Overture Services, Inc. v. Google Inc.

Filing 116

Declaration of Ravind S. Grewal in Support of 115 Google's Responsive Claim Construction Brief filed by Google Inc.. (Attachments: # 1 Exhibit 1# 2 Exhibit 2# 3 Exhibit 3# 4 Exhibit 4# 5 Exhibit 5# 6 Exhibit 6# 7 Exhibit 7# 8 Exhibit 8# 9 Exhibit 9# 10 Exhibit 10# 11 Exhibit 11# 12 Exhibit 12# 13 Exhibit 13# 14 Exhibit 14# 15 Exhibit 15# 16 Exhibit 16# 17 Exhibit 17# 18 Exhibit 18# 19 Exhibit 19# 20 Exhibit 20# 21 Exhibit 21# 22 Exhibit 22# 23 Exhibit 23# 24 Exhibit 24# 25 Exhibit 25# 26 Exhibit 26# 27 Exhibit 27# 28 Exhibit 28# 29 Exhibit 29# 30 Exhibit 30)(Related document(s) 115 ) (Grewal, Ravind) (Filed on 1/30/2004)

Overture Services, Inc. v. Google Inc.

Doc. 116 Att. 15

Case 3:02-cv-01991-JSW

Document 116-16

Filed 01/30/2004

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EXHIBIT 15

Dockets.Justia.com

Case 3:02-cv-01991-JSWding Pros and Cons of Overture s Au jd Document 116-16

Filed 01/30/2004

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SEARCH EN G IN E

MARKETING
Search Engine Marketing, Oct 31 2002

A special Web site by Catalog Age and DIRECf

Pros and Cons of Overture s Auto Bidding
In February 2002 , when Google introduced its AdWords Select , the main innovations about it were that the links were paid for on a cost- per- click basis (rather than CPM) and bought in open bidding using what Google calls the AdWords Discounter.

Last summer , Overture released a new bidding method that is very similar , called Auto Bidding. What this means is that marketers have a new system to deal with and they are finding it has pros and cons.
Under the old system , you simply put what you would pay for a paid link and your result was ranked accordingly. Under the new system , you put in the very most you re willing to pay, and the actual price you are charged raises and lowers depending on what the competition is.

This new system is similar to the way bidding works on eBay. When you bid on eBay-- for a vintage fountain pen or antique catalog or what have you -- you put in the most you re willing to pay. The actual bid is the most necessary to be the leader in the auction. If someone bids higher than your revealed bid , your bid is adjusted to maintain your winning position. Ebay will continue doing that until someone bids higher than the highest bid you ve put in. (Ebay calls this proxy bidding.
Under the old , fixed bidding method (which Overture still offers), if you bid 21 cents for " window blinds " and
say you re willing to pay a maximum

Company B bid 22 cents , your sponsored link would appear after Company B' s. Under the new method , if you ofn cents (and Company B put in a maximum of22 cents), your link would appear first but you would be charged 23 cents.

On the one hand , the new system obviously has advantages in that you don t have to monitor (and change) your bids as much. And since the partner sites that take ads from Overture only take the top three or five or so (which is why the competition for them is so strong), you re guaranteed inclusion if you bid high enough. On the other hand , essentially, instead of telling Overture how little you re willing to pay for a lead , you much you re willing to pay. And figuring ROI is more complicated because the price you paying for each click changes according to how the bidding for the word goes.
now telling it how

other hand , just as the price you re paying for a click will go up if others are bidding up, it will go down if others drop out.
On the other

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