back to article Screwgle™ - Google's new ad revenue model

Google's strict code of secrecy calls for extra silence when the subject is AdWords, the epic money-making machine fueling the company's drive towards world domination. But sometimes, the truth slips out. Earlier this month, during Google's all-important quarterly earnings call, a financial analyst outed the company's plans to …

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Pirate

Er..

Isn't the name "Scroogle" already in use for a Firefox add-in that protects your privacy? I believe it's short for something like SCrew gOOGLE.

Works a treat for me!

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Stop

Full Steam Ahead

Well. Is there any stopping the Google Freight Train these days? When you control 90% of Internet ad exposure, you can pretty much do anything you want. Don't forget those Ad Sense publishers who have seen their revenue halve even though traffic to their properties has more than doubled during the past year. Seems everyone is out of pocket these days, and where are the alternatives? The only viable alternatives have already been swallowed up by Google.

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Typical Google

Its funny how perceptions change...so many people hated Microsoft back in the day (of course many still do), but the "we-could-do-no-wrong-Google" company is fast becoming equally despised...this is typical of them taking more money when they truly have no rights to it... Hope someone sues the ass out of them.

I just wish someone would come up with a better search engine and kick them in the nuts.

And off topic, what the hell is up with practically ever piece of software you ever get nowadays defaulting to "woohoo let's install Google or Yahoo toolbar as well"? Winzip, Divx, blah blah everyone is bowing to these guys...

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(Written by Reg staff)

Re: Er..

Ah yes. A swift edit to avoid confusion, then. (-:

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Happy

In before the comment section degenerates into a "no you" exchange

"I just wish someone would come up with a better search engine and kick them in the nuts."

Get me Ayn Rand on the phone!

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Don't like it? Don't use it

No matter what the merits of Google's revenues the fact remains that if a Google-based ad campaign doesn't provide a large enough return for you, then you should stop using it.

Let people use Google ads as it is if it works for them. If your eye is so far off the ball that you don't realise that the amount paid for Google ads isn't justified by the business it brings then whose fault is it really?

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Automatch - seems quite useful

I think Automatch will be helpful to a number of companies. I think it will work even better if they apply a discount to the Automatch results (and only allow a % of budget to go towards Automatch to stop people spending most of their budget via automatch).

A lot of companies who don't have the time to spend days refining their search terms may find this feature helpful - and if they have conversion tracking switched on then they will find some nice new terms to add to their main list.

I think I'll use Automatch myself for short periods to discover successful new keywords. Seems a nice lazy way to improve results.

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I must confess...

...a certain amount of amusement to see advertisers bit by automatic opt-in. Delicious irony. I certainly don't agree with the method, however. But I suspect all this is way over blown.

Long live the memory of Bill Hicks.

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Interesting in the lack of candicy on the part of Google.

The fact that this program has been leaked and Google has yet to be forthcoming on their analyst calls could be considered a violation of Rule FD. (Meaning that some know about the program in some detail while others do not.) Google would be protected under SafeHarbor since any talk of revenues or expectations would be a forward looking statement.

Google may be safe because of Schmidt's comments that it would be too soon to speculate.

I would imagine that Google is quiet because they fear the backlash from this and a loss of advertising revenue.

An advertiser may reduce their budget and risk the loss of some eyes rather than have a higher budget that automatically gets spent.

Either way it is a material event and kudos to the analysts who try and tackle this "sekret" program.

Thumbs up on the analyst and the reporter. Thumbs down on Google.

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@"I just wish someone would come up with a better search engine and kick them in the nuts."

www.cuil.com

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Am I missing something?

I thought you only paid when someone clicked on an ad?

If that's the case, surely an advertiser would be happy if google had worked out a way to get more people to click on your ad. Why should it matter what someone searched for if they still clicked on your ad?

As Kit says, quite a lazy way to find new keywords.

Fair enough, the auto-opt-in is wrong, but the basic idea sounds quite useful.

Or am I missing something here?

Paul

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@Paul

You are missing something - it matters what they searched for, because it may not be relevant to what you sell.

e.g. Your site sells wedding shoes, you bid on "wedding shoes", someone searches for "ballet shoes", google decides it's relevant, shows your ad, they click on it. presto, you just paid for a click which will never convert.

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Re: Am I missing something?

@Paul:

"I thought you only paid when someone clicked on an ad?

If that's the case, surely an advertiser would be happy if google had worked out a way to get more people to click on your ad. Why should it matter what someone searched for if they still clicked on your ad?"

Er... no. Google is the only party who are guaranteed benefit if someone clicks on the ad. The buyer won't be happy if the ad turns out to be irrelevant. The advertiser won't be happy if the buyer isn't happy.

Going back to Google's example (example of what? Shooting yourself in the foot, that's what!):

Old Mr Browser, 86, is looking to buy comfortable footwear to take with him to the retiral home he has secured a room in. So old Mr B. types "slippers" into Google. He trusts that the link is relevant, because The Computer has recommended it. Strangely enough, they don't sell tartan baffies at "Sporty-Sam-Superstars-Super-Sports-Superstore.com", who were advertising their new range of Adidas trainers.

So Sporty Sam Superstar's Super Sports Superstore is down on the deal, old Mr B. is running up a large phone bill clicking on duff ads, and Ebenezer Screwgle is rubbing his hands in glee in the way only Dickensian userers can....

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Anonymous Coward

@paul

"Why should it matter what someone searched for if they still clicked on your ad?"

because you don't want to pay because someone searching for "slip stream" got identified as "slipper" which is "shoe related" and sent to your shop that sells adidas trainers?

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Unused?? budget

How does this actually work then? How do Google know before then end of the day how much of your budget was "unused"? What happens when they use this "unused" budget up early in the period, do they stop your ads showing on the keywords you actually bid on? If they use previous period unused budget then surely you would be more interested that this is spent on the keywords you bid on in case the current budget runs out? Seems to me like they want to really make sure you spend your ENTIRE advertising budget each and everyday. I'm pretty sure that most advertisers bid a little higher for the words than they would expect to pay on average just to make sure that during a rush the fund doesn't run out.

Seems to me a little like those bastards on smegbay who bid on their own items just to see what your limit bid is and then cancel some of said bids to ensure you pay the absolute maximum possible!

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RE: Am I missing something?

The issue is if you get a click through on which you don't actually stock, then money has been spent on your behalf pulling somebody to your site that you can't realistically sell to.

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I have a dream....

One day advertising will be illegal except via a handful of free publications that are only available on request. A hand full of dedicated websites would supply advertisements and consumer reviews for products. There would be no advertising of any kind anywhere else, this includes billboards, sponsored sport and sponsored TV programs. Wouldn't it be wonderful, a world where a product, sport or TV program survived and thrived on it's merits alone? I can imagine a football teams paying to be televised and players earning a decent living wage instead of a kings ransom.

Like I said it is a dream, and I am sure many holes could be poked in my dream, I could likely find quite a few too if thought about it. I guess I am just one of a very small minority that finds all advertising invasive.

As for Google, this is what happens with monopolies. It doesn't have to... Greed is a wholly human trait. One which for some, sorry I actually mean many, is too difficult to resist.

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@Paul

Using the example in the article:

If you sell Adidas shoes, and the automatch triggers 'slippers', then your ad for Adidas shoes comes up, and the searcher clicks it thinking they sell slippers. They go to your site, see you don't sell slippers and leave. Meanwhile you have paid money for that click to your site, and that person was never going to be a customer as he was looking for something else.

That is the way I see it anyway.

On the one hand it could be good for your business. On the other hand it could use up all your adwords revenue. It depends on what the automatch kicks out and what you sell.

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@Paul: yes, you are missing something here

If Google finds a new way to get more people to BUY something from you, yes, you'd be happy. If they just find a way to get them on your site, you're actually quite unhappy: you pay Google for nothing, and you pay the bandwidth for someone who is not a customer, and who probably will be pissed that he was misled here.

As a consequence, I wouldn't want google to slap words that bring people to my site. If I sell bathroom equipment, like bathtub and others, I want people who typed "bathroom bathtub", not people who typed "bathroom" because they wanted to see some nude babes, or because they wanted to buy bathroom towels.

Of course, it actually MAY be beneficial, but then I should be the one to make the call, and it should not be some small print opt-out.

Exactly like Kit Temple above said: it's worth trying to see if some specific keyword combinations work well, before turning it off again. But that's all.

The day when google will get 1% of the sales triggered by their ads, then I'll be all for them to use whatever keywords they want.

As long as mine and their interest differ (they want to bring people to my site, whatever they do there, I want them to get people to buy something from me), it is "no, thank you" and should never be a tiny opt-out option.

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Anonymous Coward

cuil.com

I think you mean cuill.com

Although it's been up and down like a whore's drawers since 9am.

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Cuil (sic)

Oi, Reg. My officemate just told me about www.cuil.com - apparently a new search engine started by some Google ex-pats, launched just this morning.

Where's the El Reg scoop? Why haven't you written anything about this yet? If nothing else, to at least make fun of the horrible name (pronounced 'cool')...

No, you...!

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so far, so cuil

Cuil.com seems to working now. Nice results section. Theough we'll see how long it takes before we get 'paid results' mind...

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google partnership-yahoo publisher earnings halved

Ever since Yahoo partnered with Google, the yahoo publisher earnings have gone down by about 50%.

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Go

At first

I love the irony of advertisers / marketing departments being the ones who are automatically opted in, for once, after decades of automatically opting us in to every type of junk mailing and ad-annoyance known to man.

But then I feel bad for the small-margin businesses who are being financially hit by Google. Damn.

Perhaps Google could limit the automatic opt-in just to larger businesses which have a dedicated marketing department? Especially Apple, they deserve it just for those "I'm a Mac!!" ads. I suggest keywords such as "jam", "juice" and "sauce".

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cuil.com not cuill.com

The web address of this new search engine (apparently something to do with breakaway former Google people) is <www.cuil.com> - however their robot that has been ferreting around the web lately has carried the <cuill.com> URL.

I've just been to the cuil.com frontpage and tried to follow the " About Cuil" and "Your Privacy", and ended up with a jolly 404 page instead that reads...

"Oops! We couldn’t find that page. Please verify that the URL is correct and try again."

...not exactly confidence building is it!

Nevertheless I wish them the best.

The thing is everyone says that Google's position is precarious, as fickle surfers could easily shift over to a newer and better search engine just like that. But making a better search engine is a mammoth task, even just looking at things from the POV of infrastructure - Google has multiple massive datacentres located around the world that are all kept (almost) immaculately in sync with each other. The scale of the Google operation is immense - delivering a page of search results in 0.05 seconds (or whatever) is no mean feat, yet it's what people have come to expect. Building up a new search engine that matches Google's performance is likely possible (just as anything is possible), but are there really enough investors out there who'd be willing to back such a risky venture? Given the looming shadow cast by Google, me thinks not.

The alternative is to try and build up a new search engine by organic growth, just as Google first did - but of course back then Google was offering something new (search that really worked). And again can a new entrant really match the high expectations of users?

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Wake up adnim....

" I can imagine a football teams paying to be televised and players earning a decent living wage instead of a kings ransom.

Like I said it is a dream, and I am sure many holes could be poked in my dream,"

Hole number one: why would a team pay to be on television? Would it be to ensure their sponsor's name get spread around...? No, cos you've banned that. Would it be to encourage people to visit the stadium? No, cos who's likely to pay for a ticket on a rainy day when they have ad-free telly at home. Is it in the hope that the viewers will buy club branded merchandise? A) only works for the top 4 or 5 clubs B)...don't we call this advertising and want to ban it?

Nononononononononono. Football teams must be paid for being on telly -- they shouldn't have to pay.

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Coat

@At first

And so for now and evermore people searching to buy a Mac should be taken to a site promoting the benefits of anoraks...

Mine's the anorak duh!

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Linux

cuil

bah... no hits for "eie 10", and it hangs on just 3 results and an ad when I remoe the quotes. Bogus.

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Sam

@ Mr Lettice

Don't mention it.

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You make the budget, they help you spend it.

You make the budget, they help you spend it.

That's the whole point of the budget, it's what you are prepared to spend to advertise. It's not greed, it's what every profit driven enterprise wants to do, spend the client's budget. It's up to both of them to make sure it's spent wisely.

Google looks at unspent budget as lost revenue, advertisers look at unspent budget as loss of potential exposure/transactions.

I don't agree with automatic opt-in, but it hasn't been proven that's even happening now.

I can see a clear benefit in using the feature, if you don't want to spend the time to manage adwords, or don't know how, it's a great way to increase your impressions without increasing your BUDGET (It could increase your spend, but it's limited to the budget you set).

Google's rank system should limit the matches to impressions which matter most, so they get paid for those ads and they increase the value and market for relivent ads.

That's the part of Auto-match that's not being discussed. If they can get more people competing for ads via Auto-match, then they can expect the price of the ads to increase due to competition.

If done well, then advertisers get more exposure to potential clients with less effort to find them, and Google gets more revenue per ad and get's the maximize the spend per client. Done poorly, they will see advertisers reduce their budgets AND their spend which will really be a blow to the bottom line. Given the results of that kind of failure, I'd expect they will get it right and most folks will profit.

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@AC:wake up adnim

I dislike football intensely, I can think of a few things more boring and tedious, but not many. Golf, tennis, darts and snooker come to mind. I would need paying to watch any of them, so I don't care. Of course everyone who loves football should suffer just so that I don't have to see any or hear about it.

And I no I shan't wake up, I prefer it it in my deluded dreamy utopia, void of advertising, void of greed and void of footballer egos.

Like I said, I didn't think about it, and will continue not to do so ;-)

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Anonymous Coward

RE; Auto Match

I can see this as a potentially good thing as well, though.

In the Addidas example it would be absurd for Google to also show your advert when people searched for slippers, but it would be beneficial if they searched for trainers, sneakers, running shoes, spotswear etc. etc.

In the long run it is best for everyone if advertisers spend their entire budget on relevant, targeted adds.

The more advertisers spend the more money Google makes - good for Google

The more people click on relevant adverts the more exposure the advertiser gets - good for the advertiser

The more relevant the adds presented when someone is searching to buy something the quicker and easier their on-line purchasing experience will be - good for the buyer

However the really big question is whether Google will be able to provide value for money - ultimately if they don't advertisers will spend elsewhere and then the whole Google business plan falls down.

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@Lee

"The more relevant the adds presented when someone is searching to buy something the quicker and easier their on-line purchasing experience will be - good for the buyer"

Barf. Advertising is never to the benefit of the buyer, its there to hoodwink them. My quickk and easy online purchasing experience will be provided by the relevancy of the search results allowing me to pick the best online store, not the one that paid the most.

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Black Helicopters

Do no evil?

Changing a contract from underneath a client certainly violates Google's own "do no evil" directive. If doing this is legal, it's legal only by the kind of semantic trickery that gives the law profession a bad reputation, not by anything a human being would consider "fair."

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Tsk tsk, Metz

Once again, writing about that which you know nothing about.

HOLY CRAP! How can a beta testing program possibly "opt in" all of its participants? Scandalous!

Pay attention, Metz: Get an AdWords account and manage it for a few months until you understand how it works, THEN you may ... MAY ... be qualified to comment on these issues. Without some direct experience, your Google-hating just makes you sound ignorant.

And I'm not being rude ... this is basic common sense. Stop slandering Google until you have some authority beyond having written a few slanderous articles about them.

And, people ... searchers don't automatically click on every ad they see ... only the ones that seem to match what they are searching for. So, for example, if you DON't sell "slippers", then you should already have the "-slipper" negative term in your campaigns. And if your ad shows for a term you did not bid on, then about the only way someone would click on it would be if it were not targeted tightly enough, i.e. "We sell every kind of footwear" instead of the ("better") "We sell Adidas sneakers". See how it works? Someone searching for "slippers" isn't likely to cost you a dime by clicking on your "We sell Adidas sneakers" ad, unless they decide they want to check out your Adidas sneakers. Write 'good" ads, include appropriate negative terms and stay the hell away from "Content" matching and you'll be just fine.

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@ Lee

>>>In the Addidas example it would be absurd for Google to also show your advert when people searched for slippers, but it would be beneficial if they searched for trainers, sneakers, running shoes, spotswear etc. etc.

The flaw in your logic is that you, as an advertiser, will most likely already be advertising on keywords like "trainers", "sneakers", "running shoes" and "sportswear" specifically. (otherwise, shame on you!) As a result, automatch is likely to result in your ad being displayed on only tangentially related keywords, which aren't terribly likely to result in increased sales, but will certainly result in increased ad spend.

The other side of this is that I know some advertisers deliberately set a maximum budget, so they don't have to manage that side at all, and can focus entirely on keyword management, rather than overall campaign-level management. If Google defaults automatch to be enabled, there will be a whole bunch of advertisers getting hosed until they realize what's happening.

So Google, offer the service, but don't go defaulting it to ON - that's just slimy...

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Boffin

@AC

"I just wish someone would come up with a better search engine and kick them in the nuts."

They did. Four of the people who wrote the core of google's search engine left to form cuil (http://www.cuil.com) which started up about 24 hours ago. Cuil has 120B web pages indexed vs googles 40B. As usual, The Register missed to boat on Cuil. Maybe by next week The Register will actually notice them and announce it.

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Costs rise for everyone...

Even if you opt out of this you'll end up paying a lot more for your keywords given that there will be lots more adverts appearing from those who haven't opted out.

Google gets to empty the accounts of those not paying attention - and in so doing raises the cost for everyone else.

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@Lee

Relevant ads = more expensive ads = more expensive goods = The buyer looses.

It's all about making more money out of Joe Public, who don't want the ads in the first place.

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JC

Makes perfect sense

I don't agree with their policy to auto-opt-in advertisers, but the model seems fine otherwise.

COnsider this scenario: You sell Adidas shoes. The potential customer Google searches for slippers. Your ad appears and it reads "Adidas Shoes".

IF the customer wasn't interested in buying Adidas shoes they'd have to be daft to click on that link among the gazillions of hits that Google produces. It is but one link among many many links the customer won't click on if they have no interest in the text it displays.

Thus, the only issue here is that Goggle not insert dynamic search terms into your ads, that they only display something you do sell.

As someone else already mentioned, you're free not to advertise with Google, and as a customer you are free not to click on any of the ad links. Personally, I never do click on the ad links knowing that at a minimum this advertising is adding an overhead to the final price. If it were some rare item I couldn't find otherwise it might be a different story but look at the context - that I'm doing a Google search so there's that automated way to find the product elsewhere most of the time at a lower price.

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@Tim J

yes, users are fickle, but in the way that if something works they tend to stick with it. the memory of solving a problem makes them happy and they carry on using it. users don't just stop using their favourite search engine replacing it for another...

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So what

Advertising, via any medium, has never been easy. Whether you're putting up bill boards, taking newspaper ads or whatever, there has always been a need to figure out how much you're going to spend and what actual advertising you will present to the population.

If you're a mom-n-pop shoe store then you're insane if you take a google ad. Most of your clicks will be from far away places that you can't serve. It only makes sense to advertise to people that you can sell to.

If you live in a city with one major newspaper, then expect it to cost a lot to place a huge ad on the front page or next to the page 3 girl. Same deal with Google: it costs big money to place ads that get lots of hits.

Nothing has really changed, except that many people have excessive expectations of the internet. Too many people think that all they need is a Google ad and the customers will come rolling in. Sorry people, there is no magic. You need to understand your market and what sorts of advertising will work for them.

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The future's not bright...

Isn't spending on ads usually the first thing to be cut when a recession comes? So, those who make the biggest proportion of their income through advertising will be amongst the first casualties in time of global economic meltdown.

Google must be bricking it at the moment.

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Flame

FFS Cuil

"As usual, The Register missed to boat on Cuil. Maybe by next week The Register will actually notice them and announce it."

Yes, because the register should always announce when a new search engine fueled entirely by hot air, plugs and shameless self-promotion (I can't turn around without seeing them mentioned today, a side-effect of the management ancestry I guess) launches. You do know that a REVOLUTIONARY NEW SEARCH ENGINE launches daily, no?

FFS, for most of the day they were serving "No results found for blah blah" because they hadn't worked out that when their search servers fell over under load, "Umm, we're really busy" would be a better message than "we're shit at search". On the day they were running around PRing themselves to Hell.

Muppets.

PS white search box (that doesn't have a cursor in by default) on a black background? Oooooooooooooooooooooooooh. I prefer the at-least-we're-honest godawful green and cyan colour scheme at tripleme.com.

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Say no more

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https://ssl.scroogle.org/

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Cuil's not

Results are even less relevant than those from Microsoft's dreadful search engine.

love it or loathe it, Google still returns the best search results. If you don't like the ads, just use Firefox and turn them off.

For the record, I recently stopped my google ad account - as a small business, I have to pay more for a good position in the 'auction' than my larger competitors. My minimum bid to be displayed rose from 20p to over £2.

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Boycott Google

Google long ago changed from being a search engine to being an advertising medium. When my brother needed a hotel near my home in London he could not find the one he had in mind on Google because of the plethora of irrelevant paid-for search results. Google is now officially a nuisance.

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What's all this then?

Reg readers showing sympathy for advertisers??!?

Never thought I'd see the day.....

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Ad revenue held on account

I have a few blogs where I earn a few cents when visitors click on Google ads. My Google Ad revenue held on account is up to about $25. Google only issues a cheque once you reach $100. At this rate, it'll take me about 3 to 4 more years to reach $100. I have friends in the same situation. A back-of-the-envelope estimate has Google holding a great deal of money: probably many millions or tens of millions of bloggers and website owners, times some amount under $100 equals something close to a billion dollars held on account by Google. And they don't pay any interest.

How about cheque-on-demand?

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Coat

Surplus budget

Let me know if you are afflicted, I can help!

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