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?"
Do we need an ethical framework to direct companies to make such algorithms open source?
Correct me if I'm mistaken, but I keep on hearing that "open source" is about freedom. Since when is forcing someone to behave in a certain manner considered "freedom"?
Google can do what google wants to do as long as it's within the limits of the law, you don't like it? Start your own damn company that is more ethical.
Monstar L
Google IMO has the best advert service because it's unintrusive and they're ads you want to see because they're context sensitive. To me that makes it more likely you'll be interested in what the ad's selling and you'll want to get it more because the ad doesn't piss you off. Because of this, google can charge whatever they like and most people will pay it.
~HTP~ Hug that tux
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"?
I skimmed this and thought, "Hmm, this looks like the kind of text that would be generated by a script." A couple of minutes of searching (via Google, ironically enough) turned up the Automatic Complaint Generator.
Sigh. Remember when trolling was an art form, when people would put time, effort, and (dare I say it?) heart into inciting flame wars, even when posting as Anonymous Cowards. The kids these days are just phoning it in, and that saddens this oldtimer's heart.
First of all if he gets 15000 @ 0.15 clicks per day he is paying $1500,- a day in advertising that is $547.500 per year in advertising alone. His friend must be an internet miljonair! I somehow doubt that such a large operation would execute the test as described in the article. I think the figures are a bit inflated to make it a better story. Furthermore I use Google Adwords for my company (http://www.tiouw.com/). I spend around $5000 a year on Google. As everyone who has ever worked with AdWords knows is that when you change your ad, it changes your click through rate. Changing URL's, text, anything has a direct result. It takes some time before the system gets used to the changes and then you are back on track. I expect that if the company in the article would have run for some time with the new settings it would generate more and more hits. Finally, tests have shown that people do not click on the no.1 position, but prefer no. 2 or 3.
On the contrary, Cringley has utterly misinterpreted these results and they actually prove that you should not do these tests.
If Google does anything with AdWords the obvious thing to do is examine the BIDS for AdWords that it receives and figure out a VALUE for each AdWord.
By setting up a rival site and BIDDING AGAINST HIMSELF this guy drove up the VALUE of his AdWords.
How is this not obvious? Google just coded the free market.
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.