The following video from by Hal Varian, Google's Chief Economist, is a must watch video for anyone who wants to understand how Google decides which ads to display for any given keyword, what order the ads are displayed in, and how much an advertiser pays.
A quick summary:
The Auction - Every time someone searches for a keyword, an instantaneous auction occurs among the possible advertisers. Advertisers are initially ranked based on their maximum bid prices for the keyword in question.
Quality Score - Google looks at the historic click-thru rate, ad relevance and landing page relevance to determine a quality score for the possible ads in the auction.
Ad Rank - Google multiples the maximum bids prices by the quality score to determine an Ad Rank for each possible ad in the auction, this rank determines which order the ads will display in.
Final Price - To determine how much the advertiser will pay per click, Google divides the Ad Rank of ad below the current ad (or the minimum price set for the auction of there are now ads lower) and divides that Ad Rank by the current ads Quality Score to determine the actual click price.
The one thing I would have liked to have seen him explain is the Pre-Auction where Google looks at ads with the same display URL to determine which one of those ads will get to compete in the auction. This "pre-auction" actually occurs after Ad Ranks have been assigned, and then all ads with the same display URL are compared to each other, and the ad with the highest Ad Rank get's displayed, and the others get dropped. This insures that the ads with the same display URLs do not affect the Final Price per click paid.
In case you missed it, Tony recently presented a session entitled "Affiliates & Internal Search: Recipe for Disaster?" at Affiliate Summit in Las Vegas. The Audio of that presentation is available. Have a listen and let us know what you think!
We have just launched a new website called tripzam.com. Tripzam is a top brand travel destination site. Our goal with tripzam is to create top quality travel micro-sites promoting the properties and services of some of our travel partners.
With search engines constantly changing the way they treat and award quality scores to landing pages, tripzam is one of our first tests in creating a more targeted vertical collection of microsites that we can use to promote our clients via pa-per-click search engine marketing while continuing to focus on the brands our our clients as opposed to creating comparison sites that promote competitor's offerings on the search advertising landing pages.
If you run a leading brand travel affiliate program and would like to discuss the tripzam opportunity, please email Andre Colantuono - andre(at)imwave.com.
We have recently made some updates to the affiliate aim list and affiliate twit list!
For the affiliate aim list we have added "enhanced listings" for $19.99 / quarter. With an enhanced listing you get your listing highlighted in yellow, and get a clickable link to your website. The aimlist currently has over 700 members and received an average of 11,222 page views per month in 2008.
After a slow start and problems displaying the tweets of the affiliate twit list members, we have finally gotten a good script and site layout going. Now you can follow what members of the list are saying on-line. If you haven't visited the Affiliate Twit List in a while, we hope you will take another look! To get on the list, sent a public tweet to @afftwitlist with your full name and company name and we will do the rest. 70 members and growing!
Reston, VA – November 7, 2008 – imwave, inc. announced today that they have acquired move marketing’s performance search marketing business. imwave will immediately take over all of move marketing’s advertiser relationships and search engine marketing campaigns. Andre Colantuono, move marketing’s business development Director, will join imwave as the director of business development.
“Both imwave and move marketing have worked hard to build reputations as leading paid search marketing affiliates in the industry,” says Adam Viener, chairman and founder of imwave. “We believe that this acquisition clearly solidifies our position as one of the largest super affiliates in the industry focused on paid search engine marketing.”
“We are excited to have Andre Colantuono joining our team,” says Tony Pantano, CEO of imwave, “Being successful in this industry is primarily about building and maintaining successful long-term publisher / advertiser relationships. Andre has been instrumental in building the relationships that have led to move marketing’s success and will be an important member of our team going forward.”
imwave, inc. is one of the leading performance search marketing companies in the industry focusing primarily on building and launching effective pay-per-click search engine keyword marketing campaigns for companies paying affiliate commissions on sales and leads generated. As of September of 2008, imwave announced they had served over 2 billion ads for their clients through Google alone.
I was looking over my Google Stats today an noticed that we have reached a major milestone, we recently served up our 2 Billionth Ad on Google!!!
Since starting IMWave we have displayed over 2 Billion Ads through Google Adwords, received almost 25 Million clicks on those ads at a cost of just over $2.5 Million.
Google sent us a refrigerator when we had served over 1 million ads, I wonder what 2 Billion should get us?
So, let me first say that the first and only Apple product that I would concede to owning was an iPod. Once I got over my initial "Oh, my God I bought an Apple product" shock, I began to realize that they really had put together a nice interface. This was the beginning of my journey to the dark side.
When the first iPhone came out, the hype was just too much for me to take. Thank you very much, but I would just keep my Palm Treo 680. Palm was not my first choice. My previous phone ran Windows Mobile , but it was an older version. It was slow and had some bugs, so I was talked into buying the Treo.
Fast Forward two years and the only way I can describe my feeling for the Treo is complete disdain. It's an awful piece of technology and would be better under the tire of my car than in my pocket, pretending to be a phone (and a "smartphone" at that.)
Frequent reboots, dropped calls, not ringing when calls would come in … you name it. Along comes the iPhone 3G. I took another look at my iPod and thought, "How bad could this be?" I went to the AT&T store to look at the iPhone demo and thought, "I'm going to hate this." I wandered over to the AT&T Tilt display and considered going back to Windows Mobile. I read the reviews and even had a friend stop by my office to let me see her iPhone in action. "I'm going to hate this," I thought again, but what the heck, I can always get a new phone if this one sucks, right? So I ordered a 16GB, black, iPhone 3G.
This was two weeks ago and all I can say is: My journey to the dark side is now complete.
The iPhone is frankly the best phone I have ever owned. Let me give you a few reasons why:
Phone: As a phone, the iPhone doesn't drop calls like the Treo did. The calls are clear and best of all it actually rings when a call comes in. I know what you're saying, "A phone should do that." Well I agree. But it was hit or miss with the Treo.
E-mail: I use Exchange for work. In order to use Exchange in push mode on the Treo my provider had me install GoodLink. Once I did this, the Treo was never the same. E-mail was OK, but the additional software caused all sorts of problems. On the iPhone, Exchange was a breeze to setup. It took about three minutes, tops, and that was only because I wasn't used to the touch screen yet. The ActiveSync with Exchange has been flawless and seamless.
Contacts: This really goes along with No. 2 except that the Palm version of the contact screen gets replaced when you install GoodLink contacts and simple things like custom ringtones for contacts goes away. Also, there are many more fields for data on the iPhone than on the Treo.
Web browsing: I use my phone quite a bit for work and having the Web available isn't just a luxury, it's a necessity. The browser on the Palm was slow and completely dysfunctional. In fact, I just stopped using it, rather than beat my head against the wall. The Web on the iPhone is, well, it's the Web. I can login to most sites, though it doesn't support Flash yet.
Screen: Do I really have to say it? Just look at picture of the two phones. The iPhone's screen is huge compared the Treo and the resolution is awesome.
iPod: No more carrying my phone and my iPod when I travel. I know I only have 16GB on the phone, but really I just need some tunes and a movie or two to get me through the flight. One device is much better than two, right?
Bluetooth: I think it's a travesty that Treo claims to have Bluetooth support. It was a horrible implementation and often would not sync in my car or worse, wouldn't "un-sync" when I left the car. So once again, I just disabled it. On the iPhone, I didn't even have to set anything up. I just turned it on and it syncs every time. Works like a dream.
If there is anything you need/want that doesn't come with iPhone, it's more than likely that you will be able to find it in the App Store. Mixed in among all the time-wasters like Bubble Wrap and Scribble, there are some real gems -- like TypePad . And I haven't even scratched the surface on this yet.
I will say that the battery life on the iPhone is short. Mine lasts about a day. For me, I was used to charging my Treo every night, so this is no better, no worse for me. But if you charge your phone once a week, then this may be a pain for you. Also, the keyboard does take some getting used to, but if you can manage the Treo you will get the hang of the iPhone touch screen pretty quickly.
My journey to the dark side is indeed complete.
I am now a huge fan of the iPhone and take the opportunity to show it off when I can.
As for my Treo, if you happen to be in York, PA and see one smashed in the middle of either Interstate 83 or Route 30, it's probably mine. Please feel free to run over it again ;-)
Tony Pantano is chief executive officer of imwave, an Internet marketing company based in York, PA.
We have started working on a new site called FreeTrialWorld.com, where we will highlight partners that offer Free Trials. Once we have built up enough trials and some organic rankings we will start doing PPC campaigns to this site.
If you are one of our partner companies, and wish to be added to this site, please email us and let us know. All we need is a decent landing page highlighting your free trial, or a large ad that we can use for a page. Review the other Free Trials that are online for examples:
Today we launched our first Beta version of DealZam.com!
We have been working on DealZam for a while now, and are happy to get our first beta version out into the public and get some real user feedback. Please let us know what you think of the site and what features you would like to see in the added in the future. This site is a work in progress, so please be kind. :-)
Advertising Age recently put out an interesting article where they suggest that the current cost-based compensation model that exists between advertisers and advertising agencies is flawed and provides the wrong incentives, further suggesting that a value based model is needed.
"The current cost-based compensation model for advertising agencies is flawed for a simple reason: It misaligns the economic incentives on each side. The client pays whether the agency adds value or not, and the agency is paid a fixed amount regardless of the value it creates. Clearly, this model is not in the best interests of the client or the agency."
"Even more perniciously, the existing compensation model focuses entirely on the wrong things: efforts, activities and costs. It does this at the expense of the right things: output, results and value. "
The article goes on to suggest that one of the main factors keeping advertising agencies from moving to this type of model is the lack of information and trust on value based metrics as well as control over the value creation process.
Hello? Welcome to the world of affiliate / performance based marketing. Those of us in the industry have been doing this years!
It works like this, Top Affiliates, call them Online Advertising Agencies, decide who they are going to create a value based relationship with, then they spend their time, efforts, and dollars to promote these advertises on pre-agreed terms which are managed by affiliate networks, a 3rd party that both the advertiser and marketer trust to manage the technology that facilitates the relationships and track the results. Special links from these networks are used in ads created by the "performance agenecies" to track the results.
It seems hard to believe when such an efficient model exists, that companies continue to rely on individual ad agencies and pay them on a percentage of ad-spend basis. Hire an army of performance marketers with a great affiliate program, preferred compensations and terms for top performers.
Ask your advertising agency to spend THEIR money on the marketing campaigns and pay them based on their results, let THEM put their money where their mouth is, just like we do every day.
Bottom line. Top Affiliates are the advertising agencies of the future.
Results, Results, Results.
The only companies that should need to hire cost-based advertising help are those that a focused on none performance based brand advertising or are just starting up and need help being able to convert the traffic at a level where performance based affiliates make sense.
