search-engine-advertising - Search engine advertising Hal...

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SIMS Search engine advertising Hal Varian
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SIMS Online advertising • Banner ads (Doubleclick) – Standardized ad shapes with images – Loosely related to content • Context linked ads (Google AdSense) – Related to content on page • Search linked ads (Google Adwords) – Related to search terms
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SIMS Examples banner ad Content ads
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SIMS Search ads Search results Promoted ad RHS ads
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SIMS Search linked advertising • High relevance • Results in very good performance in cost-per- acquisition (adv expenditure per sale) • Rapid growth but still small part of advertising market – Total US adv spend ~ $220 billion, growth ~ 1-2% per year – Online advertising: ~ $10 billion, growth ~ 26% last year
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SIMS Advertising spend Morgan- Media Stanley 04 Metrics 04 Newspapers 65 57 Direct Mail 51 51 Broadcast TV 45 43 Radio 20 19 Cable TV 18 17 Magazine 21 12 Yellow P ages 15 Internet 10 9.6 TOTAL 245 209
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SIMS Stock market valuation of Google
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SIMS How does Google work? • Advertiser bids on search terms – Can use “Traffic Estimator” to see how many clicks they will get – Can choose “exact” or “broad” match • Ordering – Overture: high bidder gets first position, 2 nd highest bidder second position, and so on, with exact match first. – Google: rank by bid x predicted CTR. Puts best ads on top of page.
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SIMS Aligning incentives • Google sells ad impressions (views) • Seller generally wants clicks and ultimately conversions (purchases) – Rank ads by how much advertisers are willing to bid for impressions – Value/click * clicks/impr = value/impr – Disable added if there are too few clicks per impression (CTR)
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SIMS How do you estimate pCTR? • Basic
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This note was uploaded on 09/03/2011 for the course SIMS 141 taught by Professor Staff during the Spring '11 term at University of California, Berkeley.

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search-engine-advertising - Search engine advertising Hal...

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