An Advertisement Cascade
Google AdWords is undoubtedly the largest advertising program out there. It uses the keywords its users type in as a way to match advertisers to users, and ultimately clients to businesses. Over this past summer, Google came out with a brand new addition to their tool that ties together two seemingly unrelated topics we have recently covered in the course.
The new feature is called the +1 button, and is offered as an option for users who click on an ad after obtaining their search results. If a user likes an ad they visit, they simply click on the +1 button. Then, a little +1 will be shown next to the display ad, which allows users to ultimately “suggest” the ad to future searchers.
As we learned in class, there are preferences for a position higher up on a page for an advertisement, as these slots usually generate a higher clickthrough rate because users are more likely to click on ads placed there. However, with the addition of the +1 button, this may not be the case. An ad in a lower position may ultimately gather more clicks than one in a typically better position, as it may have a +1 listed next to it while an ad in a “superior” slot may not. This will lead to a potential increase in clickthrough rates for lower positions in AdWords. This kind of behavior goes against what we would typically expect.
This inconsistency is caused by the idea of an information cascade, another topic we have covered in the course. This is a situation where a user will ignore his own private information, and base his decision-making on merely the choices of others. It is essentially the idea of “jumping on the bandwagon.” While a user is typically inclined to click on an ad further up the page, he may decide to choose an ad further down simply because of the addition of a +1 next to it. This is because the user believes that the choices of many other users may be more relevant than clicking on a higher positioned ad (his own private choice).
This connection leads to the idea of what we can call an advertisement cascade. It is similar to an information cascade, except that it is specific to the case where the information provided is what advertisements users prefer, rather than just people’s preferences in general.
It is interesting that these two topics come together in this unexpected way. In one new feature on a commonly used tool, we see how technology is allowing for new ways to spread information. This truly shows how interconnected the social and technological worlds are, and it is no surprise this is illustrated by a product created by none other than Google.
Source: http://www.stepforth.com/blog/2011/google-adwords-1-button/