Yahoo Happily Admits It Manipulates Ad Auctions To Get Advertisers To Bid More
from the that-doesn't-sound-legal dept
Sometimes you wonder if executives realize what they're saying before opening their mouths at times. In an interview with TheRegister, Yahoo's chief economist appears to happily admit to manipulating ad auction results in order to force advertisers to bid more:"When someone has a really high ad click probability, they're very hard to beat, so it's not a really competitive auction," McAfee told The Reg. "So that they don't just win [every auction], we do squashing. This makes the auction more competitive.While that may seem like a neat trick from an economics standpoint, it certainly seems like a pretty questionable business practice from an advertisers' standpoint. Having a company secretly manipulate the results of an auction to make participants pay more? That sounds like fraud. As Eric Goldman notes, this appears to be a lawsuit waiting to happen.
"It's like handicapping. We handicap the people with the high click probability."
This, McAfee said, can increase Yahoo!'s revenues. "The bidders respond by bidding higher. The one who was destined to lose is now back in the race, so they bid higher trying to displace the number one, and the number one is trying to fend them off so they bid higher too.
"We can make the competition a bit more fierce using squashing, even on keywords where there's not much bidding."
Filed Under: ads, auctions, manipulation, squashing
Companies: yahoo
Reader Comments
Subscribe: RSS
View by: Time | Thread
But dear lord, they better make it abundantly clear in their auction rules, because otherwise, isn't that deceptive advertising, to tell you you're bidding on something (placement order) but then not DELIVER that service?
I expect bidders, especially ones with low "quality", will be quite pissed. Lawsuit-level pissed.
[ link to this | view in chronology ]
Shill bidding is also illegal in many places.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
I like it
[ link to this | view in chronology ]
Yahoo?
[ link to this | view in chronology ]
Margin Call
[ link to this | view in chronology ]
If Google did something like that they would be busted for Anti Trust violations. Heck, Google gets busted for doing nothing wrong. But it's OK for Yahoo to do it.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Haha, subtle
[ link to this | view in chronology ]
Trade Secrets Revealed!
[ link to this | view in chronology ]
Where are the vitriol-spewing bloggers to call yahoo the spawn of satan?
Where are the DAs (at least the ones who couldnt get in on that Craig's List thing) to Champion The Protection of The People in demanding special internet-fairness hearings?
News releases by officials broadcast from the google headquarters to assure us all that "every step is being taken"
its almost like the people who are being encouraged and funded to attack the Big G don't dare say a cross word about anyone else.
you know. its just interesting.
[ link to this | view in chronology ]
Where are the vitriol-spewing bloggers to call yahoo the spawn of satan?
Where are the DAs (at least the ones who couldnt get in on that Craig's List thing) to Champion The Protection of The People in demanding special internet-fairness hearings?
News releases by officials broadcast from the google headquarters to assure us all that "every step is being taken"
its almost like the people who are being encouraged and funded to attack the Big G don't dare say a cross word about anyone else.
you know. its just interesting.
[ link to this | view in chronology ]
Where are the vitriol-spewing bloggers to call yahoo the spawn of satan?
Where are the DAs (at least the ones who couldnt get in on that Craig's List thing) to Champion The Protection of The People in demanding special internet-fairness hearings?
News releases by officials broadcast from the google headquarters to assure us all that "every step is being taken"
its almost like the people who are being encouraged and funded to attack the Big G don't dare say a cross word about anyone else.
you know. its just interesting.
[ link to this | view in chronology ]
Where are the vitriol-spewing bloggers to call yahoo the spawn of satan?
Where are the DAs (at least the ones who couldnt get in on that Craig's List thing) to Champion The Protection of The People in demanding special internet-fairness hearings?
News releases by officials broadcast from the google headquarters to assure us all that "every step is being taken"
its almost like the people who are being encouraged and funded to attack the Big G don't dare say a cross word about anyone else.
you know. its just interesting.
[ link to this | view in chronology ]
Where are the vitriol-spewing bloggers to call yahoo the spawn of satan?
Where are the DAs (at least the ones who couldnt get in on that Craig's List thing) to Champion The Protection of The People in demanding special internet-fairness hearings?
News releases by officials broadcast from the google headquarters to assure us all that "every step is being taken"
its almost like the people who are being encouraged and funded to attack the Big G don't dare say a cross word about anyone else.
you know. its just interesting.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
suspect Google does a similar thing
[ link to this | view in chronology ]