Profit per Impression, or PPI, is a popular metric in PPC. So popular that it sparked a little side discussion during last week’s #ppcchat when I called it misleading. Let me explain why.
A few months back Google announced to change the ad rotation setting for certain campaigns to optimize for conversions. This move has sparked some controversy, but I believe it’s actually quite beautiful.
It’s important to note that only campaigns which meet certain criteria will have their ad rotation changed. These criteria are: Continue reading
Over at the RKG blog, George Michie wrote an article on a very interesting question: How much do you matter to Google? Or, in other words: How much would it cost Google to lose an advertiser?
George looked at the decline of CPC’s in different scenarios of ad auctions where the top advertiser dropped out. He concluded that it matters a great deal how tightly packed an auction is. If there are a hundred advertisers with similar bids and quality scores the top advertiser is easily replaced with minimal declines in CPC’s. But even in loosely packed auctions the decline isn’t that big.
I was fascinated with the idea and started to play with the numbers myself. But I didn’t want to look only at CPC’s as they are just one part of the equation. While CPC’s matter a lot to advertisers, Google’s attention is on revenue. So how much revenue would Google lose if an advertiser dropped out of an auction?