3 ms·
So what was the mistake? Why pay full price when it's worth the lower bid that would have won anyway?
by homero 8y ago
So what was the mistake? Why pay full price when it's worth the lower bid that would have won anyway?
- londons_explore 8y agoGoogles ad market is a 2nd price auction - ie. the winner of the auction pays the price of the runner up. Many auctions only have a single bidder, and in this case, the price is a 'reserve' price set by the publisher (website). That is common in ad slots which have strict targeting criteria banning nearly everyone else from being eligible. In those cases, often the advertiser sets a super high bid, just to make sure they win the auction. Assuming the eligibility criteria keep all other bidders out, that's not an issue. It looks like what happened here is the 'Yellow Ad' found a way to be eligible for far more auctions than normal, and had a very high bid. That meant it was now a 2nd bidder in lots of auctions where the price was normally set by the 'reserve' price, and the final hammer price was much higher.
- deckar01 8y agoThanks for the insight. I still don't fully understand the point of the article. It seems to be focused on publishers getting to keep the extra ad revenue. Does that mean the advertisers don't get a refund for their overpriced ads?
- erichurkman 8y agoI took it to mean that Google was covering the advertiser's cost to the publishers that showed the ad mistakenly.
- elliekelly 8y agoI read it that way too which was interesting to me. What about Google's actual clients: the advertisers who lost out on clicks/traffic because a fake ad took their place. I guess I'm surprised Google would bend over backwards to keep the platforms happy but shrug off the impact of the error on the people who ultimately pay them. Perhaps it's indicative of where the power lies in the internet advertising chain: whoever it is that can generate clicks.