Advertising and Search Engines-00-1325

Another aspect that matters in this advertising world, is the exercise and implementation of "keywords" that play a very influential role in determining the visibility of a particular ad. In order to determine this visibility, search engines generate practice of "quality scores! " Official Google Blog has further elaborated on the subject: "There's some interest in how and why "quality scores" are used in search engine ad auctions. In this post, we will try to describe "why" we utilize quality scores; a later display will go into "how, " including more material about bids. When a user types a query into a search engine, it will typically answer both natural search results and advertisements. Googleand other major search engines apply an ad auction to determine which ads are shown and how much advertisers pay for them. In the auctions, advertisers enter bids that reflect how much they are willing to pay for a click on their ad - this is called their maximum cost per
click (CPC). Ads are then ordered by the product of the bid that is entered and the estimated ad quality score. Community often solicit why ad quality enters the formula - isn't the bid per click enough? Why can't advertisers just purchase their path to to the top ad position? To see why both components are important, let us gaze at a simple example. Suppose that two advertisers are bidding on the keyword "jet airplane." Joe's Jets is selling actual jet airplanes, while Moe's Models is selling models of jet airplanes. Since jets are expensive, Joe is willing to pay a quantity per click. On the contrary not many humans can afford to shop for jets, so Joe won't get many clicks. Moe, by contrast, is willing to pay a plenty less per click, nevertheless he will also get many more clicks. Which ad should be listed higher in the "sponsored links" section of the search results page? What matters in this decision is not simply an advertiser's
value for a single click -- the maximum CPC that the advertiser is willing to pay - on the other hand rather the total estimated value of showing that ad: the value per click times the number of clicks that the ad is likely to receive. The number of clicks that the ad is likely to receive depends on the historical clickthrough rate, which is an valuable component of the ad quality score. Thus the bid per click times the quality score gives us an estimate of the total value of displaying an ad over time. Joe's ad may have a higher value for a single click, however if Moe's ad gets a collection more clicks over time, it could easily have a greater total value. In that case, Moe's ad will be shown in the more prominent position. The quality score gives search engines a road of aligning the incentives of the buyers, the sellers, and the viewers of ads. The search engine wants to sell ad impressions, but advertisers desire to pay for clicks. The solution is
for advertisers to bid on a cost-per-click basis, while the search engine estimates the total value of the ad over time: bid per click times the expected number of clicks. Full text: http://computerandtechnologies.com/web-hosting/news_2008-12-31-23-30-03-541.html