Slashdot Mirror
A Closer Look at Google Adwords
zaphle writes "This article describes an interesting experiment with the Google Adwords service; in an effort to fine-tune the price per word, a mirror site was set up, paying a different price per word. I turns out the second site had to pay more in order to reach a similar click-through rate. My questions to the slashdot community: are organizations like Google redefining the law of demand and answer? To what extent does this imply a competitive advantage for larger companies? Do we need an ethical framework to direct companies to make such algorithms open source?"
Google is looking for the price where marginal revenue equals marginal cost....because google is becoming monopoly on search info, make profit, regardless of yahoo and msn's stats.
Adwords does placement on more than just the cost-per-click. This fact is spelled out all over their website, try something like https://adwords.google.com/support/bin/answer.py?a nswer=10215&topic=114 :
"We want to ensure that your keywords get a fair chance to run and that we do all we can to properly gauge their performance. We use a Quality Score to do this. Each keyword is given a Quality Score based on data specific to your account, including your keyword's clickthrough rate (CTR), relevance of ad text, historical keyword performance, the quality of your ad's landing page, and other relevancy factors.
Quality Score = keyword's CTR + relevance of your ad text + historical keyword performance + other relevancy factors
Your keyword's Quality Score and maximum CPC (at the keyword or Ad Group level) determine your ad's rank on Google search and content sites. (For the top positions above Google search results, however, we use your keyword's actual CPC.) Remember that improving the relevance of your ad text and keywords will increase your keyword's Quality Score and reduce the price you pay when someone clicks on your ad."
If you start a new campaign, it is no wonder that Google will not be able to give you the same placement as with a campaign that has run for years. It's new, it's unknown, the visitors / clicks are unknown, heck - even the cost-per-click value is jumping around. It looks weird to the system, it gets placed lower or even removed from some of the results.
What happens in the end: those who target properly (right keywords) and have a good ad copy get lots of clicks, those clicks end up making your placement better (while paying the same amount of money). The users are voting for your ad (whether they buy or not is partially unknown to Google -- "partially" because you can track it through Google if you want to).
A new factor coming into play is the landing page - the page that the ad takes you to. According to their blog ( http://adwords.blogspot.com/ ) they are now evaluating the quality of the landing page. So if you search for "children" and click on the "Get children at ebay" ad, and the page they link to does not offer "children", then sooner or later (heh, hard to guess, it depends on the amount of automatisation behind the checks) Google will either remove the ad or move it down, while the advertiser is still paying the same amount per click.
Is that evil? Is that being greedy? or is that just watching out for the "user experience"?
The duplicate content filter is for search results. It IS against Googles TOS to submit multiple ad units to the same keyword with the same site behind it, however if you have two sites you can gladly compete for adwords placement with yourself :-)
The conclusion was that you don't get what you pay for. If you pay 0.10 you do about as well as if you pay 1.00. But if you pay 1.00 and then reduce it to 0.40, you do far worse then if you had always payed 0.10.
If you have a problem with Google, follow them up with your local Trading Standards, or take them to the Small Claims Court.
In the UK, this become increasingly easier to do - http://tradingstandards.gov.uk/ (free, quick and easy) and http://www.hmcourts-service.gov.uk/ (£30 for a small claim which you will get back if you win).
If Google won't tell you what they cancelled your payment, then I am sure that they are legally required to give you your money.
This is not the whole story! That Sept 22 article was old. People should read the follow up articles from October before comment?
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http://www.pbs.org/cringely/pulpit/pulpit20051006
http://www.pbs.org/cringely/pulpit/pulpit20051013
Have you ever seen a "refund" on your AdWords account due to some AdSense advertiser generating "invalid clicks" for your ad?
Yes, I have. As per Google's documentation, you can click on the "My Account" tab and look for "Service Adjustment" in your billing summary. I have received some small refunds.