Google AdWords now personalized

Hat Tip: Found via Greg Linden's blog: Google AdWords now personalized. Below are my thoughts and questions:

Google is now reaching back into your previous search history and presumably choosing a better previous search if the current one is not sufficiently monetizable.

Questions:

• Is the goal of Google to increase the fill-rate of ads or to show more valuable ads in general?
  
• What criteria is used to reach back into a user's history? Boolean commercial/non-commercial then select last commercial search versus choosing based upon some selection algorithm from the last N searches (see previous point).
• Will the reach-back cross a topic boundary or is it only to enhance context for an ambiguous search?
  
• What effect will this have on the Google Keyword Tool that helps advertisers forecast demand and price for a keyword? The volume numbers must now be adjusted by the amount of time the impressions are shifted to alternate keywords.
• How much will this starve the long-tail of searches? Depending on the aggressiveness of the selection then long-tail searches may suffer a decrease in volume for adwords.
  

Even the most modest change of merely using recent previous searches only 'about' the current search to augment the adwords auction query should have a dramatic effect on the auction process. By definition it expands the number of bidders for a particular query. It may also curtail the effectiveness of arbitrage done by some adwords buyers who buy ambiguous lower value keywords as proxies for high value ones due to user sessions with query reformulations. Why? It should have the effect of driving up prices for the penny keywords if they are sufficiently related to high value keywords.

It will be interesting to watch what happens. This is likely not a non-trivial change in the keyword market.

Posted via email from nealrichter's posterous

Can we measure Google's monopoly like PageRank is measured?

Jeremy Pickens posted an interesting note on his IR new blog:

Is it really true that Google is competing on a click-by-click basis? In the user studies that Google does, which of the following happens more often when the user types in a query to Google, and sees that Google has not succeeded in producing the information that they sought (fails):

1. Does the user reformulate his or her query, and click “Search Google” again (one click)? Or,
2. Does the user leave Google (one click), and try his or her query on Yahoo or Ask or MSN (second click), instead?

His points about actions 1 versus 2 are very astute. I’d guess that #2 happens a LOT on the # 2-10 search engines. Meaning people give that engine a try.. maybe attempt a reformulation.. then abandon that engine and try on Google. And I’m betting that people ‘abandon’ Google at a far less rate than other engines.. ie asymmetry of abandonment.

I’d love to do the following analysis given a browser log of search behavior:

Form a graph where the major search engines are nodes in the graph

For each pair of searches found in the log at time t and time t+1 for a given user, increment the counter on the edge SearchEngine(t) -> SearchEngine(t+1). Once the entire log is processed normalize the weights on all edges leaving a particular node.

We now have a markov chain of engine usage behavior. The directional edges in the graph represent probability of use transference to another engine, self-loops are the probability of sticking with the current engine.

If we calculate the stationary distribution of the adjacency matrix of probabilities, we should have a probability distribution that closely matches the market shares of the major engines. (FYI - this is what PageRank version 1.0 is - the stationary distribution of the link graph of the entire web)

What else can we do? We can analyze it like it’s a random walk and calculate the expected # of searches until a given user of any internet search engine will end up using Google. If the probabilities on the graph are highly asymmetric.. which I think they are.. this is a measure of the monopolistic power of people’s Google habit.

This should also predict the lifetime of a given ‘new’ MSN Live or Ask.com user.. meaning the number of searches they do before abandoning it for some other engine.

Predicted End Result: Google is the near-absorbing state of the graph.. meaning that all other engines are transient states on the route to Google sucking up market share. Of course this is patently obvious unless one of the bigs changes the game.