Google’s Secret Sauce

Henry Blodget writes:

…over the last year Google has benefited from a fourth major growth driver: improving relevancy of paid links. The company apparently devotes massive engineering and computational efforts to analyzing which ads will be the most likely to be clicked on by any given searcher, and then displays only these. According to Saul, the system was introduced late last year (when I was concluding that U.S. growth was about to slow), and currently analyzes the user’s geographical location, the time of day, and other (unnamed) factors that might improve relevancy.

It was not news that Google determines which ads to present on factors other than the price an advertiser is willing to pay: the company has long said that an ad’s popularity with searchers is a big factor. Until now, however, I at least had not realized the extent to which this selection process is proactive rather than reactive. I also hadn’t realized that the company might present different ads for the same search based on geography, time-of-day, etc. Online media companies have been talking about both since the dawn of Internet time, but until recently, the reality has been disappointing.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.