Google reveals AdWords tip: 100% CTR yields very low min. CPC
During a press Q & A at the Search Engine Strategies Conference, I asked how Google can claim to organize all the world’s information and make it universally accessible, given that it unilaterally decides to not place ads for certain products, services or companies, merely because Google believes such ads would not meet Google’s gross margin objectives.
I presented Schmidt with a scenario:
1) A rare disease impacts five people in the world.
2) An independent scientist has a cure for the disease which he offers for sale and he wants to advertise it via AdWords to reach the five individuals afflicted by the disease; the five people are dispersed throughout the world.
Schmidt said that under the scenario I presented, the scientist’s ad would be run for the benefit of the five afflicted people.
I then asked Schmidt for clarification, and confirmation, that if any ad received a sole click, it would run on Google AdWords, and would not be marked “inactive for search.”
Schmidt did not confirm that such an ad would run and indicated that he would put me in touch with an AdWords specialist to discuss the issue. I have since been in contact with Google; I asked Google for detailed, concrete information about an AdWords campaign for the scenario I put forth to Schmidt and noted my particular interest in how Google customers actually experience AdWords policies.
Here is the Google response I received:
Advertising a rare product or service on a specific or rare query does not always result in the ad not running or the cost-per-click (CPC) being high. If, for example, a rare disease only gets 5 search queries per year and each time someone clicks on the ad, the ad will have a 100% click through rate. This is a very relevant ad and will have a very low minimum CPC. The rarity of the search term or the amount of queries it receives doesn't matter. The ad will get a high minimum CPC if the advertiser is advertising on popular queries for which most users don't find the product relevant. Advertising a rare product on a popular query doesn't serve our users well and is likely to get a high minimum CPC.
I have asked Google for clarification given the low probability of a campaign getting a 100% click-through rate, particularly a world-wide campaign aiming for 5 specific clicks. I have asked Google to provide a real-world AdWords scenario, rather than a Google hypothetical.
I am waiting.