CPS 49S
Google: The Computer Science
Within and its Impact on Society
Shivnath Babu
Spring 2007
Auctions
• English auction
• Sealed-bid auctions
– First-price
– Second-price (Vickrey)
• Google:
– When does Google do auctions?
– What does Google use?
– Why?
Development of the Pay-per-Click
Advertising Model
For what exactly should advertisers pay and
when?
• When the ad is being shown to the user
• When the ad is being clicked by the user
• When the ad has “influenced” the user in the
sense that its presentation lead to a
“conversion event”
Pay-per-Click
• Two measures of the effectiveness of an
advertisement:
– Click-Through Rate (CTR): measures how often
visitors click on the ad. CTR= X/Y
– Conversion Rate: gives a sense of how often visitors
actually act on a given ad, which is a better measure
of ad’s effectiveness than the CTR measure.
Google’s Pay-per-Click Advertising Model
• Ad Rank = CPC x QualityScore
• QualityScore--a measure identifying the “quality”
of the keyword and the ad combined
• “The actual amount of money paid when the
user clicks on an ad is determined by the lowest
cost needed to maintain the clicked ad’s position
on the results page.”
Click fraud in AdWords
1.
Make the competitor pay more
2.
If you’re second, click on the competitor’s
advertisement enough so that he will hit his budget for
the day
3.
If you knock the second guy out, you’ll only have to
pay as much as the number three guy
The AdSense Program
• AdSense for Search (AFS): relevant ads are displayed as links
sponsored by Google; links are produced using the same method as
on Google.com
• AdSense for Content (AFC): ads are based on the content of the
visited pages, geographical location and some other factors.
• What is a way that a publisher can cheat through AdSense?
– The publisher can continue to click on an advertisement on their site
from Google in order to receive more money from Google.
Data Google Can Collect
• Click through information
• When a user has visited a conversion page
• Google is unable to get full access to all the clicking
activities of the visitors of the advertised website
Invalid Clicks and Google’s Definition
• Invalid clicks Vs. Fraudulent clicks
• Problem with identifying fraudulent clicks:
– Was the click generated “artificially” or not and what
does exactly “artificial” mean in this case?
Operational Definitions of Invalid Clicks
• Anomaly-based (or Deviation-from-the-norm-based): doesn’t look at
what defines an invalid click, but rather what defines a “normal”
click. Therefore, invalid clicks are those that significantly deviate
from the established norms.
• Rule-based: a specified set of rules identifying invalid clicking
activities; these experts define what valid and invalid are.
• Operational Definitions a double edged sword?
– They cannot be fully released to the general public because unethical
users will take advantage. However, if the public doesn’t know, how do
advertisers know exactly what they are being charged for?
Conclusions about Definitions of Invalid Clicks
The Fundamental Problem: Pay-Per-Click model is
inherently vulnerable to click fraud, making it impossible
to solve.
Possible solutions?
1. The “trust us” approach
2. Third Party Auditors