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Would you pay to advertise if. ?

     
11:55 pm on Jun 7, 2013 (gmt 0)

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I'm debating whether or not to start an Ad campaign with AdWords just because our site gets very good adsense rates. But part of me thinks it's ridiculous. I'm paying for Adwords, just to get more from Adsense.

Since minimum bids for AdWords are still at 0.01 , wouldn't it make sense to advertise if the site in general gets good Adsense rates ?

0.01 would equal to $10 for a 1000 targetted visitors via AdWords.

Not revealing specifics....but we generally make over $20 for each 1000 visitors, just from people visiting the site. Not even making purchases. This rate is much higher than our other sites...mostly because most visitors come locally from a high economic geographic area. If the CPM rates weren't so high, I wouldn't even consider it.

Location , location, location seems to be everything though.

thoughts ?
12:47 am on June 8, 2013 (gmt 0)

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You mean, create more competition for your site and pump up the auction price?
12:59 am on June 8, 2013 (gmt 0)

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What you're talking about is called arbitrage. It used to be a great game, but Google doesn't like it.

You will most likely find that the next 1000 visitors convert much worse than your current visitors (e.g., much lower eCPM). You may also find that you'll have to end up paying more than the minimum bid to actually get clicks. You may also find that Google decides to permanently ban you from AdSense for doing this.
1:38 am on June 8, 2013 (gmt 0)

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>>and pump up the auction price?

yea, what's this auction stuff about lately. they change things ?

and Asia, it would seem ridiculous the thought of being banned for legitimately advertising on Adwords. If you were in the same shoes, you'd probably do the same thing.
2:06 am on June 8, 2013 (gmt 0)

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it would seem ridiculous

Would it? A user clicks on an ad to go to an arbitrage site, then clicks on another ad to go to another arbitrage site then clicks on another ad to finally get to a relevant site. That's not a good user experience and that's why Google discourages the practice and bans the worst offenders.
3:10 am on June 8, 2013 (gmt 0)

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What Mike is describing is not arbitrage, it's called shilling. To shill is to be a false bidder in an auction, whose purpose is not to actually buy a product but to raise the price of the final bid.

I believe that kind of activity is easy to spot and would get you banned from AdSense if it were caught.
5:00 am on June 8, 2013 (gmt 0)

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Interesting analysis's.

arbitrage and shilling.
5:49 am on June 8, 2013 (gmt 0)

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i don't see where the shill bidding comes in.
it's pure and simple arbitrage.
mike2010 is bidding for traffic in one market and getting paid for the eyeballs and/or clicks in another market.
the only reason it's a problem is that google owns both of those markets and doesn't like to be embarrassed by having inefficiencies in its markets exposed by publishers.
it's probably in the terms of service somewhere.
1:36 pm on June 8, 2013 (gmt 0)

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Perhaps Mike misunderstood my question or I misunderstood his answer. But Mike seems to have indicated he's bidding on ad space on his own site. That's shill bidding.
2:46 pm on June 8, 2013 (gmt 0)

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To shill is to be a false bidder in an auction, whose purpose is not to actually buy a product but to raise the price of the final bid.

That's not really going to work with AdWords. You raise the price, you get a click, you've then "bought" the product.

I still don't understand how you get pay Google $.01 for an ad to get to your site, yet Google is paying you much more for other ads in the same space. The math just doesn't work.

Now, if you're saying you can say Google is charging you $.01 to bid on "yellow widgets" to get to page about widgets that gets you $.10/click- that I could see.

Or if you're expecting to pay $.01/click for people to go to your page A, then hoping they'll then navigate to page B (where the ads are $.10/click), that's not arbitrage. But you'll also find that far less than 100% of the people going to page A find their way to page B and click on an ad.
3:01 pm on June 8, 2013 (gmt 0)

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You raise the price, you get a click, you've then "bought" the product.


For the purposes of example, in the simplest terms, the cost of a click is determined by competition. If the highest bid on your site is a nickel per click that's what it is. If another bidder bids a nickel then the first bidders cost may rise to six cents. If a third bidder enters she can cause the cost of a click to rise to seven cents.

That's in the simplest terms. Of course there are other factors determining the cost of the click, for example, the popularity of the ad (the more clicks it receives the lower the cost tends to go).

You don't necessarily have to "buy" the product if your bid is just enough to cause the algorithm to increase the bid price of the other bidders. That's in the simplest terms.

If an doesn't receive a click after it is shown then it's going to be dropped out of competition. So in reality, it's possible the scheme won't work. Whatever the case, it's a risky scheme because it's an attempt to defraud the advertisers.
3:03 pm on June 8, 2013 (gmt 0)

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>>I still don't understand how you get pay Google $.01 for an ad to
>>get to your site.yet Google is paying you much more for other ads
>>in the same space. The math just doesn't work.

If the price to bid on a particular keyword on AdWords is only $0.01 , I pay 0.01 to get that visitor, locally from the same market. (by specifying locally geographic visitors only)

vs.

The current rate advertisers are paying(adsense rates) to have their ads on our site. Basically the fixed price that's been established to advertisers on our site for months now. The Adwords rate has little to do with the Adsense rate, many other factors involved. For instance, some might only bid for search traffic only... others (with more money to spare) might have their ads on our site from 'run of the network' type campaigns. Displaying just relevant content ads. And others might be running on Adsense through 3rd party advertisers.


>>But Mike seems to have indicated he's bidding on ad space on his own site.

thought about. Not actually doing.

>>Whatever the case, it's a risky scheme because it's an attempt to
>>defraud the advertisers.

true, I could see it lowering the CPM rate in the long haul. My hunch is Google has safeguards automatically in place to prevent this, but if someone tries it out let us know.
5:59 pm on June 8, 2013 (gmt 0)

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What you're talking about is called arbitrage. It used to be a great game, but Google doesn't like it.

One part of Google doesn't like it. Another part of Google actually sends Adwords vouchers to Adsense publishers.

I used up my voucher, made a fraction of the face value on Adsense and decided that arbitrage was a non starter in my sector. But that you G for a few extra pennies.
1:17 pm on Oct 25, 2013 (gmt 0)

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Hey mike2010 you were getting some bad advice.

the replyer's don't understand what you are saying.


You have a site, that's earning good. You want to drive more traffic to your site. You can bid on Google Search on Keywords related to your niche and drive more traffic.

What you are doing is not against any TOS and is encouraged by Google.

Search CPC and Content Network CPC are totally separate.

I person can bid $0.01 for the keyword in search, but pay $1.00 on the content network depending on the niche. Some niches people don't buy on the incoming keyword, but buy after on the site about the keyword "Right Angle Marketing".

So what you are saying is a great way to increase your earning.

Also consider doing the same thing on Bing/Yahoo and other CPC engine you can buy traffic on.
8:50 am on Nov 10, 2013 (gmt 0)

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That's not really going to work with AdWords. You need to make money first, not spend money.
 

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