If you purchase Adwords, the PBS article “Google Goes Las Vegas” may be the most important read of the year. “Just in case,” I archived the article here.
Google does admit there are forces that can drive an advertiser’s listing up or down, making them appear on the first page of results or push them down to second and subsequent pages. Both effects, it is strongly implied, are in the control of the advertiser. Advertisers can move higher in AdWord ranking by paying more money for the key words they have chosen. But they can also move higher — or lower — based on the quality and desirability of the ad, itself.
All this time, people buying AdWords thought they were dealing in a hyper-efficient marketplaces. You pay more; you get better placement.
But an efficient market is not in Google’s best interest.
I believe the Google Engineers are brilliant and have factored advertiser behavior patterns into the Adsense placement algorithm.
The “desirability” (and therefore placement) of an AdWord ad could diminish if the algorithm determines that the particular advertiser is willing to pay more. Put another way:
The Google AdWords algorithm tries to do many things and one of those is to encourage advertisers to pay more for words. By modifying something that in turn modifies the results, Google is effectively encouraging advertisers to change their behavior.
If this is true, I am in awe of Google’s brilliance.
1. Consider how effectively Google could manage CTRs across the content network given their wealth of surfer behavioral data. Even if they’re not already doing it, the potential for abuse is staggering.
2. Google confidentiality clause (#7 TOS) states:
You agree not to disclose . . . click-through rates or other statistics relating to Site performance in the Program provided to You by Google
3. Their Adsense and Search Algorithm are secret.
4. Some Google employees have access to all your account and behavior information: CTRs, Keywords Bids, total spend . . . everything.
5. Google encourages their employees to have adsense accounts.
If you’re buying Adwords, it’s worse than:
“Wow! So you and I are playing poker but you get to see my cards?”
it’s more like:
“You and I are playing a game like poker, you won’t tell me all the rules, and you get to see my cards.”
The “fair” way to do it would be full disclosure, complete transparency, a complete outline of the algorithms and the elimination of the confidentiality clause.
But you know what? It’s not Google’s Job to be “fair.” It’s Google’s job to make money.
As a shareholder and as a publisher/spammer, I want Google to charge as much as possible per click.
So keep gouging advertisers. Keep the adwords market inefficient and inflated. And keep the curtain of secrecy.
3 Responses to “Are we Closer to Solving the Adsense Mystery?”
Well this isn’t quite a mistery, but it is surprising. I started comparing Google to Microsoft the day they were caught cloaking their own pages.
I always thought that there are some employees using the info they have to make good bucks for themselves, but now when we know that Google lets employees have accounts the sh*t has really hit the fan! Adwords buyers are where Google gets its billions from and they won’t be happy (just see the WMW thread)!
Actually what I worry about is Adsense, considering that’s my money they might be taking (if they are allowed to have Adsense accounts). Google employees with so much knowledge having commercial sites scares me to death!
Hi Guys
I dont think it is as sinister as everyone thinks, they will do whatever they can to ensure that they get the highest return per 1000 impressions. Its just that most people equate efficient market with the concept that if I bid higher I will be at the top. This is one of the factors, but the most important factor is what is their total return for a given number of impressions.
After having spent about 2 years spending $2-5k per month to promote my recently sold business I have a reasonable experience with how this works.
If your ad copy is way more compelling than someone elses and produces more click throughs they will rank you higher if the aggregate value of those click throughs is higher than someone else with a lower click through rate but a higher value.
ie for any given 1000 impressions 10% CTR at $1 per click = $100 rev for them and is worth more to them than 1% click through at $9 per click = $90 and they will position you in the spot that gets more clicks in that order of priority.
The best way to pay less per click is to constantly spend time optimising your ad copy by playing beat the winning copy game (ie run two adds for a few days, keep the winner and rewrite the looser to try to improve on the winner keep doing this for a few months and you have good ctr), get rid of non performing keywords that are dragging your total campaign CTR down and try to get groups of words that are tightly clustered that you can run adcopy that is very compelling just for that group and other groups have their compelling copy.
In my experience you have 24 hrs or less (depending on the impressions for those keywords) to prove you are profitable to them or they wipe you off the front screen (in a competitive market), I have also found that you need to start off with the sort of bids they tell you to, otherwise you dont get a shot at lowering the click through cost because you will never get the traffic required to spend the time optimising the adcopy.
What does annoy me is when they wont start running an ad for a keyword unless you bid a minimum amount ie not the standard lowest 5c or whatever it is now days, I have recently been forced to bid 60c-$1 per keyword just to get an add to run.
Anyway, as long as you equate efficient market with the combination that produces the best results for them you are on the right track
Appreciate an invitation to the SEO private forum, Im a geek with no technical skills reestablishing myself after selling a business, I might be able to add some value from a business experience perspective.
Thanks Mike
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This concept is along the same lines as, “it’s my casino. Come on in and play, but you’re gonna do it my way or the highway.” We all know the house always stacks the odds in their favor. This is no different. Perhaps BH SEO is our “ace in the hole”.