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June 3, 2006

Is it just Adwords, or is all of Google gone Evil?

Filed under: Chess Miscellaneous — Search Engine Optimisation @ 8:09 pm

This pic is an attempt by someone to work out the interplay between adwords and adsense. Kinda scary huh? I run a small online chess retailing outfit - just about provides enough income with a bonus at Christmas for my family. The mighty G holds the rules of adwords very close to it’s chest. A while ago - in a bid to get to the top of the adwords tree I increased my bid significantly, and ended up paying just over 12000% (yes, three zeros) greater costs for nearly four hours, until I returned the bid back to where it should have been. This wiped out the profit for my small enterprise for an entire month! Now you’re probably thinking - ‘well you’re clearly an idiot for bidding that much’, and I can understand that sentiment. However, consider closely the situation. Google never charge the amount you bid and the generally accepted wisdom is that it doesn’t matter how much you bid, it just puts you above the person who bid less - and that your costs will be 10c (or some such small figure) more per click. This is the view held by many experienced adwords practitioners.

The fact is that this is absolutley not true. The price you pay depends on another closely guarded factor - so closley guarded that if discussed in terms of actual cases, ya get banned from the G. Yes, God becomes displeased - oops, did I say God? I meant, of course, Goog, the G, G!, The Goog, or whatever you prefer to call the entity that ‘does no evil’. Anyway - where was I? Yes, The other factor? What your competitors are bidding! Obvious? No. Like Rumsfeld said - there are known knowns, known unknowns, unknown knowns and unknown unknowns. Wow! What a mouthful. His wrestling was clearly a war of words not physical.

OK - here it is… if you’re bidding 50c a click, we always assumed that the guys underneath were all bidding 10c less, until it gets to the minimum. Say there’s one guy above you. You assume he’s bidding 60c (leaving aside the other factors we know make a difference - like quality of ad which also lowers the actual price). So - the wisdom goes - if you now bid $90 per click, all you end up paying is 60c. The formerly top guy now pays 50c and all live happily ever after - right? Wrong. That’s a possible scenario if no-one then tries to get back to the top spot - but if it were that easy everyone would do it. The formerly top guy now raises his bid to $35 a click in an effort to get back up there. Oooh, this is where it gets painful. The difference between the formerly top guy and you is now significantly spaced apart, as is the difference between the formerly top guy and the blissfully unaware beneath him. The G will now start charging in excess of the second position, the formerly top guy. You’re now paying, instead of 60c, an amount per click greater than $35. He is paying an amount per click greater than the guy beneath him. But G! doesn’t tell you that. G! doesn’t tell you anything. So far, I don’t think I’ve said anything that will cause my demise in the ‘benevolent’ giants search engine that does no evil. So I won’t push it too far by even remotely suggesting that it’s worth arguing the case with them - hey, never know, they may return some of the greedily gotten gains.

If only they’d tell us the rules, we’d know, and they’d make less money. Oh! Silly me, that must be why they don’t tell us the rules. But hang on! They ‘do no evil’ - don’t they?

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