[HN Gopher] How can we know if paid search advertising works? ___________________________________________________________________ How can we know if paid search advertising works? Author : ubac Score : 80 points Date : 2022-03-08 18:36 UTC (4 hours ago) (HTM) web link (causalinf.substack.com) (TXT) w3m dump (causalinf.substack.com) | skilled wrote: | Substack prefetching my email address based on historical data is | kind gross. | | I appreciate the downvotes, but it is a clear dark pattern. | Unless I have accepted their terms and didn't read through them. | It is the only site that does it, and they do it for everyone who | is a Substack customer. | ghostly_s wrote: | Unfortunately with the technical jargon compounded by numerous | typos I utterly failed to comprehend what points this article was | making. | VHRanger wrote: | FWIW this is a blog aimed at statisticians and economists, so | intermediate undergraduate statistics is more or less assumed | in the authors language | austincheney wrote: | Google does make money from ads, but that is not their primary | business. Yes they have AdWords and they bought DoubleClick | around 2007. They also have YouTube that took them forever to | figure out how to monetize. They bought Urchin (Google Analytics) | specifically to monetize AdWords. | | Google's primary business is search. They monetize search in a | couple different ways. The primary revenue model for search is | micro auctions to determine ranking of product placement on | search results. | | I don't have numbers but I suspect Google ads get far more | eyeballs than do their search results. The distinction though is | margin not quantity. Ads aren't worth very much. Google ads | generate a higher margin than Facebook ads but still tiny, like | maybe fractions of a penny. When I was at Travelocity a million | years ago I remember hotels bidding up to $18 per click for | placement on searches related to Las Vegas. Not only is that | click-through worth a fortune it is also relevant and thus far | more likely to be clicked. | | EDIT | | Death by a thousand paper cuts. | | Somebody provided a source below, they clearly did not read, | which explains all of this: | | https://www.cnbc.com/2021/05/18/how-does-google-make-money-a... | | > Search is Google's most lucrative unit. In 2020, the company | generated $104 billion in "search and other" revenues, making up | 71% of Google's ad revenue and 57% of Alphabet's total revenue. | | This section of the article further details how the auctions | differ from online advertisement products. | | I don't have the source but Google's chief economist has been | very clear about how the micro auctions work and generate revenue | separately from display ads. | xenomachina wrote: | > The primary revenue model for search is micro auctions to | determine ranking of product placement on search results. | | Google monetizes search with ads. The micro auctions are for | those ads. They even say "Ad" on each of them. | | If you have evidence that they're doing paid placement in the | actual search results, I'd love to see it. | | FWIW, I do wish Google's ads were more obviously visually | distinct from search results (and fewer in number). | kevin_thibedeau wrote: | They don't have to do paid placement. They know which sites | are running their ads and can prioritize them to maximize | impressions based on their pervasive tracking. | austincheney wrote: | > Google monetizes search with ads. | | Google monetizes search but not with Google ads. This is the | primary distinguisher. Its an auction selling space on page | for a supplier to provide their own textual content. Google's | online advertisement businesses don't sell space on Google | pages, but online ad products for other peoples' pages. | | Google considers all of this as ad revenue, but distinguishes | search from their advertisement products in their revenue | filings. | colinmhayes wrote: | >auction selling space on page for a supplier to provide | their own textual content | | This is an ad. | serial_dev wrote: | I don't understand what you are getting at. In both your | comments, it sounds like you find the most convoluted way | to describe "Ads", and then claim that because you didn't | use the word "Ad" in your comment, we should pretend that | what you described is something completely different (but | totally not ads?) | yjftsjthsd-h wrote: | https://www.investopedia.com/articles/markets/030416/googles... | and https://www.cnbc.com/2021/05/18/how-does-google-make- | money-a... (first results I could find) both say 80% of | Alphabet's revenue comes from Google ads; unless you have | numbers to say otherwise, I think it's pretty reasonable to | call that their primary business | austincheney wrote: | > Search is Google's most lucrative unit. In 2020, the | company generated $104 billion in "search and other" | revenues, making up 71% of Google's ad revenue and 57% of | Alphabet's total revenue. | | From your second source. I guess you were conflating ad | revenue to online advertisements. Its all ad revenue, but its | not all online advertisements. | [deleted] | _jal wrote: | > Google does make money from ads, but that is not their | primary business. | | Per their 10K, ads are >80% of their revenue. | | I'm sorry, carry on. | tsimionescu wrote: | Your point is completely unclear. The vast majority of Google's | money is coming from selling advertising. The have multiple | ways of selling advertising - advertising on Google Search | itself, advertising on other people's pages, advertising in | YouTube videos etc. But it's ultimately all money from | advertising. | tkluck wrote: | > Ads aren't worth very much. Google ads generate [...] maybe | fractions of a penny. | | Suppose someone types "hotel Paris" into a search engine. Then | the ads auction is the search engine turning around and saying | "here's someone that's (probably) about to spend a thousand | euros on _some_ website. How much if I send them to yours?" You | can't buy that kind of intent-to-buy for only pennies -- that's | 2-3 orders of magnitude off. | | There's definitely ads that are sold by the kilo-impressions, | but search ads generally do not fall in that category. | | Disclosure: I work for Google, but have no relevant inside | information. A public resource for this is | https://brandastic.com/blog/how-much-do-google-ads-cost/: | | > In 2022, the average Google AdWords cost per click is about | $1 to $2 on the Google Search network. Some newer niches may | still see lower costs, while more established businesses, might | see higher cost-per-click averages. | toast0 wrote: | > Google's primary business is search. They monetize search in | a couple different ways. The primary revenue model for search | is micro auctions to determine ranking of product placement on | search results. | | You're going to have to explain how product placement in search | isn't ads. | | I worked at Yahoo! Travel in the before times, so hello from a | fellow Travel industry person, I've got a Travelocity gnome in | my _stuff_ from work area. :) We had lots of advertising on our | pages too, but it was always clearly marked (for some value of | clearly); Yahoo! had done some pay for search ranking deals | long before I joined, but they were clearly frowned upon by the | time I was there; organic results had to be organic, although | certainly if an advertiser is pushing a hotel that 's going to | get traffic which could boost rankings (I don't think Y! Travel | included traffic in hotel rankings, but we didn't have a super | thorough data pipeline) | tantalor wrote: | > Google's search results are independent of Google's | advertising programs. | | https://support.google.com/google-ads/answer/1722080?hl=en | noasaservice wrote: | eBay did me a whole different dirty: | | I went to sell a few things 2mo ago. Sold them. And when the | buyers paid, it went to an ebay escrow. | | Only after I sold them, and money was sent, ebay DEMANDED | unfettered access to my checking/savings account. They would not | cut a check, pay to paypal, or any other method. One of their | managers said the only way I could get my money was to wait 1-3 | years and would send the money to federal unclaimed money (!). | | Obviously, I never sent them. I could never get the money. I | messaged to all the buyers that I could not fulfill any sales | BECAUSE ebay refused to send me my money in an appropriate | manner. | | All the sales fell through... And then ebay tried to lay on me | $50 in "sold fees". Talk about a double-whammy. I get if I got | paid, that they get their cut. But this whole checking acct | demand wasnt listed anywhere UNTIL the sales closed. | | After this, I'm done with the ever-closing noose around buyers | and sellers in the ebay ecosystem. I'm not going to get screwed. | And after talking with others who do buying/selling, everyone's | getting squeezed. Enough of that for me. | hollasch wrote: | Can you explain what you mean by "unfettered access"? | BizarroLand wrote: | They were uncomfortable giving ebay the ability to wire their | money into their checking account out of fear that ebay would | then later take money directly from their bank account, not | even considering that if ebay did anything fraudulent their | banks and the federal government (assuming they are American) | would have their backs in reclaiming the money. | Zircom wrote: | I think you're being incredibly dismissive and a little | condescending for no reason about his concerns, I'm sure | they "considered" that while yes there is legal recourse if | eBay were to take money out they weren't supposed to, the | process isn't a 100% guarantee by any means, and you're | still out that money while it's being | investigated/resolved. Not everyone is in the privileged | position of being able to float a couple thousand dollars | while an issue like this is being resolved. | noasaservice wrote: | I get that there are external costs for providing things | like cutting a check, or sending to paypal. | | If that's the case, then let me agree to paying 1% or so | to send via another method. I'm only asking for that | option. | | I don't allow any organization to reach into my bank | accounts using an ACH. Simply put - I work in IT, and | know that these systems have errors, and the errors are | almost always in their favor. And I'm on the hook for a | whole bunch of sadness waiting for them to "finish their | investigation 8 weeks from now". | | However, the biggest problem isn't that they demand this, | but they demanded this *after* I had 5 sales go through. | 6510 wrote: | You are already at their mercy. If they chose to take | money out of your account I'm sure they could do it in | ways legal enough to get away with. | MaxBarraclough wrote: | The existence of a means of recourse doesn't undermine the | point that they don't want eBay to have that power over | their finances in the first place. Would you want your | landlord to have unrestricted access (but for the law) to | your finances? How about your neighbour? | | By means of analogy: the utility of Android's fine-grain | app permissions system is not rendered obsolete by data- | protection laws. | | It's especially galling as eBay could, presumably, just | offer to wire the money over after enough time had passed | that the buyer can't complain that the item didn't arrive | as described. (This would cut out PayPal and card- | transaction fees, which is presumably the whole point.) | They choose not to offer this. | runnerup wrote: | I can sympathize. I'd rather not fight that legal fight in | the first place if I can avoid it. Plus I'm not a lawyer, | and the Terms of Service are a thousand pages long. Am I | entitled to small claims court or did I sign away that | right and have to go to their arbitration firm? I'm not | sure if the agreements I clicked through could say "I | forfeit my right to any money and every dispute will be | decided solely by eBay, Inc." and if it does I haven't read | the thousands of pages of case law necessary to know in | which situations that's invalid and I do still have some | rights. | | I'd rather just not play ball. Especially given that eBay | harassed people who inconvenienced their business with | bloody pig masks, live cockroaches, and death threats | against the spouse[0]. | | 0: https://arstechnica.com/tech-policy/2020/06/ebay-execs- | sent-... | davchana wrote: | In US that means routing number and account number. Having | these two enables anybody to push or pull any amount of money | (or at least try to pull, based on availability). Its crazy, | companies promise that they will not pull more than asked, | but sometimes coding error causes big problems, the one I | remember etsy pulling thousands instead of 10s, because of a | decimal point error, so pulling like 1486 instead of 14.86. | bthrn wrote: | This information is on the bottom of every paper check. | While it is probably not advisable to broadcast and post up | everywhere, it is not supposed to be a secret. | jazzyjackson wrote: | Right, its security by deterrence. Besides its not like | you can anonymously drain someones bank account, someone | claims fraud on your 10,000$ charge you're getting a | phone call from your bank. | runnerup wrote: | He probably means ACH access which can also be used for | withdrawals instead of just deposits. Its not like writing | and accepting a check or money order, which is generally only | one-way. While there are some limits on this for "direct | deposit" (can not withdraw more than was deposited, and | there's a 5 day limit, so its functionally equivalent to | bouncing a check but without the legal penalties), not all | access to set to strictly "direct deposit". I don't know what | eBay is doing but its possible to get authorization for both | "direct deposits" and "withdrawals". ACH withdrawal is useful | for things like Coinbase or PayPal where you want to pay | electronically and trust is too low to risk credit card | chargebacks. | bthrn wrote: | In my experience, the payment system is pretty reasonable. And | I get the funds faster directly from eBay than going eBay -> | PayPal -> bank. | | PayPal would ultimately require your checking account | information too, assuming that you want the funds to end up | there. I'm not sure why eBay having that information poses any | more of a problem than PayPal having it does. | | And this payment delay is likely due to having to wait for | credit card payments to process and settle. I don't think eBay | is doing anything nefarious, here. | | Lastly -- if you are concerned about banking info being | disclosed, or eBay maybe messing something up and taking money, | you could set up a separate checking account that you only use | to hook up to online places like Coinbase, PayPal, Venmo, eBay, | etc. that you use as a proxy to transfer into your "real" | checking account. | vgeek wrote: | The article fails to mention that shortly after this made the | rounds in the marketing communities, eBay suddenly got a very | large SEO penalty. Conspiracy theories aside, I once inherited a | large Adwords account with nearly 25% of spend dedicated to | branded KW bidding. Simply dialing back bids by 90%+ dropped | impression share from 95% to 80%, but the paid branded clicks | just shifted to organic branded clicks-- confirmed by lining up | Google Webmaster Tools click level data (since Google stopped | providing organic keyword data in GA 10 years ago). | | _Brand keyword bidding is simply a rent-seeking behavior._ Sure, | it can help with new entrants trying to grow their visibility | (albeit likely ineffectively) as an alternative to an incumbent | with more brand recognition, but the majority of brands are | simply paying protection money to keep their own site, that users | are explicitly seeking, above the fold on search results. | JustARandomGuy wrote: | _> that shortly after this made the rounds in the marketing | communities_ | | I'd love to read more about this. Do you have any recommended | "marketing communities" that I should visit? | vgeek wrote: | https://searchengineland.com/google-ebay-penalty-cost-197031 | | This relates to the ebay penalty. I think one of SEland's | founders actually left to take a job at Google as an | evangelist. You can probably search for "ebay seo penalty" | and find more references. Other notable penalties that were | well documented include RapGenius and GV backed Thumbtack and | Nest, which quickly had their penalties reversed if I recall | correctly. | | https://seobook.com/blog is the only place I follow any more, | since it is more critical of the digital marketing ecosystem. | There are so many snake oil salespeople and clueless | marketers, so this is a refreshing commentary. | | https://seroundtable.com is good for rumors and breaking | news. | | https://www.seobythesea.com/ a more technical blog that | frequently examines Google's patents. | JustARandomGuy wrote: | Very kind of you. Thanks. | tempestn wrote: | We've found exactly the same thing. It's extremely important to | differentiate between branded and non-branded keywords. (And to | be diligent about filtering out all variations, misspellings, | etc., of branded searches from non-branded campaigns.) While | our testing didn't show 100% waste in branded advertising, we | did find approximately 80-90% of branded clicks would otherwise | have come through organically. So we do still do a small amount | of branded search advertising, but with an assumed actual CPC | of 10x the nominal CPC (and therefore quite a low maximum bid). | For non-branded ads, we assume the true CPC is much closer to | the apparent one. | paulpauper wrote: | I believe spending money on ads is the only way to get any sort | of favoritism from a major tech company, and also being a | famous/important person | ocdtrekkie wrote: | Yeah, once you realize the most profitable Google search terms | are already the top organic result paying to be on top, you | realize Google's business is the guy who shakes down | storefronts for "protection" to avoid their windows being | broken in by the local gang on a global scale. | | _" That's a nice brand you built there. Ya know, it'd be a | shame, a real shame, if one of your competitors was to end up | above you on the search results page. I could, uh, make sure | that doesn't happen."_ ___________________________________________________________________ (page generated 2022-03-08 23:00 UTC)