Ben Gilbert: evaluation

Transcript context

…e was still in this sort of display ad business or the traditional ad business where you’re chasing big brand advertisers. And Google said, “Hey, if you’ve got a credit card, I don’t care who you are. Throw $50 at us and you can run some ads and let’s see if this works for you.” So Google goes after small advertisers and basically creates the modern search advertising marketplace that we’re familiar with today. By going there, after those small advertisers, they really created a new market too because if you’re Coke, you can go deploy $100 million on billboards around the market and you can buy these brand advertisements. But if you’re using search ads and you have metrics on the number of people clicking through for the first time, there’s a real market for direct response advertising and not just brand awareness ads. Right. It’s a different type of advertiser where it’s more direct response advertising as opposed to brand advertising which traditionally still is in the display business as opposed to the search business. That’s even true to this day to a large extent. So the second key innovation is it’s not just pay-to-play. You can’t go into a keyword, be willing to pay $100 per click and be guaranteed at the top. Google of course being Google, again, wants to have this sense that “Hey, it’s a win-win-win for everybody. We want to have the most relevant ads” so that the ads will almost be useful to a searcher, not an annoyance to a searcher. So, they introduce this key innovation of the click response rates affect the bidding process for the keyword. So it’s not just the person that pays the highest gets the top. It’s some combination of the person willing to pay the highest and the person whose ads gets clicked on the most and thus making that ad probably the most relevant.…

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