Google likes its secrets. But there's one secret it likes more than any other. We don't mean Goobuntu. Or the GDrive. Or those Juniper-killing GRouters. We mean the secret that makes the millions, the secret at the heart of the Mountain View money machine. It's not much of a secret, really. It's right there for all to see. But …
A Better Way ?
Ok so google is only in it for the money, is there a better search engine that serves up comparable links ?
Peeling back the onion
Yup, this is just what I've come to expect from Google: manipulation and misdirection. Can't wait to see what might be revealed if someone sues them and gets to ferret around in their algorithms during the legal "discovery" process....
You didn't reveal anything. heres how it works...
A little less than a year ago, Google jacked the system (again). It used to be that, for the most part, when multiple keywords in your account match the query, the one that most closely matched the query (by number of characters) would be put in to auction. Google changed that so the keyword with the highest rank would go in to auction instead. So, if you bid $10 on 'spyware' and $1 on 'spyware software', and some types 'best spyware software' (exact matches are supposed to work as expected), given quality scores are roughly the same, the ad with the highest rank (most likely spyware) will go to auction. Even though you explicitly wanted to pay less for those terms, Google bilked you in to paying more! I run a very large search account and know that most people (even in Google) don’t know about this. You can take steps to combat this with good account structure, careful monitoring and negative keywords matching, but it’s not easy.
This might explain ...
... why the anti-phorm adwords campaign always appeared higher than the phorm/BT axis equivalent.
Google hates phorm and will use the 'unknown' factor to bugger it. Certainly the decency campaigners couldn't outbid the data-pimping coalition.
When will this disgraceful idea finally die?
Boffin : People are starting to wise-up.
I never click on ads.
The Evil Empire
Everyone loves to knock Microsoft, but Google is the real evildoer. I'm sick of them, their 30 year cookies and their quest for universal domination.
The article comes across as very biased in two ways: google are defaulted to evil, while us ad spenders are relegated to stupid by-standers. I setup google ads awhile back and it was fairly clear that your position was dictated by your click through rate and other factors. Of course it would be - this is not a democracy - it's a business. Relationships with previous good clients are a normal,ethical and important part of business.
btw, is it possible to limit the number of responses any single user can make to just one response?
How about from the searchers' point of view?
If I want to find a 'left handed widget spanner', isn't it better that I get served a larger variety of adverts matched to my search, if I perform the search several times?
Wouldn't that make it more likely that I'd find a company selling what I wanted than otherwise?
Yes, it costs advertisers more, but at least it means that advertisers that are low on the payment scale get some advertising space, that they wouldn't otherwise, or am I not understanding the system?
What ads? Even if I wasn't using Adblock, I wouldn't click on them.
Are there really people who do?
Good for the user
The idea that the same ad doesn't keep appearing sounds better for the user of the site...the more variation in the ad's the more likely you are to read them...maybe even click (though I'm still not sure why anyone does that???)
I know I ignore all ad's i've seen before.
Me either. And I've never been in a situation where it would be tempting or necessary. So who *are* these people who are making Google millions of dollars?
Oh by the way, @ the article's author: I think you have your X axis and Y axis the wrong way around. The horizontal axis, X, appears to be showing position, not impressions. It's hard to tell because the thing is so small it's nearly illegible.
I'm with Moss
I've never really understood how these ad's work. No one I know ever actually clicks on them, but clearly someone does, otherwise google wouldn't make so much money out of them.
Evil Bill because google ain't much better
Nice consumer jouranlism, but ...
Yes, Google are not informing their customers. If you believe in the sacred rights of the customer then this is sacrilege.
One of the points made strikes me as a bit odd though - "If you do the same search ten times, you get ten different sets of ads." This is pretty much what I would want as an advertiser. I don't my ad to become part of the furniture and I don't want to never be seen because I rank fourth, no matter what fiddled the rankings.
All very well but
I have never ever clicked on an Ad. And now I can't even see them (gmail text ad included). Am I the only one who thinks and company relying on Internet advertising revenue is doomed?
If the EU goes at Microsoft they should go at this
Level playing fields and all that ... wait?? Google and level playing fields??
All hail our do no harm overlords!!
Mine's the one with the cheque book in the pocket??
Also Googles Reverse Billing...
Rather than simply billing for the number of ads served during the month, Google ask you how much you wish to pay and then massage the prices to make sure you pretty much paid that amount monthly. We had one month where we only had 1 single click. The price of that click- €49.99.
We suspended our use of adwords after that.
I've always thought that ISPs are missing out on a potential goldmine by not offering an advert-blocking service -- for a nominal fee, of course. Nobody likes advertisements, after all, otherwise VCRs wouldn't have fast-forward buttons; and it's riduculously easy to do, if you run a transparent proxy. No software required on the client end either, so it Just Works with all browsers and OSes. You request a page, and up it comes -- minus advertisements.
Heck, I'd gladly pay an extra £15 a month for advert-blocking -- if I hadn't already set up the exact same service myself on my own equipment, so not costing me anything.
You only pay for the clicks you get. If you believe a single click against your keyword is worth $10 then that's up to you. It's irrelevant if the ad is shown on every search or ever 1000th search - you only care about and pay for a click.
Now it may be your brand suffers because Dave's DIY is weighted against compared to B&Q. But again, that doesn't matter. You get fewer customers and fewer clicks and less to pay. That doesn't mean you should up your ad budget: a click is still only worth a set among depending on how much profit you make per click. And if you DO try upping it to $100 a click, you should have the intelligence to realise pretty quickly that you're not getting any more traffic or sales so it isn't worth it.
Nothing to see here ....
I thought it was always clear that the more successful your ads were at getting clicks, the cheaper you could place them, hence the practice of paying a lot per ad at the start of a campaign and then as you wittled down the ads to the most successful version you could lower the bid too.
It's not as much evil as subsidising your searches. That much infrastructure on that scale doesn't come for free, so any time you're trying to work out why you're getting something for free, assume you're the product, not the customer.
If you don't like Google's business practices, don't use their search. That'll learn 'em.
@A J Stiles
Nice idea, but not workable. Where would your £15 go? Since the ads are likely supporting the websites you're visiting then the money should really go to them, but how is your ISP going to track the hundreds of micropayments in a cost-effective manner?...Not going to happen sadly.
Back on track - the AdWords thing is still a mystery to me, i've tried to set it up a couple of times but the calculations between per-click and per-day payments coupled with this auction business means putting realistic figures on your prices (i.e. I'm not paying £100 a click or prepared to pay £1000 a day) means no show 90% of the time for your adverts.
Paris - because I'm as confused as she normally is.
Does anyone look at the first few offerings from a Google search or the adverts at the right? I always ignore them.
What always annoys me about Google is that if I am trying to find Bloggs Ltd maker of widgets then they are very unlikely to link to their web page but will link to dozens of companies offering to sell me Bloggs widgets. It's even worse when you include a place name as you are offered lists of companies providing just about every trade and service in the smallest hamlet that only has a couple of houses.
People pay attention to paid ads?
Why? If it comes up in a special box, I make a point of ignoring it, because it's obviously trying too hard - it can't be that good. Like the other anon coward, I would never click anything that has obviously been `bumped up` for money. The only people who are responsible for this kind of cr*p are the paytard type and their ilk... Oh and there are several other search engines out there. They may not give you the 23 billion hits google does, but so what? Look a little harder...
I select traders and retailers and services so on based on variables such as cost, reliability, reputation, range, and whether they have what I want for the best price. Just because some of them have a box and flashing lights around their text/ad doesn't make any difference to me, and the only people who it does work for are quite clearly a bit dim. I also realise that G**gle is still just a search engine. Believe it or not, there is a multitude of other avenues through which to discover the world and what it has to offer. No really, it's true. You dont have to G**gle everything.
Re: So what?
@A J Stiles writes "Nobody likes advertisements, after all"
Actually, I much prefer the type of Web where decent content is funded by adverts. I don't find adverts on Web pages particularly annoying in the main, and have no problem with the sites I use trying to make a decent living.
... and no, I don't run an ad-funded site, just in case you were wondering.
More reverse billing
As experienced by Andrew Moore I too noticed my adwords campaigns charging near as dammit to the maximum I selected every month - thats when you realise its got nothing to do with your advertising spend & more to do with digital pocket swelling.
I too bailed out - Adwords sounds good but the reality is somewhat different (dont even get me started on the potential for click fraud)
The number of impressions an ad gets is governed by 3 things:
1. The type of targeting and match type.
2. The inventory of search terms to display against given (1).
3. The daily budget of the campaign the ad is in. If Google 'gave' my small business ad as many impressions as an advertiser like Ebay gets, my bill for a single day would bankrupt me and my website would probably go down from all the traffic.
The budget part is the one you are missing. Google forecast the cost per click for a particular campaign and the average clickthrough rate. Once they have these numbers it's pretty easy for them to calculate the amount of impressions they need to serve so the customer spends their budget. If they went vastly over this number the customer would overspend.
The AdWords system does contain some opacity but not really around impressions. If you up your budget and you are advertising on keywords with a large inventory you can have more impressions. Obviously a larger company with more spend can buy more billboards, radio spots or newspaper ads, it's the same online. The difference with online advertising is that it is possible for the small advertiser to pay the same price as the large one for EACH spot.
And for those who all say they don't know anyone who clicks on an ad I can tell you that approximately 25% of searches on commercially interesting query terms result in an ad click.
Disclosure: I used to work for Google. I now run my own company which does search marketing for clients with Google, Microsoft and Yahoo! among other things.
Does Adwords reply to the main search results or the advert lines at the top and the rigthtframe? The nature of Google’s search results often seems rather odd to me; I always understood that results were primarily selected by the number of links pointing to them, however when searching for a given item or product the primary returns are often ebay items, which I can’t imagine many other sites would contain links to due to their temporary nature (ok, there are shites like ciao and dooyoo which just seem to act as link farms and would).
Personally, I try to use CUIL for searches nowdays, it seems to be improving well and has several things going for it. Shame it doesn’t have a “pages from the uk” function, but then Google’s one doesn’t work too great anyway,
I had too many suspicious happenings when I tried Adwords. The one that sticks in my mind is the fact that when I had one search term that got the majority of clicks, suddenly the minimum bid on that item went up by a factor of six! "You can up your minimum bid or never see your search term again". I stopped using adwords soon after that.
No, I just dont get this either.
Why does anyone bother to buy stuff via Adwords? A paid placed ad like this says nothing about the quality of the the product, merely the foolishness of their marketing people.
It reminds me of the (UK) National Lottery, which looks a lot like a tax on people who aren't good at maths and didnt listen when they were taught probability theory.
I ignore advertising, and assume its all lies. Does the Register attract a higher proportion of people who think like this? Or is the population in general now numbed to advertising and the advertisers are just wasting their money?
I would like to hear from someone who thinks that their Google Adwords expenditure is money well spent (drives increased revenue) rather than merely "Google are the near-monopoly provider, and the dumb client wanted to throw money at teh interwebs"
Or is this just another hype bubble waiting to burst....?
just build a site decently and link to it to some relevant pages let time take its course and you should have your site turning up on the first page within a month or so !
I click on links depending on the descrition beneath And Very Rarley do i click on Ads
Recently withdrew my AdWords
After experimenting with them for around 6 months, albeit in economy mode, i've decided that they are not worth the cost at all.
While I got plenty of clicks, these clicks simply didn't go into conversions - not a single one. I got a lot more conversions via other, free advertising methods. Hence, it makes no sense for me to continue with the system.
The findings in the article also seem to confirm my suspicions about the system. Secrecy and ignorance is indeed their biggest tool.
Here we go again
Do we really have to go through the cycle of someone pointing out Googles adWords system isn't transparent, waiting a month and then doing it again forever?
I don't care if Googles adWords system is transparent, as a website owner I want to get as many interested visitors as possible for my money, as a browser I want adverts to be relevant and helpful.
If Google is showing one ad more than another they are doing it because it paid beter and/or the click through rate is better. The fact that advertisers don't understand adWords is their problem, if they can't understand it or afford the expense of understaninding don't use the service.
@I never click on ads.
I don't either unless its a company I dont like...
"CompanyX" Sponsored Link *(click here if I dislike them am not a customer/it wont cost me in the long run)
"CompanyY" Sponsored Link
"CompanyX" Normal Result *(click here normally to access the searched for page)
I hate clicking a sponsored link if Im buying from that company I know that the incured cost is passed to me! generally I look at the normal results first..
Interestingly the web filter at work blocks sponsored links but not normal ones!
@Moss Icely Spaceport and his ilk.
So, let me understand the mentality of people who boast and feel morally superior because they NEVER click an ad.
Think it over for ten seconds and ask yourself how Google (Yahoo!, etc, etc) could afford to run their server farms without any revenue. Yes. That's it. You're getting there. Clever boy. No ads, no search engine. You simply don't get it, do you? Who SHOULD be paying for it? Consider yourselves *lucky* that someone, somewhere IS clicking, or you'd have no search engines. Yes, "lucky", not "morally superior". Cretins.
Name me someone offering ad free searching and I formally predict that either they will go out of business or they will charge for advertising in a while.
To all you people who don't click on ads...
...will you stop being such smug gits and shut up? Since its self-evident (from Google's enormous revenues) that millions of people can and do use search advertising your pointless posturing is muddying the debate. So you don't click ads. Well done. Have a cookie.
Suffice to say, Google's secrecy is the key to their success, and is also the key to the success of the enormous number of search agencies that have grown up around the ubiquity of Google and have a vested interest in Google being secret enough to make it worth paying agencies. Unfortunately (smug gits button it), search advertising DOES work, and certainly in my last role (for an online retailer), was by far the most effective acquisition tool, to the extent that an awful lot of companies now have a lot of their advertising eggs in one Google-labelled basket, with the attendant risks (like when Google, "tweaks" its algorithms, or decides not to protect brand terms anymore), than can blow your sales forecasts right out of the water.
@All very well but
I'm with you, I don't think it's a stable business model. Granted I can't see any other way Google could stay afloat if they didn't, but on the other hand I can't actually see the Ad's making enough money compared to how much Google is supposed to be worth including assets, capital and such like.
Same goes for Facebook, could this be the year where companies like that end up facing financial difficulties and end up going to the wall. Most of the time I think these companies stay afloat due to creative accounting, which seems to be rife now.
Maybe I'm missing something really obvious...
Why hasn't anyone reported Google to a trading standards bureau or sued them for fraud?
Google is evil...
blah blah blah. They're also a damn good search engine which helps millions every day, and I've used adwords and it generated good business. Rather that than banner ads, popups etc.
Can't The Register find something else to bleat on about, these stories are all pretty much the same but seem to have little point to them.
return on investment
It's clear from the nature of the comments that a lot of the contributors here have never been at the business end of a well built online ad campaign. Sophisticated advertisers don't pour massive amounts of cash into channels that don't deliver a return and the idea that online advertising is somehow less of an exact science than sticking an ad in a newspaper and sitting by the phone is laughable.
Google take in over $5 billion a quarter with a profit margin of 35% or so and are sitting on a cash war chest of over $20 billion. Yes they are a powerful company but they got there because their core product, online ads, is very competitive and has been proven to work in many industries.
In light of their success and growth it is laughable to wonder if online advertising works or if they will go out of business, these are absurd questions to ask.
Budget explains the observed effect
From the 4th paragraph of the article:
> Even among seasoned AdWords advertisers, the assumption is that you're
> bidding for the right to post an ad every time someone searches on your
> keyword. Or at least most of the time.
[snip three pages based on this assumption]
That simply isn't true. As Greg Kerr (above) points out, this mysterious "factor X" that you allege to be some sort of nasty Google conspiracy as actually just the ratio (winning auction price * number of matching searches per month * click-through rate / specified monthly budget).
Many / most advertisers choose to set a relatively high bid and to constrain impressions with a budget. It's certainly what I did the one time I used AdWords. They will then only "enter the auction" for some smallish proportion of searches.
"Name me someone offering ad free searching and I formally predict that either they will go out of business or they will charge for advertising in a while."
Google with no ads, no ads on any pages, a discreet donate button on the home pages and results direct from Google to your desktop with no adverts. Been around for quite a while now
Ads on Google?
Funny, I've never noticed any. And I don't click on sponsored links either.
@ Andy ORourke
Donate = not free, but yes, you're right that they are not charging for advertising.
Also, scroogle is happy to gain from all the money Google has spent on servers, search algorithms, slaries etc, without returning a penny to them. Parasitic behaviour, nothing more.
More generally, all the anti-business sentiment on here amazes me, because, when it comes down to it, it's business that pays us all (even you civil servants via taxes) and provides us with everything we buy. And no, I'm not interested in pedantic exceptions to that statement.
Paris knows a business arrangement when she sees one.
Read the article again: the new "secret" reported here isn't about budget, CTR, # searches, or bid...it's about POSITION. Higher positions get higher numbers of impressions. That's news, big news, and Google doesn't want to talk about it. While that pricing model in itself isn't evil, the fact that they're so determined to cover their tracks is highly, highly suspicious.
AdWords isn't an auction, because in a real auction bidders get to know the rules of the game, and can count on them not changing mid-stream.
@ AC @ me, Phil
Position is a function of bid and quality score. Pretty straightforward. Ceteris paribus, the ads which receive more clicks than the others rise in position. This maximizes both ad relevancy and Google's revenue take. No secret, been like this for years. What's the issue?
I have the adwords servers pointing to 127.0.0.1 in my hosts file so never see them anyway.
Why click on an ad?
i) because I might want to buy the product in question. This does happen sometimes.
ii) because I like the site I'm reading and want to give the owner a tiny cash reward.
iii) because the advertiser sounds like a jerk and i want to levy a tiny fine on them.
Now what's so hard about that?
I loath any ads that animate, pop up windows, make noises or otherwise make me want to kill, but if they're just static clickable thingies I'm not all that fussed.
Sometimes I do notice the ad but - and I don't known how long I've been doing this (years) but I copy and paste the URL instead of clicking. I guess it's just an instinct. Now I don't even need to do that as the Customise Google Firefox extension takes care of all that.
Adwords FAILED for me
I had a go at AdWords, and ended up spending several hundred pounds - for precisely zero sales. I didn't go into it blind or expecting it to be easy, I did a lot of reading, monitored the keywords and got precisely nowhere.
The 'great' thing about AdWords is you can monitor what people are looking for and hone your campaign. The bad thing is you have do not a lot of space to explain yourself, and it is all too easy to get impressions to become your goal and to forget sales is the end result.
It seems OK to begin with - first couple of days (impression-wise). You get hooked, spend all your time staring at the stats and thinking you can tweak. You get dragged in and waste time and money.
But a single magazine ad - a similar cost - paid for itself several times over. The reason? I got to explain my product, I could precisely target the demographic. And tracking? Easy, offer the reader something in return for telling you where they found you.
Not rocket science, but not something Google want you to hear.
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