Advertising through a search engine is a little more complicated than just “highest bidder wins.” A recent Google patent application, a video from one of its inventors, and a couple of older patent applications that he co-authored show some of the complexities that an advertiser may face when wanting to advertise through a system like Adwords.
Back in October, 2005, Dr. Hal Varian gave a presentation on the advertising model at Google to a class at UC Berkeley. At the time, he had been working with Google’s Adstats team for approximately 3 1/2 years, as a consultant. It’s a nice introduction to contextual based ads at Google.
Dr. Varian is also listed as one of the inventors on number of patent applications from Google describing some of the decision-making processes that may be involved in determining which types and configurations of ads show up on content pages, and the cost of showing ads on content pages based upon ad and document scores. I’ve included links to those, and short introductions to them below.