Getting Better Ads?
link: https://www.wired.com/2015/09/facebook-doesnt-make-much-money-couldon-purpose/
This article talks about different advertisement strategies for Google and Facebook. According to the article. Google is using generalized second price auction for its ads while Facebook is considering to use VCG. We talked about both of these methods for advertising in class. The ideas of these two methods discussed in the article aligned with what we discussed in class. For Google’s ads, advertisers with the highest bids get the spot and pay the second highest prices; for Facebook’s ads, advertisers pay the price that equals to the harm they do to other advertisers
Why Facebook argues that it’s a better strategy to use VCG? Since when advertisers bid for a spot, they will need to pay for the loss they cost on other advertisers, they will win only if their ad is the most relevant to the content. Another good thing is that it prevents advertisers from gaming, so they will focus more on making good ads instead of trying to game for good spots with the bidding system.
To go further, the ads are also different in how it appear to audience. Google’s ads are on top of or on the left or right on a webpage, while ads on Facebook are more of a mix with the content. This results from their different needs for ads. For Google, they need to direct people to ads, but for Facebook, they are trying to extend the time people spend on it. That makes sense because Google is trying to earn profit with ads. However, for Facebook, as a social media, it needs to keep audience longer on their app. In this regard, there’s no better ads but how different strategies can satisfy different companies’ needs.