The Google Pay-for-Position Deal

My brief in Thursday's New York Times on Google's new arrangement. Google is being its usually clever self. These ads are still clearly labeled as sponsored links at the right of its actual search results in different colored boxes, so consumer advocates should be pleased. But they're using a combination of round-robin and survival of the clickest: your ad gets put in competition against other ads, and you are always charged the lowest possible price for the optimized highest position. If you bid low and have a high clickthrough rate, you pay the least amount necessary for that combination (clickthrough times bid) to put you on top. It really has no impact directly on Overture's business, but it's an interesting way to quickly test out ad ideas in the marketplace. Google automatically drops adds that get less than five clickthroughs in the first 1,000 impressions to save its advertisers money on ineffective campaigns, as these ads tend to be objective driven, but brand oriented.