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|AdRank, Affiliate Marketers and Max CPC|
Scary questions that need answers!
Apologies in advance for the length of this post (I haven't written it yet, but it's been brewing for a while), but there are some issues about AdRank and affiliate advertisers that neither Google nor the Perry Marshalls of the world nor anyone else I've found can (or is willing to) answer, and IMHO, should scare the living hell out of anyone who thinks his/her ads are safely well-positioned on Google. If AWA or anyone else out there can provide some insight here, I and I'm sure tons of others will be very grateful.
I've experienced something fairly since the QBA (is that what we're calling it?) changeover, and strangely enough, it has nothing to do with minimum bids. The institution of the minimum bids had only good effects -- we're actually paying 1-4 cents for traffic that was profitable at 10-15 cents per click. However:
My company advertises using the GoogleCash method, and for those who don't know, that simply means we shell out our own money to run Adwords campaigns for other companies' products, and the only compensation we get is our affiliate commissions. If you know that business, you know that ever since January, Google displays only one affiliate ad per display URL -- and the lucky ad that shows will be from the account with the highest AdRank for that particular keyword. Easy enough so far, right? Right.
Fast forward to August. In the seven months since January, my company carves out a very strong position for three very profitable keywords -- we'll just call them KW1, KW2 and KW3. By "very strong position," I mean seven months of keyword history with average CTR of between 15% and 20%. Because of the AdRank we achieved on those 3 keywords, we were always the one affiliate ad that got served up. And because of Google's rule about showing only one ad per affiliate program, none of our competitors could ever even get an *impression* on these three keywords from January through August. Even maxing out the keyword bid couldn't displace us. It was, in essence, the Holy Grail of Adwords -- owning three very profitable keywords in a position so strong that we were unassailable by competitors. Life's good, right?
It was -- until the QBA switch. On the *very day* the switchover took place, our traffic for all three keywords died. I didn't even notice it until two days later (it was basically on autopilot due to the past six months of success). I searched on KW1, KW2 and KW3, and sure enough -- there was a competitor who was, by all appearances, outranking us on all three keywords. A brand new competitor, who had no chance of even getting an *impression* on these words for the past seven months, is now outranking our company, with our 7 months of 15-20% CTR per keyword, all alone in the blue strip atop Google.
It made absolutely no sense, but there was one way to regain position -- Max CPC. Even if our new competitor had a gargantuan bid, we could match it, and then our performance history would be combined with our new monster bid and we'd get our spot back. Right?
Nope. We raised bids to $20. $50. $75. All the way to $100. And we still didn't get the position back. And I apologize for being repetitive, but let me summarize this just one final time: **Since the QBA switchover, a brand new advertiser can come in and instantly outrank an established advertiser on each of three keywords with 7 months of 15-20% CTR and a $100 Max CPC.** If that makes absolutely no sense to you, then the line forms right behind me.
I did, of course, ask Google to clarify. I suggested one of two things: an internal error in Adrank calculation, or an Adwords employee (one who precisely understands "other relevancy factors" that comprise Quality Score that the rest of us can only guess at) had simply taken his/her proprietary knowledge and set up a shadow account on the side and is cleaning up at our expense. I was assured that neither is true (although I certainly haven't ruled out no. 2 myself). Google's response, boiled down, was this: "Sorry you're frustrated, but yep, you're outranked now. Don't ask why, because we can't talk about other accounts. Just trust us, you're outranked."
I trust 'em, all right -- we're still outranked and not showing for those keywords. But here's the catch-22 that Google won't comment on; in an environment where only one ad per URL will show, how can anyone OTHER than the top-ranked ad make progress toward a higher Adrank, if their ads, by definition, cannot be displayed? The natural answer is, "they can't", right? But that's NOT right, and we're the poster boy for it -- we owned the no. 1 spot for 7 months, and one day, bang -- we're gone.
All I want to know is -- how? The discussion, then, MUST return to these "other relevancy factors." Adwords Advisor has mentioned that AdRank is determined as it always has, based on Max CPC. That may be true -- it may be "based on Max CPC" -- but everything you've just read above (and again, I'm sorry for the length of this thing. I just want some answers), some element(s) of the overall AdRank formula have changed significantly. And the changes are significant enough to do major damage. These were three keywords that were netting us about $100-$150 in daily profit -- not retire-in-South-France money, mind you, but a very nice piece of change for logging into Adwords once a day. The worst thing about it is, we earned that money by following Google's instructions to the letter about tight, relevant advertising -- and now they've swept the rug from under us, and won't tell us why.
OK, there it is. Anyone experiencing anything similar? Comments? AWA?
|You should never rely on Google for an income... |
Well of course- you should never RELY on anything. But if you were making say $500 a day with an Adwords setup would you just say,"hey, this is unreliable. I'm quitting now". Of course not, you would do everything possible to nurture and protect that income stream.
|But if you were making say $500 a day with an Adwords setup ... |
Please, PLEEEZE! show me how to make $500 a day using gaw. :-P
I'd be happy to just break even with the new system. ;-)
In any business relationship their is risk of change but you have to be able to "rely on them a bit. We all except the price they give us per click as we have no way to verify. We make ads, pages etc relying on the fasct Google will be there in the morning.
It is not a good business relationship if you cannot rely on the other person.
Why is it that if someone doesn't agree with policies or behavior of Google you want them to leave?
Because you are implying they are dishonest or doing something underhanded. To keep doing business with someone whom you think behaves like that makes you look foolish. If you can't trust them to properly manage something so easily managed, then why do you take their word on all the other IMPORTANT things you have to trust them with? We are talking about a business relationship. If you don't trust them it is illogical for you to continue to put yourself at risk.
|I don't get that. It is perfectly OK to question the things Google does. |
The unfortunate bane of the internet. Everyone things it is okay to question anything anyone else ever does without putting any thought into what they are saying or the consequences and realities of their acquisations. It is easy to accuse every company in the world to be shady and underhanded. It happens on the internet every day. It has gotten way too easy to be critical just for the sake of being critical and people do not put enough thought into their criticism. You can question things Google does... But some of the complaints here basically accuse Google and its employees of stealing/cheating them. To make those kinds of insinuations while still being their customer makes no sense.
|It might even help them to make a better product. It helps other publishers to deal with Adsense issues. Criticizing and scrutinizing is perfectly normal in any business relation. |
Yeah and accusations of lying, cheating and stealing are almost ALWAYS the termination of any normal business relationship.
|So does Google to us by telling/warning us if they think we don't act according the TOS. Actually I believe our scrutiny towards Google is one of the main reasons this forum can exist. Who would ever come to read or write in a halle-google-lujah forum? |
Not relevant. One thing to be critical another thing to make some of the over-zealous and unsubstantiated accusations people make here. This is not something assigned to just this forum, this is very COMMON mis-behavior by people and it has flourished with the advent of the internet. There are a lot of reasons why it happens.
I just suggest people analyze what they are actually implying when they say things about people they do business with.
If the local grocery store charged you $5.00 more every time you went there, and you kept going there but just complained about it to them and your friends, how do you think that behavior would be viewed? People would think you were wacked, and would ignore you. Normal behavior would dictate you stop patronizing someone who is stealing from you.
you think we should stop using adwords for
, but this only makes sense if people here thought google as an organisation was being dishonest. I dont think anyone is seriously suggesting that.
|implying they are dishonest or doing something underhanded |
However it is quite reasonable for people to voice concerns over possible conflicts of interest within adwords. I personally dont think they are "stealing" as you put it, I just think they have unnecessarily opened themselves up to criticism because of their internal policy on employee accounts. I still think adwords is a good system, and have no reason to think google employees are anything other than honest. Why should I stop using adwords?
"If the local grocery store charged you $5.00 more every time you went there, and you kept going there but just complained about it to them and your friends, how do you think that behavior would be viewed? People would think you were wacked, and would ignore you. Normal behavior would dictate you stop patronizing someone who is stealing from you. "
Not if it was the only store in town. Starve or cough up the $5? I might still complain about it.
"The unfortunate bane of the internet. Everyone things it is okay to question anything anyone else ever does without putting any thought into what they are saying"
So all of us are just saying things without thinking.
Is that what you're saying?
I think that aeiouy may be alluding to a "potty mouth" tendency in the same section of people who seem to earnestly believe that G is out to get them personally ahead of all other business goals, that tin-foil hats will help, and that throwing up garbage in the SERPs is a service to humanity.
A little bit of clear rational thinking (eg NOT wild hypothesising from selective reading of two data points on one site on one day!), and remembering "it's not always about you", would kill a lot of threads stone dead in WW, though it would possibly be less interesting for it!
A quick scan of this thread tells me that you could only be talking about that insane Dr.X. ;-)
|I think that aeiouy may be alluding to a "potty mouth" tendency in the same section of people who seem to earnestly believe that G is out to get them personally ahead of all other business goals, that tin-foil hats will help, and that throwing up garbage in the SERPs is a service to humanity. |
Maybe "potty mouth" (scuze mah Frinch) but I don't "earnestly beleive" that G is out to get me. I don't even think I'm ever going to be on their radar. I guess you're refering to the "PS..paranoid" line I inserted at the end of my post. If you can't tell it's a joke then I'll venture a guess that you don't understand what this thread is about either (not as it started, but what it has become).
Wait, you compare a search engine like G to your online payment bussiness and you want to make assumptions like this?
|A little bit of clear rational thinking (eg NOT wild hypothesising from selective reading of two data points on one site on one day!) |
yeah, I guess it would be kinda dead around here. ;-P
|, and remembering "it's not always about you", would kill a lot of threads stone dead in WW, though it would possibly be less interesting for it! |
Ok, I'll promise to watch my potty mouth if you promise to read everything in the thread before you post. Deal?
I didn't have you in mind, in fact, at least not in particular, promise! I was drawing a somewhat wider circle of WW friends into my wild accusation.
And I still stand by my payment-service point, BTW!
(Where am I? What's this party? Where did I get that guitar? B^> )
You mean there's other nut cases out there? Cool. I'm not alone. :o)
|I didn't have you in mind, in fact, at least not in particular, promise! I was drawing a somewhat wider circle of WW friends into my wild accusation. |
Ok, you do that and I'll stand by my assertion that you're wrong.
|And I still stand by my payment-service point, BTW! |
Next time I party with you guys, I'm bringing a shaperone. I was hitting on that dancer. Imagine if I had gone home with her. EEK! :-D
|(Where am I? What's this party? Where did I get that guitar? B^> ) |
|Please, PLEEEZE! show me how to make $500 a day using gaw. :-P |
Not to brag, but yesterday we spent $1356.50 and grossed $9064.15
Okay, maybe I am bragging. But we had a good day.
We also have the benefit of being a large company with a recongizable brand in one of the top travel sectors. So we get a lot of $$$ to throw around. So if I sound patronizing here, I'm sorry, I'm just so used to it.
Also another reason why so far I have no problem with the issue regarding AdWords employees having accounts. Hasn't really affected us yet. Or has it? Hard to tell but we aren't complaining yet.
It is real shocking to me why more people are not up in arms finding out google does not have a policy in place to prevent employees from having adwords accounts. Even the so called "experts" whom have mentioned this forum topic still don't get it. One "expert" (whom shall remain nameless) made some loose analogies stating this happens in any type of business. Frankly this is B.S. other businesses where this can happen do not have such low barriers to entry. Or have some type of policy in place to prevent this.
To tell you the truth I am very upset that G allows this. As such I guess G will be making about 1MIL less this year from me. I hope others follow my lead. We need to send G a message this will not be tolerated. Its not that I do not expect this to happen behind closed doors. Rouge G employee signs up an account in his aunts name and steals from me and others. However, G should at least discourage this through some type of policy.
If anyone does not see this as a BIG problem you have some serious problems yourself.
|As such I guess G will be making about 1MIL less this year from me. |
Chump change to them...
|made some loose analogies stating this happens in any type of business. |
I will admit I tried to make an analogy similar to that and it didn't come off sounding right. To use analogies on this issue is indeed useless, but that the method of debate is irrelevant to the issue itself.
|If anyone does not see this as a BIG problem you have some serious problems yourself. |
If you are chucking $1,000,000 a year into AdWords and not making some considerable profit then I think the problem lies elsewhere...
I would have to agree with the majority here, primarily because I worked for an internet company for many years and the fact is inside information definitely has advantage over the customer. Especially when the employee would also be competing with the customer! I really canít think of any other industry that provides for employees to be allowed to compete monetarily for financial gain with its own customers.
The fact simply put is in this particular case employees of Google have clear inside knowledge of the inner workings of their product and without question already have an advantage over the customer in a competition, now add financial gain to the equation and you have corruption.
The reason some are not up in arms and some are is obviously because they haven't been as adversely affected as most others have.
And since I am not eyeball deep in this yet I certainly am not going to be a lemming and follow everyone off the cliff, I for one am looking for alternatives with a more responsible company, they have been losing grown to other search engines for over a year now, sometimes it just takes a little thorn to take down the GIANT!
Does G offer part time jobs? I wouldn't mind working for them, just for a little while anyway ;o)
|Would Ebay allow insider bidding? |
Having dealt with ebay for some time, they do allow it though ebay employee accounts are clearly marked (they actually say they are an ebay employee).
I am loathe to point out that Google is less honorable than ebay, but there it is.
I would like to know if this also applies to AdSense accounts. (I'm assuming it does.)
Why am I not surpised by any of this?
It shocks me that Google allows its employees to compete with its customers. That employees may be competing with me is something I have often wondered: it may help explain why some ads appear able to flout Google's rules in ways I cannot, and why for some keywords my ads are so slow to be approved, and the approval criteria are not always made clear.
The possibility of use of commercially sensitive conversion data is one reason I have never used Google to track conversions, but I have found it odd how quickly one or two other advertisers pick up on unused keywords I have found.
There is a clear conflict of interest. Google ought at least to make their employee policy clear to all third party advertisers, together with details of their policing regime (if they have one). There was a time affiliates had to indicate their status on their ads - perhaps Google employees should now indicate theirs?
What would the reaction be if Google said they would themselves use PPC to compete directly with customers? Dismay, outrage, and reassessment I would guess. Google's employee activities may be less systematic, but there is little difference in principle.
Google has the option of fixing this situation now or before there is an uproar when knowledge of it becomes common amongst google advertisers.
Guess which I think is the best way to go...
I must say that I am not shocked by this one iota. I do think it is completely and utterly disgraceful but then I put morals before money.
I believe Google has expanded so quickly that it has never questioned itself on the morality of what it is doing.
It can be likened to a stock-market bubble. When it's rising people jump in - no questions asked. All they care about is the money. It's only when the market turns that people begin to complain and say, "Why didn't we ask those questions before?".
It's greed. Pure and simple. It's happened before. It's happening now. Those who are winning don't want to question it because while it continues they're doing rather well, thank you.
But on a slightly different tack, the really funny thing is that when Google comes out with Do No Evil people actually believe it. Baa baa.
The surprising thing is why are we not hearing any thing more from Google other than AWA saying that all employee accounts are monitored. I really feel that Google should come forward with more details about the restrictions on employee accounts. AWA any further details you can spare us and allow us to breathe a little bit more easy?
As long as this thread is alive, I think Google will have to respond to it officially in some shape or form, eventually. This is obviously a place where the "early adopters" of Google Adwords hang out, so the uproar isn't widespread yet.
When those of us who have our dirty hands in the gears of the Adwords machine get rowdy, that's one thing -- Google can afford to blow us off, for now. But when the companies who spend millions of dollars in click costs and thousands in agency fees get wind of it, that'll be a different story. Consider that despite the success of PPC, some of the richest businesses out there still don't quite grasp how it works. We've had scores of clients since 2002, and many still need LOTS of explanation of how the system works, and are distrustful to start. This will only make them more so.
That's awesome - Thank you
Even if it's not an exact model, it immediately helps the new user like me to quickly grasp the relationship between the input values and results.
But on the subject of insider bidding, I wonder if Google employees have a tool like that. Or maybe even a better one.
Glad you liked the tool. I don't know what Google people have as tools. What Google CAN provide users, but clearly do not, is a tool that shows how much your ad has to improve in CTR to move up one position, or how much it can move down in CTR before it moves down one position. If you go through the AdRank computation, the governing law is:
CPC[n] * CTR[n] = MaxCPC[n+1] * CTR[n+1] = AdRank[n+1]
(again, see [ontok.com...] for definitions) That is, you can measure AdRank[n+1] by measuring CPC[n] * CTR[n]. Most people I've gotten comments back from so far make the mistake of thinking AdRank[n+1] is *unestimatable* because MaxCPC[n+1] and CTR[n+1] are unknown. But AdRank[n+1] IS estimatable, and *useful* to estimate in order to show how much your ad's CTR has to improve, and/or how much your MaxCPC has to change. The AdRank computation is completely missing from Google's Traffic Estimator, intentionally/by design.
The startling thing that anyone who actually plays with the pricing tool for a bit learns is a few things:
- your CPC is a direct function of only 3 variables: CTR[n], MaxCPC[n+1], CTR[n+1]
- small changes in position result in massive changes in CPA
- any "dumb" advertiser who comes in and outbids you can change your CPC instantenously
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