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> I’ve advertised for low frequency terms where the minimum bid is $1 even though there’s only 1 or zero current advertisers. So the “auction” is against a floo

by jefftk 6y ago

> I’ve advertised for low frequency terms where the minimum bid is $1 even though there’s only 1 or zero current advertisers. So the “auction” is against a floor set by google, not the market. Showing excessive ads wastes users' attention and teaches them not to pay attention to other higher value ads. A price floor seems like a very reasonable way to handle this? (Disclosure: I work for Google, speaking only for myself)

prepend 6y ago
First, it’s funny that you think Google cares about wasting user attention. Have you seen the search interface. Second, when there’s a single ad shown and the floor is $1 or $2 or $3 even that makes no sense. Having no bidders with a floor and a single ad vs 2 or 3 is done for a single reason- revenue. Any customer benefit from missed ads is wiped out by wasted costs. It’s rent seeking because Google has a search monopoly.
- jefftk 6y ago
  > when there’s a single ad shown and the floor is $1 or $2 or $3 even that makes no sense. Having no bidders with a floor and a single ad vs 2 or 3 is done for a single reason- revenue. Any customer benefit from missed ads is wiped out by wasted costs. It’s rent seeking because Google has a search monopoly. I'm not sure I understand what your objection is. It sounds like you're saying that you'd like Google to remove price floors and show many more ads? Is that right? What do you mean by "wasted costs"?
  - prepend 6y ago
    Every single search I run has ads. I’m not sure how Google can run more. But what I’m saying is that if there’s only a single ad and they are paying $3 because google set that limit, they could lower that to what the market will bear and start at .05 or something. If they are worried about ad space they can limit to 1-2 ads and let people bid on them. They already do this as there’s not an infinite scroll of ads, they only show 1-3 and then more on the next page. Setting floors on ads doesn’t reduce the number of ads I see, it just makes more money for Google. This is only possible as they are a monopoly.
    - jefftk 6y ago
      > Every single search I run has ads. Really? If you go to https://myactivity.google.com/item?product=19 https://myactivity.google.com/item?product=19 you should be able to see all your recent google searches. Here are my queries today: * myactivity * somerville trick or treating 2020 * Lilywise dinner * jefftk mask usage * How far around the world is it at the longitude of NYC * wbz coverage map * wbur coverage map * wbz frequency * radio station coverage area * us radio station map * time zones * telegraph * atlas of the historical geography of the united states * isochrone * travel time from dc to nyc historically * nyc longitude and latitude * philly longitude and latitude * dc longitude and latitude * wikipedia time zones * wikipedia solar time * fivethirtyeight * who won the debate Going back and searching these again, only "atlas of the historical geography of the united states" showed ads. > I’m saying is that if there’s only a single ad and they are paying $3 because google set that limit, they could lower that to what the market will bear and start at .05 or something. If they did that, then every query would have an ad at the top, generally a pretty irrelevant one. People would learn to ignore the ads. This would then make ads on searches like "buy insurance" much less valuable. > Setting floors on ads doesn’t reduce the number of ads I see Huh? Of course it does. If you set a floor, some bids are going to be below the floor. For some queries, in my experience a large majority, all bids are going to be below the floor and you see no ads. > This is only possible as they are a monopoly. This has nothing to do with whether Google is or isn't a monopoly. Even a very small search engine would make this kind of tradeoff, choosing not to annoy users with low value ads. Similarly, if you try these searches on Bing or DDG (which both show ads from Microsoft Ads) you will see they are using the same approach, with many ads on highly commercial queries and no ads on most queries. They even published a paper about it: https://www.microsoft.com/en-us/research/wp-content/uploads/2016/02/RankingPaper20EC20version.pdf https://www.microsoft.com/en-us/research/wp-content/uploads/...
- nerfhammer 6y ago
  If there were no reserve price there would be eight ads on every single search no matter how abstruse the search and irrelevant the ads were to it. Especially since currently only a small percent of searches have ads, Google could actually make more money that way, but everyone wound find it really annoying.
  - jefftk 6y ago
    They wouldn't even necessarily make more money that way, after user learning effects, if people found it annoying enough that they would use Google less or get in the habit of quickly scrolling past the ads.
    - nerfhammer 6y ago
      very possible. it could be a lose-lose-lose. but in any event it's more complicated than just trying to juice auction prices as a cash grab.

by jefftk 6y ago

prepend 6y ago

First, it’s funny that you think Google cares about wasting user attention. Have you seen the search interface. Second, when there’s a single ad shown and the floor is $1 or $2 or $3 even that makes no sense. Having no bidders with a floor and a single ad vs 2 or 3 is done for a single reason- revenue. Any customer benefit from missed ads is wiped out by wasted costs. It’s rent seeking because Google has a search monopoly.

jefftk 6y ago
> when there’s a single ad shown and the floor is $1 or $2 or $3 even that makes no sense. Having no bidders with a floor and a single ad vs 2 or 3 is done for a single reason- revenue. Any customer benefit from missed ads is wiped out by wasted costs. It’s rent seeking because Google has a search monopoly. I'm not sure I understand what your objection is. It sounds like you're saying that you'd like Google to remove price floors and show many more ads? Is that right? What do you mean by "wasted costs"?
- prepend 6y ago
  Every single search I run has ads. I’m not sure how Google can run more. But what I’m saying is that if there’s only a single ad and they are paying $3 because google set that limit, they could lower that to what the market will bear and start at .05 or something. If they are worried about ad space they can limit to 1-2 ads and let people bid on them. They already do this as there’s not an infinite scroll of ads, they only show 1-3 and then more on the next page. Setting floors on ads doesn’t reduce the number of ads I see, it just makes more money for Google. This is only possible as they are a monopoly.
  - jefftk 6y ago
    > Every single search I run has ads. Really? If you go to https://myactivity.google.com/item?product=19 https://myactivity.google.com/item?product=19 you should be able to see all your recent google searches. Here are my queries today: * myactivity * somerville trick or treating 2020 * Lilywise dinner * jefftk mask usage * How far around the world is it at the longitude of NYC * wbz coverage map * wbur coverage map * wbz frequency * radio station coverage area * us radio station map * time zones * telegraph * atlas of the historical geography of the united states * isochrone * travel time from dc to nyc historically * nyc longitude and latitude * philly longitude and latitude * dc longitude and latitude * wikipedia time zones * wikipedia solar time * fivethirtyeight * who won the debate Going back and searching these again, only "atlas of the historical geography of the united states" showed ads. > I’m saying is that if there’s only a single ad and they are paying $3 because google set that limit, they could lower that to what the market will bear and start at .05 or something. If they did that, then every query would have an ad at the top, generally a pretty irrelevant one. People would learn to ignore the ads. This would then make ads on searches like "buy insurance" much less valuable. > Setting floors on ads doesn’t reduce the number of ads I see Huh? Of course it does. If you set a floor, some bids are going to be below the floor. For some queries, in my experience a large majority, all bids are going to be below the floor and you see no ads. > This is only possible as they are a monopoly. This has nothing to do with whether Google is or isn't a monopoly. Even a very small search engine would make this kind of tradeoff, choosing not to annoy users with low value ads. Similarly, if you try these searches on Bing or DDG (which both show ads from Microsoft Ads) you will see they are using the same approach, with many ads on highly commercial queries and no ads on most queries. They even published a paper about it: https://www.microsoft.com/en-us/research/wp-content/uploads/2016/02/RankingPaper20EC20version.pdf https://www.microsoft.com/en-us/research/wp-content/uploads/...
nerfhammer 6y ago
If there were no reserve price there would be eight ads on every single search no matter how abstruse the search and irrelevant the ads were to it. Especially since currently only a small percent of searches have ads, Google could actually make more money that way, but everyone wound find it really annoying.
- jefftk 6y ago
  They wouldn't even necessarily make more money that way, after user learning effects, if people found it annoying enough that they would use Google less or get in the habit of quickly scrolling past the ads.
  - nerfhammer 6y ago
    very possible. it could be a lose-lose-lose. but in any event it's more complicated than just trying to juice auction prices as a cash grab.