Live data from Hacker News

Google winning 98% ad spots it auctions off, after order to treat others equally

wsj.com

81–90 of 107 posts

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#81

It's kind of a clever solution by Google, if a bit troll. They can make that ad auction 100% fair and still win it because they have more expertise on running efficient ad campaigns than anyone. IMHO that just doubles down on the danger of their monopoly power, but perhaps it complies with the antitrust requirements.

Most importantly they have more information about each auction than their competitors. They know for each user every other search result clicked. They know what the users interests are. They know which users prefer stuff delivered fast, which prefer the cheapest items, and which will be wooed by 50% off deals. They can use that data to present the best possible results, get the highest click through rate, and sell th…

> Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown.

Isn't this fundamentally an argument to outsource a greater portion of ad creation and campaigns, or parts thereof, to Google?

Google isn't just the best ad platform, it's likely the smartest user of that ad platform, and has the automation/ML chops to be the fastest and most competent user of that platform.... To my business eyes that sounds like a company that can offer services deeper into the advertising value chain than 'just' hosting the ad-canvas.

On the flip side, even as the #1 advertising company in the world it's still darned hard for Google to be the #1 Shoe Manufacturing company in the world at the same time. If that dynamic holds then Googles growth in this area should be a massive threat to advertising agencies to the collective benefit of businesses in the rest of the market who can leverage their services more efficiently, n'est pas?

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#82

> Kelkoo CEO Richard Stables says the firm’s revenue from general search traffic dropped by 62% last year, to €2.3 million. In 2018, he projects a two-thirds drop to €800,000. I decided to go to http://www.kelkoo.co.uk/ to check it out. This website is so clearly a scam created for this antitrust case. I went ahead to compare two cameras: the Canon EOS 1D X Mark II (a $4k camera) to a Canon Ixus 275 HS ($200 camera),…

>This website is so clearly a scam created for this antitrust case.

What makes you think so? It starts with "We at Kelkoo have been helping our customers find the best products at the most affordable prices for the past 18 years." I clicked on the merchant sign up page, seemed fine.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#83
post #30
post #13

Earlier quoted context omitted.

It raises the question, why is Google in the comparison shopping business. Thinking about it, it makes sense for google though. Web scraping and data analysis is their forte. And it fits within google's approach of "answering any question someone has". If someone wants to know the cheapest place to get X, they just want someone to type X into google and get the best answer. For them it's not about making money on com…

They are in the business of making companies pay for placement in the comparison shopping business. It seems obvious to me that this is just an artificial product to make more revenue. Froogle was actually better for results a decade ago when they just sorted the normal web scraping for shopping items. Adding the forced ads to show up resulted in worse deals for consumers. This was part because advertisers had t pay…

From an advertiser perspective it is much nicer to use Google Shopping than the old days of attempting to use the regular text adwords to advertise products. Also better for customers on the regular search results page to find products with the shopping listings .

There was a time when Google Shopping was both free and paid listings which was probably a better balance. Even if it still was like this I think having people submit product feeds still leads to much better results than just scraping.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#84
post #59

This is similar to the old eBay scam where the seller bid on his own items under a different account. If the price was too low, the seller could always bid to drive the price up. If the seller won, it didn't matter. The seller is just relisting the item again after paying himself or cancelling. I can't imagine how anyone thought this would work; Google participating in their own auctions. At least on eBay, sellers tr…

There are variations where this works out in google's favor, but there is a big difference to the ebay situation where you just keep relisting the same item until it sells for a "good enough" price: each ad impression is only sold once, there is no relisting.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#85
post #58

Earlier quoted context omitted.

Is this honestly a question? Murdoch disdain for Google is well known.

Rupert Murdoch can have well documented dislike for Google without his dislike intrinsically kneecapping the Wall Street Journal’s journalistic integrity. The comment I replied to criticizes the article we’re discussing categorically by origin, instead of specifically on merits. Murdoch’s agenda can be a thesis statement for why the WSJ has poor journalistic integrity with respect to Google, but it doesn't demonstrat…

In this case, Murdoch has a track record of using his media empire to push his business and political views, so it's really quite appropriate.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#86
post #74

Earlier quoted context omitted.

Most importantly they have more information about each auction than their competitors. They know for each user every other search result clicked. They know what the users interests are. They know which users prefer stuff delivered fast, which prefer the cheapest items, and which will be wooed by 50% off deals. They can use that data to present the best possible results, get the highest click through rate, and sell th…

Ad auctions have 100ms to reply to an auction request.[0] This does not give you a lot of time to display the perfect ad for a given customer or search. Especially when you need to do this at the volume that Google shoes ads. [0] https://www.quora.com/How-do-ad-exchanges-and-real-time-bidd...

That's unlikely how it actually works on Google's site.

Google doesn't have to connect to an advertiser's network, they already have the ad information and all targeting and bidding information, so they can mostly compute the results ahead of time and only do last minute checks for winners based on, for example, whether the most likely winners have exceeded daily limits and such.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#87
post #9

Earlier quoted context omitted.

Google claims that it operates the buying side as a standalone business that needs to be profitable so it doesn’t overbid. I don’t buy that claim for a second, and I don’t think the EU will either.

Why not? I'm sure if you bid something ridiculous, say $1 billion for an ad, Google would rather show your ad than one of Google's.

They only need to fudge their numbers by a few percent for them to win the majority of impressions. It's not about bidding $600 for a $10 slot, it's about bidding $11 and then pointing out that their internal operator is still profitable after all sorts of internal cross subsidisation.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#88

> Kelkoo CEO Richard Stables says the firm’s revenue from general search traffic dropped by 62% last year, to €2.3 million. In 2018, he projects a two-thirds drop to €800,000. I decided to go to http://www.kelkoo.co.uk/ to check it out. This website is so clearly a scam created for this antitrust case. I went ahead to compare two cameras: the Canon EOS 1D X Mark II (a $4k camera) to a Canon Ixus 275 HS ($200 camera),…

Haha, having worked at Kelkoo when it was owned by Yahoo! so I have to disagree here. The management at Kelkoo really believe Google is shafting them but they used to do crazy things like change the location of the website every time they deploy. They were bad at SEO and blamed Google.

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#89

Which is more expensive. The new system that google is designing? The fine that they will have to pay? Or the oversight they will have to have to comply with EU law? (or some combination of the previous?). On the other hand could Google just quit putting ads on requests from the EU?

The system is cheap (it cost ~$15M of compute resources and $5M of engineering time). The fine is much larger. The oversight costs nothing now, but they're worried it might prevent them innovating in the future (as happened with Google Books)

Anyone can pull random numbers out of their ... :)

Re: Google winning 98% ad spots it auctions off, after order to treat others equally

#90

Earlier quoted context omitted.

> It means that any expense you spend on Y isn't really an expense, since the money goes right back into your pocket. If you do the accounting in this way, then you make that much less profit on your service, so it winds up being the same as if you are making a greater profit, but count the cost of Y at market value. > So not only do you get the extra income from other people buying Y, buy you can operate at higher m…

That's not how auctions work. Let's say A owns advertising business X and shopping business Y. Now, if B who only owns shopping business Z will be paying their competitors. If A bids higher, money still flows black to them regardless of the profit/loss. But Z is forced to bid much higher to get any traffic! This can be used to inflate the price to any level. Sure, others can also inflate the prices but if you try tha…

> So, they can sell their competitors (in shopping business) the impressions which never convert while selling the impressions which are highly likely to convert to their own shopping business.

If they do that, then their competitors should notice and then pay them less for giving them bad impressions, so they're just taking money out of one pocket and putting it in another.

This scenario only works out if their competitors are less competent -- but in that case, seems like Google would do well?

Post reply on HN