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It's kind of a clever solution by Google, if a bit troll. They can make that ad auction 100% fair and still win it because they have more expertise on running e

It's kind of a clever solution by Google, if a bit troll. They can make that ad auction 100% fair and still win it because they have more expertise on running efficient ad campaigns than anyone. IMHO that just doubles down on the danger of their monopoly power, but perhaps it complies with the antitrust requirements.

londons_explore 9y ago
Most importantly they have more information about each auction than their competitors. They know for each user every other search result clicked. They know what the users interests are. They know which users prefer stuff delivered fast, which prefer the cheapest items, and which will be wooed by 50% off deals. They can use that data to present the best possible results, get the highest click through rate, and sell the most products. Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown.
- kyrra 9y ago
  Ad auctions have 100ms to reply to an auction request.[0] This does not give you a lot of time to display the perfect ad for a given customer or search. Especially when you need to do this at the volume that Google shoes ads. [0] https://www.quora.com/How-do-ad-exchanges-and-real-time-bidding-platforms-work https://www.quora.com/How-do-ad-exchanges-and-real-time-bidd...
  - tallanvor 9y ago
    That's unlikely how it actually works on Google's site. Google doesn't have to connect to an advertiser's network, they already have the ad information and all targeting and bidding information, so they can mostly compute the results ahead of time and only do last minute checks for winners based on, for example, whether the most likely winners have exceeded daily limits and such.
- bonesss 9y ago
  > Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown. Isn't this fundamentally an argument to outsource a greater portion of ad creation and campaigns, or parts thereof, to Google? Google isn't just the best ad platform, it's likely the smartest user of that ad platform, and has the automation/ML chops to be the fastest and most competent user of that platform.... To my business eyes that sounds like a company that can offer services deeper into the advertising value chain than 'just' hosting the ad-canvas. On the flip side, even as the #1 advertising company in the world it's still darned hard for Google to be the #1 Shoe Manufacturing company in the world at the same time. If that dynamic holds then Googles growth in this area should be a massive threat to advertising agencies to the collective benefit of businesses in the rest of the market who can leverage their services more efficiently, n'est pas?
  - Eridrus 9y ago
    I think Google is only a threat to ad agencies that are hyper focussed on dealing with the tech bits, Google has little interest in managing ad (creative) creation, or your Facebook, TV etc advertising.

londons_explore 9y ago

Most importantly they have more information about each auction than their competitors. They know for each user every other search result clicked. They know what the users interests are. They know which users prefer stuff delivered fast, which prefer the cheapest items, and which will be wooed by 50% off deals. They can use that data to present the best possible results, get the highest click through rate, and sell the most products. Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown.

kyrra 9y ago
Ad auctions have 100ms to reply to an auction request.[0] This does not give you a lot of time to display the perfect ad for a given customer or search. Especially when you need to do this at the volume that Google shoes ads. [0] https://www.quora.com/How-do-ad-exchanges-and-real-time-bidding-platforms-work https://www.quora.com/How-do-ad-exchanges-and-real-time-bidd...
- tallanvor 9y ago
  That's unlikely how it actually works on Google's site. Google doesn't have to connect to an advertiser's network, they already have the ad information and all targeting and bidding information, so they can mostly compute the results ahead of time and only do last minute checks for winners based on, for example, whether the most likely winners have exceeded daily limits and such.
bonesss 9y ago
> Therefore they can afford to pay more for the ad spots than someone without that data, who gets less precisely targeted ads, and fewer product sales per advertisement shown. Isn't this fundamentally an argument to outsource a greater portion of ad creation and campaigns, or parts thereof, to Google? Google isn't just the best ad platform, it's likely the smartest user of that ad platform, and has the automation/ML chops to be the fastest and most competent user of that platform.... To my business eyes that sounds like a company that can offer services deeper into the advertising value chain than 'just' hosting the ad-canvas. On the flip side, even as the #1 advertising company in the world it's still darned hard for Google to be the #1 Shoe Manufacturing company in the world at the same time. If that dynamic holds then Googles growth in this area should be a massive threat to advertising agencies to the collective benefit of businesses in the rest of the market who can leverage their services more efficiently, n'est pas?
- Eridrus 9y ago
  I think Google is only a threat to ad agencies that are hyper focussed on dealing with the tech bits, Google has little interest in managing ad (creative) creation, or your Facebook, TV etc advertising.