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AdWords:What Google Isn’t Telling You?
来源：http://www.training163.com/personal/tina/article_show.asp?id=399
Brandweek, by Simon Galbraith
Advertising has always been a murky business. Back in the ole days when print ruled, it was difficult to trace the impact of your ads. In the Internet world, banner ads haven’t proven to be much better. Sure, you can measure click-throughs, but how qualified are these people clicking through?
To the rescue comes Google AdWords, the system introduced in 2000 by which advertisers choose keywords and keyword phrase that, when typed into Google’s search bar, prompt their ads to appear with the search results. AdWords promises a new transparency in online advertising. There’s no minimum monthly charge; advertisers pay only when online users click on their ads. It sounds so promising, so simple.
It’s not.
Today, millions of companies use AdWords, but only Google fully understands how the setup works. The risk is, as with most things we don’t understand, we have the tendency to simply let it manage itself. There’s no question that such a laissez-faire approach applies to AdWords: In a recent survey by Software vendors consider AdWords their most important marketing medium-but 80% spend less than one day per month managing their accounts.
Shouldn’t advertisers try to better understand how they’re spending so much of their marketing dollars?
Facts and Fallacies
Reduced to its fundamentals, AdWords is an opportunity to buy advertising that’s placed adjacent to search results and relevant third-party Web pages. As most people in the online-marketing world know, when a search takes place with a keyword relevant to their customers, they have an opportunity to show them an ad. This is a very powerful form of marketing because you, as an advertiser, are presenting your ads to people who have an immediate problem for which your company, presumably, has a solution.
Here are some key assumptions people make about how AdWords works:
n If you bid more than other advertisers, your ad will be placed at the top of the page.
n If someone ad, pointing to the same page, with the same bid, will be displayed in the same place-irrespective of who placed it.
n Provided that Google doesn’t warn you about the bid being too low, your ad will be shown to people searching for your keyword.
n If Google gives you a cost per conversion, it’s an accurate figure.
Now: Can you guess what these assumptions have in common? Most of them are wildly incorrect.
Some Laws to Obey
To truly understand Google AdWords, you need to adjust your reasoning. Think about why it does what it does. The reason is summarized by Galbraith’s First Lao of Google AdWords.
Google AdWords seeks to maximize the value of its inventory over the long term.
For an individual search, Google presents its inventory: what it deems to be the best results pertaining to that term that can be culled from the Web. In the sponsored-links section, however, AdWords shows the advertisements that will maximize Google’s financial yield from that page. This arrangement is very different from the assumption that if you bid the most, you come out on top. In fact, Google displays ads in the order that will earn the most money for Google, not in descending order of the amount that was bid.
Let’s take a situation where there are four competing advertisers, as shown in the table at the bottom of this page.
If you ranked these advertisers according to the highest bids, you would present the ads in the order: A, B, C and D. But were you to rank them in the order of Google’s yield, the order becomes: C, B, A and D.
Got that? Good-because things are about to get more complicated. It’s critical to understand that the yield for a page may be improved if the number of advertisements displayed there is reduced or increased. So, in our example, because Company D’s ad might distract visitors from the higher-yielding ads (hence lowering the overall yield of the page for Google), Company D’s might not show up at all.
In this example I’ve presented the yield as a known fact. Actually, of course, yield is not known until after the event; Google’s engineers work endlessly on the challenge of predicting and maximizing that yield.
Which brings us to Galbraith’s Second Law of Google AdWords?
Google AdWords will use all the information at its disposal to satisfy Galbraith’s First Law in the long term.
Calculating the maximum yield for a page is an endlessly complex task for Google, whose worker bees contend with a huge number of variables, including:
n Search history of the searcher
n Location of the searcher
n Location of the advertiser
n Previous performance of advertisers
n Previous performance of advertisements
n Match of advertisements to search term
n Match of pages to be visited to search term
n Numbers of ads available to be shown
n Quality of nonadvertising results
n Behavior of advertisers when their ads are shown
n Behavior of advertisers when their ads aren’t shown
n Time of day
This entire body of variables can be considered information at Google’s disposal; even if it isn’t used now, it will be in the future, Google retains incredibly brainy people and enormous computing power to continuously mine this information and build models for predicting searcher behavior. It then experiments constantly with its algorithms and models to make improvements to the yield.
You’ve probably noticed that both of my laws use the phrase “long term,” which is key to deciphering the way AdWords operates. There are numerous ways in which such long-term thinking influences the way AdWords behaves.
The best example of this strategy is Google’s use of a second-price auction to determine the price you, as an advertiser, pay when a searcher clicks on your ad. With this approach, you pay the price that the next-highest bidder was prepared to pay.
Please refer back to the chart on page 16 and I will explain. If Company A is bidding ＄20 and Company B is bidding ＄10, then Company A pays ＄10 for anyone clicking on its ad. While this arrangement seems counterintuitive, in the long term it yields Google more money due in part to more stable pricing and higher levels of advertiser confidence.
We can see another example of Google’s long-term thinking in the time delays that make it nearly impossible to work out what others are bidding. Although the delay tactic reduces short-term “I’ll-pay-more-than-you” revenue and can be frustrating for advertisers, it lowers volatility and reduces the chances of advertisers gaming the system. It’s also a fine way for Google to up its long-term revenue.
The payoff patience
Although it’s tempting to use tricks that might circumvent the AdWords system in the short term, ultimately these tricks will probably backfire and only damage you for having attempted them. And that brings us to Galbraith’s Third and Final Law of AdWords:
Focus all your energies on helping searchers solve their problems and be prepared to pay what it is worth to you to do so.
This, of course, is the essence of marketing, and it requires extensive, ongoing effort to know your customers intimately. If your ad link takes searchers to a page that really answers their questions; if you experiment endlessly to improve in every area of your process; and if you are patient enough to wait for benefits that may not be immediate, you’ll be using AdWords in a way that actually gets you somewhere.
In other words, if you counter AdWords’s long-term reasoning with some of your own, you’ll be doing more than just helping Google with its revenue; you can actually use it to generate your own.
Copied from MarketingChina
来源：http://www.training163.com/personal/tina/article_show.asp?id=399
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