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Adwords is an auction. Because other people want to spend more than you doesn't make it a scam. And it doesn't matter why they want to spend more. People that p

by AJ007 15y ago

Adwords is an auction. Because other people want to spend more than you doesn't make it a scam. And it doesn't matter why they want to spend more. People that purchase newspaper and traditional television advertising don't measure ROI because they can't. I don't know how much credit Google gives out, but when a major auto insurance company has blanket $100 per click bids, that $75 voucher's impact will be measured far in to the decimal points. The opacity behind Google's bidding system allows for fraud since they can calculate how much each bidder needs to pay differently. Thus spot #2 may actually be paying more per click than spot #1. In some instances, a fluctuating baseline bid may have the same impact as shill bidding in a traditional auction. Whether or not it is explicitly fraud, or a scam, if the outcome is the same, regulators will likely carefully review the process in any anti-trust investigation.

jfoutz 15y ago
An auction house using shills to bid up auctions is indeed a scam.
jcampbell1 15y ago
With the auction model, the spoils go to whoever has the highest margin, and in my industry it is people doing reverse billing scams. I am not willing to advertise a price of $9.95, and then charge people's credit cards $130 every month after that, based on an agreement that is in low contrast and 11px font.[1] You are right, that an auction model doesn't make it a scam, but it does invite scams, and Google should be extra vigilant at policing the scams. [1] https://www.pimsleurapproach.com/special-offer/ https://www.pimsleurapproach.com/special-offer/
- AJ007 15y ago
  As long as it is an auction process, there is intense pressure on all involved to extract as much value as possible from every customer.
  - anon808 15y ago
    Agreed, that's the incentive. Now, whats you're opinion of that incentive? Do you think its something you'd personally like to see more or less of?
    - AJ007 15y ago
      My opinion is that it sucks, and there is not much you can do about it if your business's marketplace pressures require extracting value rather than giving it away. Hypothetically, insurance is an extraction business -- pay out as little as possible so you have more money than your competitors to pay out commissions and advertise. Commodity product manufacturing works the opposite direction, make and price your product for as little as possible so companies purchase from you (and arguably, you are extracting that value instead from your employees in terms of pay and safety.)
  - anamax 15y ago
    > As long as it is an auction process, there is intense pressure on all involved to extract as much value as possible from every customer. When I walk into a physical store, there's not a google ad in sight, yet they're trying to extract as much value from me as possible. That's why I doubt that advertisers would behave differently under a different ad pricing system.
joelrunyon 15y ago
^This^ Just because you lose, doesn't mean it's a scam. If you're getting outbidded by people they more-than-likely figured out a way to monetize the customer on the backend a lot better than you. A lot of things on Adwords depend on breaking even on the front end and monetizing them over the long-term. That said, the article does raise some interesting points - but it's interesting to see how those vouchers seem to have had a more of a net-negative experience for small advertisers who've been burned and turned off of AdWords. That said, I work with some pretty big companies and we see some great ROI on our work.
- anon808 15y ago
  I think the ultimate point isn't that google is running a scam, but that it's favoring scammers to 'win' their auctions. Facilitating a scam and scamming aren't the same, but they're both not something I would want to be a part of.
  - joelrunyon 15y ago
    You didn't read the article did you? Google has a set of rules. People who learn how to play the game within their set of rules are rewarded by "winning." Being bad at a game does not make it a scam. And just because you don't win, doesn't mean someone is scamming you.
    - anon808 15y ago
      I did read it; I'll add color to my reply and hope it makes more sense to you. Adwords auction favors the most aggressive marketers some who's successful strategies are considered scams by me and other folks (but maybe not by google for now). What aggressive marketers are doing that allows them to bid the highest price may not be against google's terms of service (or illegal), but those strategies maybe considered unethical by other marketers that then won't compete with the bids. That's why I said google's auction creates an incentive (favors) the most agressive marketers (with the most scammy strategies) to win. That's the logic.
      - 15y ago

by AJ007 15y ago

jfoutz 15y ago

An auction house using shills to bid up auctions is indeed a scam.

jcampbell1 15y ago

With the auction model, the spoils go to whoever has the highest margin, and in my industry it is people doing reverse billing scams. I am not willing to advertise a price of $9.95, and then charge people's credit cards $130 every month after that, based on an agreement that is in low contrast and 11px font.[1] You are right, that an auction model doesn't make it a scam, but it does invite scams, and Google should be extra vigilant at policing the scams. [1] https://www.pimsleurapproach.com/special-offer/ https://www.pimsleurapproach.com/special-offer/

AJ007 15y ago
As long as it is an auction process, there is intense pressure on all involved to extract as much value as possible from every customer.
- anon808 15y ago
  Agreed, that's the incentive. Now, whats you're opinion of that incentive? Do you think its something you'd personally like to see more or less of?
  - AJ007 15y ago
    My opinion is that it sucks, and there is not much you can do about it if your business's marketplace pressures require extracting value rather than giving it away. Hypothetically, insurance is an extraction business -- pay out as little as possible so you have more money than your competitors to pay out commissions and advertise. Commodity product manufacturing works the opposite direction, make and price your product for as little as possible so companies purchase from you (and arguably, you are extracting that value instead from your employees in terms of pay and safety.)
- anamax 15y ago
  > As long as it is an auction process, there is intense pressure on all involved to extract as much value as possible from every customer. When I walk into a physical store, there's not a google ad in sight, yet they're trying to extract as much value from me as possible. That's why I doubt that advertisers would behave differently under a different ad pricing system.

joelrunyon 15y ago

^This^ Just because you lose, doesn't mean it's a scam. If you're getting outbidded by people they more-than-likely figured out a way to monetize the customer on the backend a lot better than you. A lot of things on Adwords depend on breaking even on the front end and monetizing them over the long-term. That said, the article does raise some interesting points - but it's interesting to see how those vouchers seem to have had a more of a net-negative experience for small advertisers who've been burned and turned off of AdWords. That said, I work with some pretty big companies and we see some great ROI on our work.

anon808 15y ago
I think the ultimate point isn't that google is running a scam, but that it's favoring scammers to 'win' their auctions. Facilitating a scam and scamming aren't the same, but they're both not something I would want to be a part of.
- joelrunyon 15y ago
  You didn't read the article did you? Google has a set of rules. People who learn how to play the game within their set of rules are rewarded by "winning." Being bad at a game does not make it a scam. And just because you don't win, doesn't mean someone is scamming you.
  - anon808 15y ago
    I did read it; I'll add color to my reply and hope it makes more sense to you. Adwords auction favors the most aggressive marketers some who's successful strategies are considered scams by me and other folks (but maybe not by google for now). What aggressive marketers are doing that allows them to bid the highest price may not be against google's terms of service (or illegal), but those strategies maybe considered unethical by other marketers that then won't compete with the bids. That's why I said google's auction creates an incentive (favors) the most agressive marketers (with the most scammy strategies) to win. That's the logic.
    - 15y ago