Adbrite has always to me been the “other” alternative in PPC advertising. Now they are changing it up a bit with relevancy and ctr based pricing and all those fancy terms we hear from the big boys…
“What’s changed?
AdBrite’s CPC auction used to work such that an ad with the highest bid won. Now, the system takes into account each bid, as well as each ad’s clickthrough ratio. In other words, an ad that has a low bid — but many clicks — could be shown instead of an ad with a high bid but few clicks.
Why the change?
Showing ads with a higher clickthrough ratio means that we’re showing more relevant ads — and everyone likes ads that are more relevant.
A side-benefit is that CPC prices may drop while targeted click volume increases.”
I gotta say I am not sure this is the best move for AdBrite but we shall see.
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Why wouldn’t this be a smart move? Seems to me that taking the likelihood of a click into account is a very bright move. Consider the following ranking:
Ad “A”
Willing to pay $2 / click
Likelihood of getting clicked in top position: 10%
Ad “B”
Willing to pay $1.50 / click
Likelihood of getting clicked in top position: 20%
What’s the expected value of showing Ad “A” in the top position? .1 x $2 = $.20.
What’s expected value of showing Ad “B” in the top position? .2 x $1.50 = $.30.
AdBrite can expect Ad “B” to drive 150% of the revenue of Ad “A” in the top position, even though they’re willing to bid less. Of course, I’m sure that reasoning pales in comparison to: “everyone likes ads that are more relevant”. Sure it does.
Thanks,
Chris
I am not sure this is the best thing either. However, with their loser editorial standards, I think you are going to see pretty extreme claims in order to increase CTR and get position.
“I gotta say I am not sure this is the best move for AdBrite but we shall see.”
Hey Shoe,
Wondering why you think that this isn’t the best move? Please explain?
I got that email from adbrite as well.
It really doesn’t affect me .. still waiting on ShoeMoney to grab my hand and show me how to effectively use their system.
I think it could be a bad move because previously you could go to adbrite pay x per-click and get your ad seen. Now adbrite will determine if your ad is worth showing on y site based on the CTR.
So, no matter how much you pay per-click your ad may not be seen.
This is bad for the publishers because they will earn less (possibly), and bad for the advertiser because maybe they don’t want clicks maybe they want to expand brand awareness and are simply getting their name out there.
If the ad shown is SOLEY chosen on CTR that could mean less earnings. Sure you might get 100 clicks at 5 cents ($5.00). But what if you got 15 clicks at .50 ($7.5). With the same # of impressions the CTR of the 5cent click would be shown more but the publisher would earn less. I would hope they take into account not only CTR but CPC so that it optimizes for HIGHEST earning for the website publisher.
Anyway, I think I’m rambling and writing in this little post box make sit hard to proof-read.
-Todd
They are basically optimizing for CPM and sure its a good thing for the publishers from a revenue point of view.
ToddW
We do include the CPC Bid.
I don’t see how this couldn’t be a good thing as long as it does actually provide an optimal CPM for the publisher. Of course now just like Google lots of advertisers aren’t going to be able to hack it, but the only reason for that is irrelevant ads. Just goes to show that untargetted advertising is not and will not be a feasable PPC strategy in the near future.