A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.
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Doug Nebeker ("Doug")
If so you might want to read this:
If you haven't been monitoring your placements report, you might want to pour yourself a stiff drink first...
I don't normally post links to blog posts, except in response to questions from others. But this might be important for some people.
Wednesday, June 25, 2014
> Don't they realise how much this sort of thing damages their reputation.
Reputation shmeputation. Reputation is only secondary to shareholder value. And if the shareholders want to see nice quarterly earnings you better do something - even if it is disastrous in the long run.
I resumed Display (Content) ads on Google Adwords a year ago. I was tempted by the lower cost per click.
Still most of my clicks came from the Google.com search page.
Over time the cost of my search Google.com clicks grew and grew to absurdly high values and in the absence of any competition.
I contacted Google about my high cost per click. Unfortunately the woman that answered me didn't pick up my point about the lack of competition or rather she didn't seem to believe me. She pointed out that there was competition. Unfortunately they weren't really my competition. They just used 1 common word and I used that common word as well as a keyword. The other two of my main keywords were different. But still Google said that was my competition (it isn't!) and used that as an excuse why my cost per click was too high.
But the Google employee did say something else. She said the low click-through I got on the Display Network was bumping up my cost of clicks on the Search network.
She recommended I turn off the Display Network and just run the Search Network. Over time I was told the higher click-through on the search network would eventually reset my account and I would have a lower cost per click.
So essentially a Google employee told me, that running the Display Network was bumping up my cost on the Search Network and that the former should be turned off!
I fumed afterwards. Effectively Google was telling me for the next few months I would have to pay inflated costs while Google slowly adjusts my account with the record of a higher click through rates.
Effectively Google was punishing my Google because of a bad connection on their part!
I don't think Google should put up my Search Network costs because of a lower click through on the Display Network.
Everything seems to lead to Google making more money and for advertising to be unprofitable.
I have tried to suggest to Google it makes most business sense to "pile them high and sell them cheap".
If costs per click were lower, it wouldn't be such a big issue for lots of people to work out whether the increased traffic from Adwords is worth it.
Just remember the old metric from the shareware days. You get 1 sale from 100 downloads.
From one of my minor products, I find I get 1 download for every 10 pages visitors and 1 sale from every 10 downloads. That does work out rather near the old metric.
From my main product I find I get about 3 -4 sales from 200 web visits or thereabouts.
Google shouldn't charge such a high click price that it wipes out any chance of profit.
I have always wondered about the extent to which:
-performance of 1 keyword affects others in the same adgroup
-performance of 1 adgroup affects others in the same campaign
But it hadn't occurred to me that campaigns affect each other. That would be weird, because display campaigns work completely differently to search campaigns, with much lower CTR for example. I wonder if that is true, or if that is the Google employee talking out of his/her a**.
Google are using all sorts of methods to ramp up the cost per click and it is very annoying.
>Just remember the old metric from the shareware days. You get 1 sale from 100 downloads.
>From one of my minor products, I find I get 1 download for every 10 pages visitors and 1 sale from every 10 downloads. That does work out rather near the old metric.
Actually it is 10x higher! Also my research shows that it is more likely to be 1% visit:sale than 1% download:sale:
Of course, it depends on your market.
Tuesday, July 01, 2014
>Everything seems to lead to Google making more money and for advertising to be unprofitable.
They are a business. They are going to try to set the price of clicks to optimize their profit. It seems pretty clear that it is no longer using just a simple auction model (if it ever was).
>I have tried to suggest to Google it makes most business sense to "pile them high and sell them cheap".
The number of (genuine) clicks is finite. Them lowering their prices isn't going to result in more clicks (the clickers aren't the ones paying). So they need to raise the click price to increase their profit.
Tuesday, July 01, 2014
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