Making Google richer: optimal algorithms for the AdWords auction
Instead of my usual focus on AdSense, today I'm going to talk about a related topic, AdWords. On September 29, I attended a talk by Professor Umesh Vazirani, a well-known computer scientist from UC Berkeley. He was the opening speaker for this year's Distinguished Lecture Series sponsored by the University of Waterloo's School of Computer Science. The talk was titled Making Google Richer: Optimal Algorithms for the AdWords Auction. It wasn't specifically about AdWords per se, but about advertisement auctions in general.
As most of you know, AdWords uses a competitive bidding system that lets advertisers choose how much they're willing to pay to have their ads displayed in conjunction with specific keywords. I wrote about this briefly in Make
Easy Money with Google, but I didn't spend a lot of time on it other than mention that Google had to license some of the technology from Yahoo!, who acquired it when they bought Overture. Prof. Vazirani briefly went over some of this history and also explained in general how AdWords works for the benefit of the audience members (mostly computer science students and professors) who aren't as familiar with these concepts as those of you reading this article.
The problem faced by Google and other companies that implement bid-for-placement systems is to devise a bidding algorithm that generates the maximum revenue for the auctioneer. (Prof. Vazirani mentioned that Yahoo! was looking to redesign its algorithms because they felt they were leaving money on the table.) As it turns out, the “obvious” answer of ranking the ads by bid price (or some variation of bid price, such as Google's early attempts at using bid price multiplied by the clickthrough ratio) is not optimal. In many cases, this so-called “greedy” algorithm can in fact prove quite detrimental.
The key to all of this is the advertiser's budget, the total amount of money they're willing to spend on their bids within a certain time period. (For AdWords advertisers, the budget is calculated on a daily basis.) Using some complicated mathematical analysis, Prof. Vazirani and his colleagues were able to come up with an optimal algorithm for ranking bids by factoring in each advertiser's remaining budget into the equation. In other words, the more an advertiser spends its budget, the less likely it becomes to have its ads chosen. In the greedy algorithm, the advertisers who bid the highest end up dominating the auction until their budget is spent. In the optimal algorithm, that domination doesn't happen and other advertisers get to spend their budget. The end result is more revenue for the auctioneer, because most of the advertisers are spending all or most of their budgets.
It's certainly an interesting topic and a neat mathematical problem. If you want more details, see the article Computer Scientists Optimize Innovative Ad Auction (PDF), which goes over the problem and the solution in more detail. (As an amusing note, the article uses Vioxx as an example of a high-paying keyword. Readers of my book know how well Vioxx did for me as an AdSense publisher!)
Of course, we may never know if companies like Google or Yahoo! actually incorporate this work into their own algorithms. They're definitely following the research with some interest, though, as Prof. Vazirani has presented it to both companies.
P.S.: Today's the last day this month to join my mailing list and get a chance at winning a signed copy of my book.
Knowing when the Alexa Toolbar visits
Since my last posting about the relevancy of Alexa rankings I've had some questions about detecting when the Alexa Toolbar is being used. It's really quite simple, actually, if you're web server is logging the right information.
You see, most browsers send what is called a user agent string to the web server whenever they request a page from the web server. The user agent string is meant to identify the “user agent” (the browser, who is acting as an “agent” for the user) to the web server. The web server can use this information in different ways, perhaps by serving up different content formatted for different browsers.
[Note: There are actually better ways of doing that than relying on the user agent string, but let's not get too technical here. If you really want to know the details, see my articles Masquerading Your Browser and How to Detect Internet Explorer.]
Browsers are not required to send a user agent string, and for privacy reasons some people turn them off. Some browsers even send different user agent strings to masquerade as a certain kind of browser — this often happens when you want to visit sites with Firefox/Mozilla/Opera that have been “designed for Internet Explorer only” and are obnoxious about it. Non-browsers often send user agent strings: web crawlers like the Googlebot or the Mediapartners crawler identify themselves with a user agent string. In fact, using the user agent information to figure out when Google is crawling your site is infinitely more useful than figuring out when the Alexa Toolbar is being used.
Anyhow, browsers with the Alexa Toolbar installed include the phrase “Alexa Toolbar” in their user agent string. So all you need to do is configure your web server to include user agent information in the log files it generates. What's a log file, you ask? A log file is basically just a text file to which the web server writes (”logs”) important information. Things like what pages are being accessed at what times. If you're lucky, your log files should already be tracking this information. If not, you'll have to consult your web server documentation (or ask your web hosting service) for instructions. (If you're running a blog using a free service and you don't have access to those logs, then there's not much I can do to help you, sorry!)
And if you're curious about the user agent string your own browser is sending, visit my web browser header viewer page to see what exactly my web server knows about your web browser.
Are Alexa rankings relevant?
Advertisers, search engines and other interested parties are always looking for ways to rank sites against each other. Everyone knows about Google's PageRank, for example. But what about Alexa rankings?
For those who don't know, Alexa is an Amazon subsidiary that provides tools for navigating, classifying and searching the Web. Some of these features are done in partnership with other companies — basic search technology is provided by Google, for example. Alexa's main tool is the Alexa Toolbar (that version is for Internet Explorer, Firefox/Mozilla/Netscape users can install the A9 Toolbar instead). Besides providing easy access to Alexa information, the Toolbar actually collects statistics on what sites users are visiting and sends it back to Alexa for compilation. This sampling allows Alexa to assign popularity rankings for a given site. For example, you can see that the Alexa ranking for MakeEasyMoneyWithGoogle.com shows this site gaining readership over the past few months, finally breaking into the “top 100,000″ sites.
The problem with Alexa's rankings is that its accuracy depends on the number of browsers running the Toolbar. I think these days many more people run the Google Toolbar or simply use similar functionality already built into modern browsers like Firefox. And the Alexa Toolbar was initially only available on Internet Explorer anyhow, so it was ignored by other browser users.
Of course, blogs and other syndicated content read through news aggregators don't get counted in those statistics. (Mind you, blog stats are another problem entirely.)
So take the Alexa rankings with a grain of salt. Use them more for relative comparisons. If you're concerned about your own site's ranking, then load up the Toolbar and visit your own site once or twice a week, just to get some activity going. But spend your time worrying about other things like writing good content and following good search engine optimization techniques — they'll benefit you much more in the long run.
Eric Giguere is the author of the introductory AdSense book Make Easy Money with Google. Be sure to download and read the free sample chapter.
PoliticalSmackTalk.com: New reader-built site
I'm happy to announce another reader-built site, PoliticalSmackTalk.com, a site dedicated to the first amendment of the United States constitution. Please visit the site and let them know where you heard about them.
If you're wondering why I make these occasional announcements, it's because I have a standing offer for a free listing available to readers of Make Easy Money with Google to list any sites that they develop with the help of my AdSense book.
If you'd like to take advantage of this offer, you just need to purchase my book. You can download a sample chapter to get feel for what the book's like. Don't forget to join my mailing list, either, for a chance to win a signed copy of the book. The first draw occurs at the end of this week.
AdSense tools for Firefox users
There are some great add-ons (extensions) available for users of the Firefox browser. AdSense publishers in particular will be interested in these three tools:
- AdSense Notifier displays your current AdSense earnings in a status bar at the bottom right-hand corner of each Firefox browser window. It's a great way to keep tabs on your account. You know you're going to login regularly, might as well let this tool do it for you! You can configure it to show various kinds of today, I like to show the impressions, clicks and earnings for today. And right-clicking on the status bar is all you need to do to open up the AdSense management console.
- https://addons.mozilla.org/extensions/moreinfo.php?id=262">Google PageRank Status displays Google's PageRank for the current page in the status bar as well. It's a quick check to see how well a page is ranked against others. PageRank is a value from 0 to 10 that indicates a pages's relative authority in terms of how many inbound links it has compared to others. It's one of the factors that influences a page's position in Google's search results pages.
- SEOpen adds new menu items to the context (popup) menu for performing search engine optimization (SEO). After loading a page, you can use the SEOpen to analyze the page's links, view the keyword density, check backlinks on different search engines, etc. Useful stuff when you're trying to figure out why a page is positioned so highly in the search engine rankings.
To install any of these, just visit the pages above and click the Install Now link and restart your browser.
Eric Giguere is the author of Make Easy Money with Google. Join his mailing list for a chance to win a signed copy of his AdSense book!.
Easy Money: Article from The Record
You can read the full text of my interview in the Record.
And for the record, I didn't call my father an “old” guy!
Click fraud akin to inflated magazine circulation
Well, I've written about click fraud several times before in this blog, but it seems every week I have more material to write about. (I'll have to devote an entire chapter to it in the next edition of Make Easy Money with Google!) This time it's the venerable Time magazine that provides the fodder.
Apparently, Time is under investigation for circulation fraud. Circulation fraud is what occurs when a periodical inflates its circulation figures. Higher circulation numbers mean they can charge advertisers more money for the advertisements placed in the periodical. Like I mentioned before, this is why the Audit Bureau of Circulations was established, as an independent way for advertisers to measure circulation numbers in order to determine the true worth of a publication as an advertising vehicle. Interestingly enough, the ABC has recently disqualified “sponsored” sales of publications from being included in circulation figures, but it's unclear whether or not Time's troubles involve sponsored sales.
How does this relate to AdSense and other advertising programs? Not directly, obviously, but it goes to show you that click fraud isn't really new, it's just another way to defraud advertisers. It will be interesting to follow what happens here.
Be sure to download the free sample chapter from my AdSense book if you haven't already done so.
John Kremer reviews Make Easy Money with Google
John Kremer did a mini-review of Make Easy Money with Google in his book promotion blog. John is the author of 1001 Ways to Market Your Books, a great resource with a new edition due out this November (see John's BookMarket.com site for details.)
If you're a book author like myself, be sure to join John's book marketing tips mailing list. And don't forget to explore the use of AdSense as another way to make money from the material you write, whether it's articles, book chapters/excerpts, or even entire books. (Do you have an out-of-print book? You might be surprised at how much money you can make by converting it into a set of web pages and displaying ads on those pages…)
Whether or not you're a book author, be sure to check out the free sample chapter from my book. If you join my mailing list by the end of the month, you'll even get a chance to win a signed copy of the book!
Is Site Build It! worth it?
Anyone looking for more information about AdSense will almost immediately come across the Site Build It! system. (Note: I am not an affiliate of SBI, unlike most people who talk about it, therefore the SBI link doesn't make me any money.) Like anything with a good affiliate system (especially those with high payouts), SBI is promoted far and wide on the Internet, so it's hard to avoid it.
I've always been curious about SBI, and I recently had a chance to play with it a little thanks to someone I know. If I had to describe it to someone else, I would describe it primarily as a content management system. Basically you go and build the content of the site using their Web-based tools and it then creates and updates a Web site for you based on that content. It takes care of all the gory details, including registering a domain name. Everything gets stored in their own database, they don't let you use FTP or other conventional methods of moving files to the website — basically it stays under their control. There are certainly limits as to what you can do, as you can imagine. I think I read somewhere (but I'm not 100% certain) that all the pages of your site could only sit in a single directory, for example, so you couldn't have subfolders.
Although it sounds like a product, SBI is really a subscription-based service. You pay a large upfront fee for your first year, but after that it's a monthly fee. For that, you get access to their system, technical support, and of course various motivational documents and tools.
So is SBI worth it? I think it really depends on how much work you want to put into things. One of the things I've always stressed in Make Easy Money with Google is that while the concepts are easy to understand and anybody can learn to create and manage their own websites using free tools like Nvu, it does take time and effort to do it. If time is something you're short of, then a system like SBI might be good for you. The only downsides I can see are that (a) it does limit you in certain ways (you have to do things their way) and (b) you have more monthly costs to cover with your AdSense earnings before you make a profit.
Still, for less than $20 I say my book's a great deal and even SBI'ers should get it and learn from it! 
It's OK to click ads
Once in a while, I get the occasional comment from a reader saying that they've stopped clicking ads since becoming an AdSense publisher. I guess they don't want to jinx their AdSense publisher status. This is an unnecessary precaution, however: you don't have to stop clicking ads, you just can't click ads on your own sites.
Think of it this way: you wear different hats when you're on the Internet. Sometimes you're a website/blog owner, sometimes you're just a surfer. When you're the latter, why not click on ads that catch your attention? That's why they're there! Advertisers don't automatically lose interest in you when you become an AdSense publisher. I mean, most of the ads that show up on the MakeEasyMoneyWithGoogle.com site are targeted specifically at AdSense publishers, since the site is a companion to the Make Easy Money with Google book, so obviously there are people out there looking to attract the attention of AdSense publishers. People like me with books to sell. People with software to sell. People with alternative advertising systems to sell. You can reach any kind of niche demographic today.
Of course, you don't want to go clicking ads indiscriminately, either. Do that and you'll be committing click fraud, a topic I've talked about quite extensively in this blog. All I'm saying is that you don't need to be afraid that clicking ads on someone else's site will get you kicked out of the AdSense program. It won't, and you'll be doing your share to promote the AdSense Economy.
Make Easy Money with Google featured in The Record
The Record, the newspaper that serves the Kitchener-Waterloo area in Ontario (where I live) features an interview today about the publication of Make Easy Money with Google: Using the AdSense Advertising Program. I'm travelling, so I haven't seen the article text yet (someone mail it to me!) but subscribers to the Record can access the article online. Unfortunately for everyone outside K-W, it's not available for free — The Record is one of those rare papers that charges to see online content.
Are you an information repeater?
Sometimes when I talk in public about my book, people get offended. “Why would I buy such a book when it's all available for free on the Internet?” they ask. That's a good question. These days, information on almost any conceivable topic is available on the Internet for free. So why do poor souls like me even bother to write books, especially traditional (printed) books that you buy through a bookseller?
It's kind of a funny question, though. In theory, owning a car and knowing how to drive is all you need to become a racecar driver. But no one would think of calling themselves a racecar driver unless they actually ran some races.
Which brings us one of the biggest problems with the Web (especially the “blogosphere” [but I hate that term so I try not to use it]) today: the information repeater.
An information repeater is someone who puts up web pages or blog entries that consist entirely or almost entirely of someone else's content and to which they add no value. No insightful commentary, no explanations, no “I disagree because…”. Just someone else's content.
That's what books and other original content bring to the world: yes, there's information out there already — and you know what, most of it's always been free for the knowing if you could find the right people to talk to — but it takes skill to take the information and do something with it. Is everything that comes out of your mouth insightful? No, I didn't think so. It definitely takes work to write something original and insightful. Why else do you think that students buy pre-written essays and that educational institutions resort to using services like TurnItIn.com?
If you're setting up a web site or blog, do us all a favor and follow the guidelines for creating quality content that I and others have described. Remember, the Web isn't about information repetition, it's about information linkage. Don't just copy someone else's content, wrap your own thoughts around it.
Sample chapter from Make Easy Money with Google now available
By popular demand, I'm making available a free sample chapter of Make Easy Money with Google: Using the AdSense Advertising Program. The sample chapter is Chapter 3, “Finding Something to Say”, which talks about topic selection for your website or blog, including a discussion of how to determine relative keywords values. Feel free to refer your friends and family to the download page, or just send them the chapter (it's in Adobe PDF format) directly.
Blogger isn't free: The cost of not using your own domain
A friend of mine recently moved his blog off of Blogger's blogspot domain and onto his own domain. Unfortunately, he's paid a stiff price for that move, because he can't change all the inbound links to the old blog address. As a result, his traffic to his blog has dropped sharply, as has his AdSense income.
This is why in my book I tell Stef to register a domain and find a web hosting company to host the domain. Even though she's using Blogger to actually run the blog, she can configure Blogger to publish the blog on her site, not on its own domain. Yes, the blogspot domain is convenient to use, but it's not without cost.
Now, some people will argue with me that any change to a blog address is bad. And, yes, I'd say it's best to keep the same exact URL for a blog whenever possible. So choose wisely when you start. Sometimes you have to change, though, and if you own the domain then at least you can do things like redirect visitors from the old address to the new address. You have more control, it's as simple as that. And if you're making money from that blog, don't you want as much control as possible?
Eric Giguere is the author of Make Easy Money with Google: Using the AdSense Advertising Program.
Stroller-Advisor.com: Another site by a reader of Make Easy Money with Google
I'm proud to announce that my sister, on whom I loosely based one of the characters in Make Easy Money with Google, has finally unveiled Stroller-Advisor.com, a site giving advice and reviews of baby strollers, carriages, car seats and other child carriers, a subject with which she's very familiar due to her own baby stroller “mistakes”. She's very excited to get it off the ground, and please let her know you saw it here first!
Have you joined the Make Easy Money with Google mailing list yet for your chance at winning a signed copy of the book?
Horizontal link units work best
I've been doing some experimentation with AdSense link units and I've concluded quite unscientifically that the horizontal link units work best. For those who don't know, a link unit is a two-stage ad delivery mechanism. Instead of showing individual ads on a page, a link unit shows ad topics. Clicking on an ad topic (it's a simple text link) brings the visitor to a full page of conventional text advertisements. The AdSense publisher only gets paid if the visitor then clicks one of those ads — the click on the topic link doesn't count for anything.
Like regular ad units, link units come in different formats. Initially, they were all vertically-oriented: one line of “Ads by Google” followed by four or five (it's configurable) ad topics. Then horizontal link units appeared: the “Ads by Google” tag and the links are together on a single line.
You can see horizontal link units in action on my two main sites, EricGiguere.com and MakeEasyMoneyWithGoogle.com. They fit well with the design of these sites, especially at the top of the page near the navigation banner. I chose contrasting colors to make it clear these aren't navigation links. You'll see many sites, however, blending the link unit colors to deliberately make them look like they're part of the site navigation.
As always, your results may vary. Don't be surprised if you see ad search boxes on pages like this rant against a cellphone provider I wrote. I think the search box looks a bit crowded, so I may have to use a custom channel to track that page specifically to see if actually generates any income — I think it's an easier sell to get visitors to click links than to explicitly search for ads.
Eric Giguere is the author of Make Easy Money with Google, the first introductory AdSense book.
Does Opera improve AdSense relevancy?
There seems to be a rumor floating around that viewing your pages with Opera will improve the relevancy of the ads shown on those pages by AdSense. I've not noticed this behavior: if I view my own pages with Opera, I don't see the Mediapartners crawler (the Web crawler that Google uses to fetch pages for analysis — often confused with, but separate from, the Googlebot, Google's main crawler) show up any more often. If you're viewing pages that nobody's viewed for a while (maybe hours, maybe days) then the Mediapartners crawler may be dispatched to fetch the most recent version of the pages, so maybe that's what's confusing people.
Eric Giguere is the author of the introductory AdSense book Make Easy Money with Google, available in softcover from all major bookstores.
KrazFrame.com: Another site by a reader of Make Easy Money with Google
Just a short posting today to introduce you to KrazFrame.com, a humor and entertainment site recently created by a reader of Make
Easy Money with Google. Still needs some work, but the site owner's very excited. Keep those site announcements coming!
Vince Logan and EvaMendes.com: An AdSense success story
Vince Logan runs a high-traffic site and has recently published
ads on it using AdSense. He contacted me after reading my book
with some questions, which I was happy to answer. But after finding more
about Vince's situation, I decided to interview him about his experiences
with AdSense. Note that Vince's situation is somewhat unique: he had
an existing high-traffic site that he is only now monetizing. The kind
of numbers he's mentioning are actually fairly normal, probably even low,
for that amount of traffic. As he mentions, he's still learning
and playing around with things. Still, his story is nice to hear and
I thank Vince for sharing some of the details with us.
1. You're not the typical reader of Make Easy Money with Google: Using
the AdSense Advertising Program. How
many sites have you built so far and what prompted you to buy the book
given your level of experience?
I have built about 150 different sites from entertainment to retail to
not-for-profit. I heard about this “adsense” from a customer who wanted to
place a couple on his site. I placed a few on my site to see how it works
and I watched the money roll in. Well, only about $5 a day. I thought that
was pretty good. I decided to do a little more research and MEMWG popped up
a couple times. Having a Barnes and Noble across the street, I ordered it.
After reading it, I tweaked a couple ads and my CTR and CPM tripled. I was
bringing in an average of $30 to $40. A high of $70. No matter how “basic”
you think Make Easy Money with Google is, everyone who reads it will pick up something that they
didn't know.
2. If you're willing, please share some details about one of your sites.
I built EvaMendes.com as a hobby. I bought the domain about 4 years ago and
started making a fan site. The movie “Hitch” debuted and my hosting company
called and said that I needed to move the site because it was bringing in
about 1 million hits a day. I moved it to a dedicated server. I received a
call from Eva's publicist and the site is going 'official' in November.
It's also been nominated for an award from Movies.com, voting ends September
14th, so VOTE!!
3. How much money are you making these days from AdSense? How much were
you making when you started? Was it a slow and steady increase or were
there events that caused your income to jump?
I recently experienced a “no-no” with adsense that brings the revenue way
down. Not a violation, just a greed thing. [Eric: Vince put too many ads on his site and his numbers actually went down. Remember: less is more when it comes to AdSense. More about that in a future posting.] On average, I was making $40 a
day. Remember though, I have only been doing this a month and I already
have about $700 in my account. If I had to plot it out, the first days was
very low ($1-$10) then it shot up ($70) and then I became greedy and it went
down to $5 a day. The only event that happened was that I let it work and
didn't tweak it after reading Make Easy Money with Google. Until I got greedy that is.
4. In your review of Make Easy Money with Google you mentioned that you were able to make your
daily income jump from $11 to $70 by following the book's advice. What
specific advice helped you the most?
Having the confidence that it worked and making sure that I was doing the
'basics'.
5. Traffic is always key, what's been your best way of getting traffic
to your sites?
About 98% of my traffic is direct. They simply type in “Eva Mendes” in any
search engine or just add the dot com.
6. What more would you like to see books like Make Easy
Money wiht Google discuss?
The pitfalls, how does AdSense “really” work, how does AdWords work (that's
where AdSense ads come from), links to good AdSense sites, the rules and
regs on AdSense, a chapter on human behavior when it comes to ad placements
(advertising tips).
7. Have you given any thought to joining Yahoo!'s program once it's been
made public? Are you dissatisifed with AdSense in any way?
Of course! Yahoo has promised to “give more free money”!! I am not
dissatisfied at all. I will probably make about $1000 to $2000 a month once
the site runs for a little while (without me tweaking it). That's just one
site though. I have about 30 that are current. None of them pull the
traffic that EvaMendes.com does. Not bad for a hobby…
Using Google Alerts to check for content theft
In my AdSense book I devote a small section to discussing plagiarism and copyrights, including a tip on regularly using Google to find sites who are copying your content without your consent. This is good advice, but you can also get Google to monitor the Web for you automatically using the Google Alerts tool.
It's very simple to setup. First of all, look through your text for what Amazon refers to as a “statistically improbably phrase”, or SIP for short. A SIP is a phrase whose wording is unlikely to appear in any other text. Now, you don't have access to the same kind of database that Amazon does to figure out if a phrase is a SIP or not, but you can do the next best thing by doing a Google search to see if it really is a SIP or not. (Remember to enclose the SIP in quotation marks, you want Google to search for the exact phrase, not just for the individual words in the phrase.)
Once you have your SIP or SIPs, go to the Google Alerts page and enter the phrase (in quotation marks) and select “Web” as your search type and then the desired frequency of the search as well as your email address. You'll get a verification email sent to you and once you've verified it a Google Alerts account will be created for you. Once the account is created, you can define more alerts — you're not limited to monitoring a single phrase. You can also have the alerts sent to you as plain text emails or as HTML emails — it's your choice.
Once you've registered your alerts, Google will send you periodic emails whenever the phrase shows up in its index, with links to the containing pages. All you do is look through those pages to see what they're about and if they've illegally copied any of your content.
It's not the only way to detect plagiarism, of course, and it won't detect all kinds of plagiarism, but it's so easy to setup that it's worth spending a few minutes doing.