That's fair. I realize that bid amount is just one factor among a few, but I suppose my concern stems from the fact that there is a positive correlation between bid price and ad ranking at all.
To put it another way: increasing bid price, all other things being equal, will increase ad ranking. I would posit that this relationship has zero benefit for the ad consumer, and may even serve as a detrimental force, essentially degrading the relationship between ad ranking and ad quality by introducing a completely arbitrary factor.
(I believe some economists have postulated that the amount a company spends on advertising actually serves as an informational signal about the quality of the underlying product. I'm doubtful, but I'll admit it's a potential weakness in my argument.)
As far as I can tell, the only reason AdWords uses a bid auction system is to make more money; I would be interested to hear how factoring money into ad ranking could possibly add value to AdWords for the end-user.
It's interesting -- how does Google actually measure quality? The naive approach would be to measure the number of clicks an ad attracts, as an initial indication of usefulness is how many people click. But that encourages ads that look like search results, frankly. Or ads for products people would have naturally found through organic searching. And Google's never point-blank asked me if I found an ad useful, though perhaps they could time how quickly I clicked another link from the same search result, and how often advertisers themselves keep paying for the same keywords.
Ultimately, ads need to make more money for a company than they cost to run. And my main issue is I'm being sold twice here -- first by being shown ads, and second by being featured in ads. This "double dipping" seems a bit much to me, so I opted out.
To put it another way: increasing bid price, all other things being equal, will increase ad ranking. I would posit that this relationship has zero benefit for the ad consumer, and may even serve as a detrimental force, essentially degrading the relationship between ad ranking and ad quality by introducing a completely arbitrary factor.
(I believe some economists have postulated that the amount a company spends on advertising actually serves as an informational signal about the quality of the underlying product. I'm doubtful, but I'll admit it's a potential weakness in my argument.)
As far as I can tell, the only reason AdWords uses a bid auction system is to make more money; I would be interested to hear how factoring money into ad ranking could possibly add value to AdWords for the end-user.