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How Google Inflates AdWords Bids

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Re: How Google Inflates AdWords Bids

#41

Post by joelrunyon »

robryan wrote: post #40
patio11 wrote: post #39

This would be a mostly ineffective and impressively devious way to increase ad bids when Google could just, you know, refuse to fill orders at prices below a reserve price chosen to maximize their own revenue. You know they do that, right? AdWords is not an auction. AdWords incorporates an auction-like mechanic in part of its pricing strategy. There are numerous other ingredients in the secret sauce. We don't know wh…

I have been wondering about that soft reserve value they have. Know of any information online about how it is calculated? Been wondering without competition on a keyword if there is some mostly common lower bound on bid to be shown or does it fluctuate depending on the search term.

It's fairly arbitrary. A lot of times they'll show random "first page bids" that have absolutely no reflection on the actual bids it takes to show up on the first page. That said, it doesn't stop them from trying to make you up your bids in an attempt to grab more impressions :).

Re: How Google Inflates AdWords Bids

#42

Post by joelrunyon »

anon808 wrote: post #38
joelrunyon wrote: post #20

Earlier quoted context omitted.

^This^ Just because you lose, doesn't mean it's a scam. If you're getting outbidded by people they more-than-likely figured out a way to monetize the customer on the backend a lot better than you. A lot of things on Adwords depend on breaking even on the front end and monetizing them over the long-term. That said, the article does raise some interesting points - but it's interesting to see how those vouchers seem to…

I think the ultimate point isn't that google is running a scam, but that it's favoring scammers to 'win' their auctions. Facilitating a scam and scamming aren't the same, but they're both not something I would want to be a part of.

You didn't read the article did you?

Google has a set of rules. People who learn how to play the game within their set of rules are rewarded by "winning."

Being bad at a game does not make it a scam. And just because you don't win, doesn't mean someone is scamming you.

Re: How Google Inflates AdWords Bids

#43

Post by fypomg »

The effect of this one time gift is temporary. The obvious overall goal is to gain longtime users, not short term gains by burning through free credits. The overall effect resulting in raised bids for current advertisers is negligible. Unless you have thousands of new adwords users opening up accounts, focusing their free credits towards the same term that is already competitive, then yeah, sure, ppc will increase a little.

You're running a small business, lets say you receive a credit of $100 to start an adwords account. You'll see from the adwords campaign a noticeable increase in traffic occurs, you can track phone calls from ad campaigns, and observe click-throughs to emails/sales received from running campaigns.

Great. Then you increase your budget to $1,000 a month on adwords, watch as pay-per-click supplements organic traffic that wouldn't otherwise be captured.

Beyond that, within the first month or so of having a new adwords account, Google (with a live and knowledgable rep out of Ann Arbor) personally helps you set up and optimize your campaigns (a service that predatory SEO and SEM experts typically gouge small businesses on). All of this is for free to help businesses understand how to use a tool that touches 65%? of users online. Disgraceful. How dare Google make money and put you in touch with consumers who don't know about your products or services.

Re: How Google Inflates AdWords Bids

#44

Post by pdenya »

adgar wrote: post #31
joelrunyon wrote: post #21

Earlier quoted context omitted.

This isn't standard Google-fare. Are you sure you weren't talking to a marketing consultant that was giving out those coupons (Google gives those out to consultants like candy to sign up new advertisers).

I'm skeptical about this too. Especially since your parent poster seems to imply he got Google on the phone with a $100 free adwords card, which everyone and their mother has gotten at one point or another. I just got one from my freaking domain provider for "loyalty" (2 years? Loyal? meh)

I don't know, I got it in the mail a week after checking out adwords but not spending anything. It said Google on it and the person I talked to was able to see and edit my account directly without me providing my password.

Re: How Google Inflates AdWords Bids

#45

Post by [deleted] »

adgar wrote: post #31
joelrunyon wrote: post #21

Earlier quoted context omitted.

This isn't standard Google-fare. Are you sure you weren't talking to a marketing consultant that was giving out those coupons (Google gives those out to consultants like candy to sign up new advertisers).

I'm skeptical about this too. Especially since your parent poster seems to imply he got Google on the phone with a $100 free adwords card, which everyone and their mother has gotten at one point or another. I just got one from my freaking domain provider for "loyalty" (2 years? Loyal? meh)

[deleted]

Re: How Google Inflates AdWords Bids

#46

Post by joelrunyon »

pdenya wrote: post #44
adgar wrote: post #31

Earlier quoted context omitted.

I'm skeptical about this too. Especially since your parent poster seems to imply he got Google on the phone with a $100 free adwords card, which everyone and their mother has gotten at one point or another. I just got one from my freaking domain provider for "loyalty" (2 years? Loyal? meh)

I don't know, I got it in the mail a week after checking out adwords but not spending anything. It said Google on it and the person I talked to was able to see and edit my account directly without me providing my password.

Interesting.

One way or another this is another example of "nobody cares more about your money than you." Google reps for intro clients aren't always the most versed - so double check everything.

$100 doesn't go that far in Adwords anyways. It's always good to start small and scale things up gradually, rather than blast it, run through your budget and be back at square one.

You might have had a bad experience, but I highly doubt Google is actively trying to screw small advertisers out of their free $100 credits by giving them bad advice.

Re: How Google Inflates AdWords Bids

#47

Post by anon808 »

joelrunyon wrote: post #42
anon808 wrote: post #38

Earlier quoted context omitted.

I think the ultimate point isn't that google is running a scam, but that it's favoring scammers to 'win' their auctions. Facilitating a scam and scamming aren't the same, but they're both not something I would want to be a part of.

You didn't read the article did you? Google has a set of rules. People who learn how to play the game within their set of rules are rewarded by "winning." Being bad at a game does not make it a scam. And just because you don't win, doesn't mean someone is scamming you.

I did read it; I'll add color to my reply and hope it makes more sense to you. Adwords auction favors the most aggressive marketers some who's successful strategies are considered scams by me and other folks (but maybe not by google for now). What aggressive marketers are doing that allows them to bid the highest price may not be against google's terms of service (or illegal), but those strategies maybe considered unethical by other marketers that then won't compete with the bids. That's why I said google's auction creates an incentive (favors) the most agressive marketers (with the most scammy strategies) to win. That's the logic.

Re: How Google Inflates AdWords Bids

#48

Post by gscott »

I have gone from spending 6k on adwords to about 15k with fewer sales.. I have done everything possible but there is no reversing the decline. My employer is quite unhappy with me luckily 80+ percent of his business is not driven by Google. I became adwords qualified, deleted all of the non performing keywords, hired a $200 an hour consultant a favorite of Google's from the help board, the website design is very professional, and keyword targeting is all perfect for the business. It is quite depressing.

Re: How Google Inflates AdWords Bids

#49

Post by fauigerzigerk »

I strongly recommend looking at other platforms before spending more money on AdWords

I guess this last sentence shows why inflating prices that way cannot be a deliberate strategy on Google's part unless they are over-confident quasi monopolists, which I don't think they are (yet).

Re: How Google Inflates AdWords Bids

#50

Post by anamax »

AJ007 wrote: post #36
jcampbell1 wrote: post #17

Earlier quoted context omitted.

With the auction model, the spoils go to whoever has the highest margin, and in my industry it is people doing reverse billing scams. I am not willing to advertise a price of $9.95, and then charge people's credit cards $130 every month after that, based on an agreement that is in low contrast and 11px font.[1] You are right, that an auction model doesn't make it a scam, but it does invite scams, and Google should be…

As long as it is an auction process, there is intense pressure on all involved to extract as much value as possible from every customer.

> As long as it is an auction process, there is intense pressure on all involved to extract as much value as possible from every customer.

When I walk into a physical store, there's not a google ad in sight, yet they're trying to extract as much value from me as possible.

That's why I doubt that advertisers would behave differently under a different ad pricing system.

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