PAID SEARCH PAID SEARCH - RHS PAID SEARCH - FEATURED

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    19-Dec-2015
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Transcript of PAID SEARCH PAID SEARCH - RHS PAID SEARCH - FEATURED

  • Slide 1
  • Slide 2
  • PAID SEARCH
  • Slide 3
  • PAID SEARCH - RHS
  • Slide 4
  • PAID SEARCH - FEATURED
  • Slide 5
  • IN THE 1990s, STANFORD STUDENTS SERGEY BRIN AND LARRY PAGE DEVELOPED A SEARCH ALGORITHM
  • Slide 6
  • THEY TRIED TO SELL THEIR SEARCH ALGORITHM TO YAHOO FOR $ 1 MILLION Source: Hal Varians Berkeley Lecture on Search Economics
  • Slide 7
  • THEY FOUNDED GOOGLE IN 1998 AND WENT PUBLIC IN 2004
  • Slide 8
  • AROUND TEN YEARS AGO THERE WERE MANY SEARCH ENGINES
  • Slide 9
  • TODAY, THERE ARE EFFECITVELY 5 PRIMARY SEARCH PROVIDERS comScore April 2008 Search Engine Rankings
  • Slide 10
  • AND 3 PAID SEARCH PROVIDERS Based on June 2008 Covaris numbers reported at mediapost (msn is inferred)
  • Slide 11
  • PAY PER CLICK MODEL $0.25 x 10000 clicks = $2500 $1.00 x 2500 clicks = $2500 $10.00 x 250 clicks = $2500
  • Slide 12
  • GOOGLES ORGANIC SEARCH GOAL IS USER SATISFACTION
  • Slide 13
  • GOOGLES PAID SEARCH GOAL IS USER SATISFACTION ADVERTISER SATISFACTION MAXIMUM PROFITABILITY
  • Slide 14
  • PAY PER CLICK MODEL $0.25 x 10000 clicks = $2500 $1.00 x 2500 clicks = $2500 $10.00 x 250 clicks = $2500
  • Slide 15
  • WHY AD POSITION MATTERS EYE TRACKING Source: Jan Pedersons Search Quality Presentation at Berkeley (2007)
  • Slide 16
  • PPC - BIDDING ashtonsd90.com bids $1.38 ritzcamera.com bids $1.17 shopcartusa.com bids $3.23
  • Slide 17
  • ashtonsd90.com bids $1.38
  • Slide 18
  • ritzcamera.com bids $1.17
  • Slide 19
  • shopcartusa.com bids $3.23
  • Slide 20
  • HOW RELEVANT IS THE LANDING PAGE AND AD?
  • Slide 21
  • RANK THEM ashtonsd90.com bids $1.38 ritzcamera.com bids $1.17 shopcartusa.com bids $3.23
  • Slide 22
  • NORMAL AUCTION ashtonsd90.com bids $1.38, ranks 2 nd and pays $1.38 ritzcamera.com bids $1.17, ranks 3 rd and pays $1.17 shopcartusa.com bids $3.23, ranks 1 st and pays $3.23
  • Slide 23
  • VICKREY AUCTION (VCG) ashtonsd90.com bids $1.38, ranks 2 nd and pays $1.17 ritzcamera.com bids $1.17, ranks 3 rd and pays ??? shopcartusa.com bids $3.23, ranks 1 st and pays $1.38
  • Slide 24
  • GOOGLE AND YAHOO USE A GENERALIZED SECOND PRICE (GSP) AUCTION Googles customers are ranked based on a quality score * their bid and pay slightly more than the next ranked bidder not exceeding their maximum bid. PRICE AND RANKING ARE RECALCULATED EACH QUERY
  • Slide 25
  • AD RANK = BID x QUALITY SCORE (QS) ashtonsd90.com 1.38 x 4 = 5.52 ritzcamera.com 1.17 x 6 = 7.02 shopcartusa.com 3.23 x 1 = 3.23
  • Slide 26
  • HYPOTHESIZED PRICE = NextPlace(AR) / QS +.01 ashtonsd90.com 1.38 x 4 = 5.52 pays 3.23/4 =.82 ritzcamera.com 1.17 x 6 = 7.02 pays 5.52/6 =.93 shopcartusa.com 3.23 x 1 = 3.23 pays minimum.05
  • Slide 27
  • HOW MUCH WOULD NIKON HAVE TO PAY FOR NUMBER 1? HYPOTHESIZED PRICE = NextPlace(AR) / QS +.01 CompanyBidQSAR Ashtonsd90?4 Ritzcamera1.1767.02 Shopcartusa3.231.05
  • Slide 28
  • GOOGLE SYNDICATES ITS ADS TO PARTNER SITES
  • Slide 29
  • GOOGLE SYNDICATES ITS ADS VIA ADSENSE
  • Slide 30
  • A FEW ADSENSE SITES GENERATE GOOD REVENUE As compiled on mindofmichael.com
  • Slide 31
  • ADSENSE PARTICIPANTS AGREE NOT TO DO BAD THINGS
  • Slide 32
  • Slide 33
  • Slide 34
  • Slide 35
  • CLICKFRAUD
  • Slide 36
  • PAID SEARCH IS SANDBOXED FROM ORGANIC
  • Slide 37
  • WHEN I CLICK HERE, I DONT CLICK HERE
  • Slide 38
  • PHOTO ATTRIBUTIONS Slide 37: 'Happy Kids NEED A Healthy Sandbox www.flickr.com/photos/[email protected]/567277264www.flickr.com/photos/[email protected]/567277264