Marketing

Chrimson creates and manages insightful and individual Market Research programmes, then analyses and presents the results with clarity and intelligence.

Although we have a powerful Internet capability and use sophisticated data software, neither dictates our approach. Our questionnaires are written in close consultation with you and are designed to provide you with real, practical answers to important commercial questions, and to explore the full potential of your client relationships.

We are not limited to any specific sector, nor do we dabble in consumer opinion - we are firmly rooted in the business-to-business world. Above all we are straight-talking and down to earth.

Conferences

When I worked in economics I was mainly doing cost benefit analysis for government projects and I also spent some time studying the impact of broadband on a country’s economy. This sounds a huge distance away from online marketing and it is but a lot of the economic tools are the same.

The most obvious place to start is with Pay Per Click advertising on the search engines. Google use a bidding system which is based on a Vickrey auction, similar to DoubleClick.com. William Vickrey won the Nobel Prize for Economics in 1996 but his work on auctions was done in the 1960s. A Vickrey auction works with sealed bids (so you don’t know what the other participants are bidding) but the clever is that the winner pays the second highest price. More information visit Google AdWords - Online Advertising by Google

This seems a really strange way for the seller to run an auction because it would appear that they would get a higher price for their product if they took the highest price rather than the second highest price. However research has shown that this isn’t the case and in fact the seller does very well out of a Vickrey auction because:

Bidders are not worried about paying too high a price so they will bid more
Bidders who bid a high price are more likely to pay the market rate
The price the winner pays is determined by the other bidders, not the winner’s bid

However there is still a danger of winner’s curse. Winner’s curse is when the winner of an auction pays more than the market rate for the product being sold. In a Vickrey auction two bidders would need to over estimate the value of the product for winner’s case to take effect. As such sites such as German Lessons would not get listed properly.

So that’s the theory, but how does it work in practice? The first thing to clarify is that Google AdWords uses a modified version of the Vickrey auction. For this reason check out Google AdSense. The main change is that a quality score is also applied to the bids, adverts that are clicked on more frequently have a higher quality score than adverts that are infrequently clicked on. As an example, if one advertiser has a Click Thru Rate of 5% and bidded £0.50 per click but another advertiser had a Click Thru Rate of 2% and bidded £1 per click then Google would make more money from displaying the first advertiser’s adverts as the increased clicks would compensate for the lower bid.