and do a lot of work for clients around the world - including in India and China.
w window=1&safe=off&c2coff=1&q=ipod&btnG=Search&gl=u s
and here's what it generates in the UK http://www.google.com/search?num=100&hl=en&lr=&new window=1&safe=off&c2coff=1&q=ipod&btnG=Search&gl=u k As you can see - the editorial - or organic - results are the same - but the ads / sponsored links are entirely different.
w window=1&safe=off&c2coff=1&q=stock+broker&btnG=Sea rch&gl=in There is a way around it for those ad-clickers, of course - and that is to proxy through a US IP address - in which case, the visitor will be reported as a US visitor on your weblogs.
And this complaint comes up often here - and is not quite true.
First - Google only shows ads to viewers from a country you've picked for your ads to be shown in. Here's an example of what a search for "iPod" will generate in the US http://www.google.com/search?num=100&hl=en&lr=&ne
So for an ad to be clicked on - the advertiser must ask for it to be shown in that country. i.e. You can't get Indian or Chinese clicks till you advertise there.
The sad truth is also that most advertisers are also silly enough to choose a "global" setting (check these ads appearing in India for US stock brokerages - when it is illegal for Indians to trade freely on US exchanges : http://www.google.com/search?num=100&hl=en&lr=&ne
This is not to say the problem doesn't exist. It does - and it does so where these ad-clickers (not in villages, puhleeese!) in India or China or Eastern Europe are paid by US companies and given proxying software to click on their rivals ads. But most modern clickfraud tracking software (we have our own) can detect this easily.
There is something much harder to detect - impression frauding more than click frauding - where someone first removes their ad from a search term - and then does massive multiple searches on the same term - WITHOUT clicking on ads - hence decreasing the click-through rates of those competitive ads - and then places their own ads on the term to get a higher click-through and rank higher.
But there are ways to detect that too - and we do so.
If it's any consolation- most of the click fraud we detect for our American clients emanate from the US itself. Clickfrauders are equal-opportunity employers, I guess;)
Regards
Mahesh
SmartPricing is a technology introduced by Google last year that enables advertisers to report conversion rates for ads and pay less, much less, for non-converting clicks. It is not perfect and publishers are not happy with it.
Advertisers can also choose sites they wish to advertise on, this stops their ads appearing on MFA or other scam sites.
Clickthrough rate is an awful way to measure the success of an ad campaign. CTR doesn't do anything to help you understand how well your ads relate to sales or visitor action. A better way to do it is to use cost per conversion (sale or action). Measure how much it costs to get a sale and track it on a keyword by keyword basis. A high CPC indicates that fraud, bounces (one page view and done) or technical problems are killing your campaign.
BTW - thre are tools that can help cut down on click fraud substantially. One such tool that has been helpful is AdWatcher.
-- $G
Well, they do own several other direct revenue methods, like Google Earth Plus. And I suppose you could also claim that when they issue new stock, that's a direct sale. But by and large the majority of Google's income is advertising.
But they're certainly evaluating several different methods of making money. Google Video appears to be laying in wait for pay to view content. There's been rumors of Google replicating craigslist style content, although that appears to be more advertising. There was a suggestion that Google was intending to create something akin to paypal. That could bring in some money as well. I think that much of Google's market valuation comes from investors feeling confident that Google has what it takes to adapt and improve for a long time to come, more than any one specific revenue source.
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