Breaking Auction Order Explained

iEntry 10th Anniversary

RSS

Contact

Breaking "Auction Order" Explained

By: Gord Hotchkiss
2007-08-01

One of the things that raised eyebrows in my interview with Diane Tang and Nick Fox was the following section regarding how Google determines which ads rank first and climb into the...

...all important top sponsored locations:

Nick: Yes, its based on two things. One is the primary element is the quality of the ad. The highest quality ads get shown on the top. The lower quality ads get shown on the right hand side. We block off the top ads from the top of the auction, if you really believe those are truly excellent ads

Diane: Its worth pointing out that we never break auction order

Nick: One of the things thats sacred here is making sure that the advertisers have the incentive. In an auction, you want to make sure that the folks who win the auction are the ones who actually did win the auction. You cant give the prize away to the person who didnt win the auction. The primary element in that function is the quality of the ad. Another element of function is what the advertisers going to pay for that ad. Which, in some ways, is also a measure of quality. Weve seen that in most cases, where the advertisers willing to pay more, its more of a commercial topic. The query itself is more commercial, therefore users are more likely to be interested in ads. So we typically see that queries that have high revenue ads, ads that are likely to generate a lot of revenue for Google are also the queries where the ads are also most relevant to the user, so the user is more likely to be happy as well. So its those two factors that go into it. But it is a very high threshold. I dont want to get into specific numbers, but the fraction of queries that actually show these promoted ads is very small.

This seemed a little odd to me in the interview and I made a note to ask further about that, but what can I say, I forgot and went on to other things. But when the article got posted on Searchengineland, Danny jumped on it at Sphinn

"Seriously? I mean, it's not an auction. If it were an auction, highest amount would win. They break it all the time by factoring in clickrate, quality score, etc. Not saying that's bad, but it's not an auction."

This reminded me to follow up with Nick and Diane. Diana Adair, on the Google PR team, responded with this clarification:

We wanted to follow up with you regarding your question below. We wanted to clarify that we rank ads based on both quality score and by bid. Auction order, therefore, is based on the combination of both of those factors. So that means that it's entirely possible that an ad with a lower bid could rank higher than an ad with a higher bid if the quality score for the less expensive ad is high enough.

So, it seems it's the use of the word "auction" that's throwing everyone off here. Google's use of the term includes ad quality. The rest of the world thinks of an auction as somewhere where the highest bid (exclusively) determines the winner. Otherwise, like Danny said, "it's not an auction". So, with that interpretation, I then assume that Nick and Diane's (which sounds vaguely like a title of a John Mellencamp song) comment means that Google won't arbitrarily hijack these positions for other types of packages which may include presence on the SERP, as in the current Bourne Ultimatum promotion.

Comments

Tag: Auction, Google

Add to

Del.icio.us |

Digg |

Reddit |

Furl

Have a bookmark! -

About the Author:
Gord Hotchkiss is the President and CEO of Enquiro, whose goal is to push the search engine optimization industry forward both in terms of measurable results and client satisfaction.

Do you have a search site?
Submit it free to the internet's best search industry directory. » Click Here

Search Engines
Google, Yahoo, MSN...

Search Marketing
Marketing, Budget, Planning...

Pay Per Click
Bid, Price, Quality...

SEO Companies
Optimization, Manage, Company...

SEO Tools
Track, Search, Create...

Analytics
Statistics, Counter...

» Submit your site for FREE «

More...

Get Your Site Submitted for Free in the World's Largest B2B Directory!

Email Address:
* URL:
*
*Indicates Mandatory Field

Terms & Conditions


Titan Quest Forum	Nintendo Wii	Graphics Forum
Halo 3 Forum	Mac Software