The Google Ads Podcast Uncovering the Dark Side of Google's Price Fixing
Kasim reveals the dirtiest secret in Google Ads. In fact, it's almost a full-on scam!
Google Ads is (supposedly) auction-based. That should mean that the money you pay for visibility (clicks, views, and impressions) is based on the competitive landscape. The more competition, the more you pay. The less competition, the less you pay.
Google Ads definitely works this way in highly competitive markets. The more competition, the more you'll pay. I've seen industries (like personal injury attorneys, for example) with CPCs of $1k and more. However, what happens when things go in the other direction? For example, you find a targeted niche with little to no competition. One might expect the cost of traffic to be virtually zero, right? Wrong...
Google has something called "Ad Rank thresholds" that set a minimum bid (a "reserve price") that needs to be met before an ad can be shown. And, get this, they're calculated dynamically, in real time, based on a myriad of pretty opaque factors, including the "value advertisers place on users' engagement with their ads."
Basically, Google gets to have its cake and eat it too. When traffic is competitive, it charges you based on the competition. When there's no competition, it charges you a fee based on the value of the traffic. Google is better equipped than any other system on the planet to determine the true value of traffic to an advertiser (not least of which because most of us tell it outright).
Obviously, Google's explanation is far rosier and is buttressed by the claim that they're attempting to maintain quality controls across all ad engagements.
You can read more about Ad Rank thresholds here: https://lnkd.in/gYCvhK6
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