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Google Control System Part 1 Mobile

Google Control System Part 1 Mobile

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Published by appitalism

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Published by: appitalism on Feb 20, 2011
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02/20/2011

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Google’s System to Control AdvertisingInventory on Multiple Platforms
Examples of Company Practiceswith Supporting Facts and Data
PART 1: MOBILE
Simon Buckingham
April 14
th
, 2010
PRIVATE AND CONFIDENTIAL
 
2
Background
-Simon Buckingham is a New York based Internet and Mobile Entrepreneur-Founder andCEO of 3 companies-Simon has spent nearly 20 years in the mobile industry since starting at the carrier groupVodafone in 1991 where he launched SMS text messaging and its business partner programs-Perspective is as an advertiser and customer of Google in the US and globally spendingsignificant sums on digital marketing to raise awareness and drive sales of our products andservices-Google has been not just a tool and a supplier with keyword search (AdWords) but alsoour ad agency for digital, TV and print inventory buying-Have been generally happy working with them until I read a blogpost in December 2009which mentioned they had extended ad campaigns to run on smartphones which I wasn’taware of. This led me to research Google’s mobile extensions and led ultimately to theproduction of this presentation
 
3
Google’s Economics
 –Google’s economics revolve around a bidding/ auction system to sell inventory that is based onkeywords and driven by Cost Per Click (CPC) charges to advertisers –Because there are a finite number of premium keywords but a potentially unlimited number of advertisers,Google is incented to increase the size and liquidity of the advertiser pools where bidding occurs for different keyword auctions so that the Cost Per Click (CPC) rates increase –Our analysis leads us to believe that in order to keep growing its business, Google needs to continuouslybut gradually introduce new ways to:-Reduce the blended cross-program Click Through Rates (CTR) that advertisers see over timebut onlygradually so as not to cause too much advertiser dissatisfaction-Increase the overall blended Cost Per Click (CPC) costs but gradually in a managed way over timeso as not to cause too much advertiser fallout –Google maximizes revenues by selecting the most expensive ad in real time every time a page loads. Thebids for that ad inventory come in from a large pool of advertisers comprising not just AdWords advertisersbut also other competing ad networks and buyers who have access to the AdSense ad space throughthe DoubleClick Ad Exchange etc., pushing advertisers down the list of search results and necessitatinghigher bids to maintain the same positions in paid search listings and visibility above the fold on Google’ssearch results page –Google’s large acquisitions such as DoubleClick and its proposed acquisition of AdMob enable Googleto maximize the revenue it earns from advertisers by aggregatingadvertiser pools and gain new inventoryby extending their campaigns to the new platforms of display andmobile respectively

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