• ---- Earning dropping...and dropping...and dropping

loanuniverse - 8:45 pm on Dec 19, 2003 (gmt 0)

 Why would Google give better-paying ads to large corporate partners? If the megasites get a bigger revenue cut than mom-and-pop sites (a not unreasonable assumption), then it would make sense for Google to do the opposite of what you believe: i.e., Google could be expected to serve its highest-paying ads on mom-and-pop sites.

Ok let me disagree here, lets imagine the following scenario:

Inventory:
\$20 million for “high-PPC” words costing an average of \$1 each. {20 million clicks}
\$20 million for “low-PPC” words costing an average of \$0.10 each, {200 million clicks}
On any given period you get 10 million clicks with 8 million coming from the Megasites and 2 million coming from Mom & Pops.

If you distribute them evenly and there is an equal chance of click through from both “high-PPC” and “low-PPC” then you will get \$5,500,000 from them. You will get \$5,000,000 from the “high-PPC” and \$500,000 from the “low-PPC”.

If you change it so that the Megasites get 80% of the time the “high-PPC” keywords so that you can switch the probability of a click coming from those sites be a “high-PPC” click then you get the following:

From the Megasites: 6.4 million clicks at \$1 a pop + 1.6 million clicks at \$0.10 a pop = \$6,560,000 ”This alone is more than what you were doing on the previous scenario”

This does not mean that I think Google is doing something similar, it just means that I have been working 5 hours straight while most people are out of the office taking vacation, and I am bored