That's not how this model works. There are three general models of online advertising:

- CPM: you pay per impression (ie how often the ad is seen)

- CPC: cost per click. You only pay when the user clicks.

- CPA: you only pay when the user clicks and does something (eg buys something)

Display advertising (putting ads on third-party websites eg AdSense) is primarily CPM. Search advertising is primarily CPC (or at least this is how Google operates; I assume DDG is similar).

It's important to understand the implications of this.

In a CPC model the system that selects what ads to show you is doing so to maximize revenue. Since they only make revenue when you click a lot of effort is spent in determining the predicted CTR (click through rate) because:

Revenue = # of impressions x pCTR

So it's not just a question of who pays the most for an ad (that's how display advertising works largely) because a $1 CPC with 1% CTR earns more revenue than a $10 CPC with 0.01% CTR.

This is why I have less problem with the CPC search advertising model than pretty much any other model because your interests and the interests of the search engine are largely aligned. You want the results that are most relevant to you and that might be an organic search result or an ad. As long as the ads are clearly display as such, it's fine.

Also with search there is intent. You've searched for something so there's something you want. Who's to say an ad won't be the most relevant result?

You missed out the other model of cost per slot, e.g. Daring Fireball’s ad, various podcasts, etc. While you’re paying for visibility it’s not a direct CPM as there’s a fixed cost for the time.

Lots of big podcasts are going CPM and inserting ads into each download.

It seems that what you are describing though would tend over time to result in a search engine that is principally geared towards returning commercial results rather than amateur/hobbyist results since the interests of search/potential advertisers are always going to be in closer alignment then hobbyists who will almost never be running an ad campaign.

This has been my main criticism of Google's direction the last 15 years or so. Seems like search results use to populate handsomely with personal sites and blogs run by hobbyists uninterested in extracting a dollar from the visitor. If the search results could return either (a) a link to a book sold on Amazon or (b) some Phd's site discussing the topic it seems likely that (a) wins and (b) gets buried somewhere on page 2.

CPM should be updated to CPK.

The M in CPM is the Roman numeral for 1000. It's an archaic term, and should be replaced with the SI unit for 1000. Though coining the phrase "kilo-impression" would be a stretch.

Technically the M in CPM is "Mille", the French word for thousand. The origin of the term is from traditional print publishing.

100 per cent correct.

I read it as "cost per Mpression".

I did too, during Marketing 101 in college. And this illustrates the need to update the term.

> I don't know, I just can't trust an ad format where I know the top click just spends the most money.

Why? That's exactly how it works every where else: Radio, TV, Billboards. If two people want the same spot, the person who ponies up more money gets the spot.

And that’s how Bing served malware

And that's how your local newspaper serves you telephone numbers to ambulance chasers and medicare fraudsters.

You already trust your search engine to rank results based on your search terms. They can do the same thing for their ads without having to do additional tracking. These features can pretty easily be added to the auction if you consider bad ads as a cost to your company.

You end up showing the ad that maximizes something like bid * click_rate + quality_score * quality_value. quality_value can be tweaked to change the balance between short-term revenue and ad quality.

>But the ads that go to the top should be the most valuable, not necessarily go to the buyer with the deepest pockets.

It is my understanding that similar to Google, the first couple of links might be ads, but the rest are organic.

I just did a search for a movie I like - To the right is an infobox with a blurb from Wikipedia + links to rotten tomatoes and IMDB. Under it is an amazon ad to buy a copy.

The top 5 links are IMDB, Rotten Tomatoes, a definition of the word, and a trailer.

Seems pretty unobtrusive and on point to me. If I wanted to buy a blu-ray of the movie I'd probably click that ad.

> But the ads that go to the top should be the most valuable...

Why? I'm not using DDG for the advertisements. I'm using them for search.

> I just can't trust an ad format where I know the top click just spends the most money.

This seems orthogonal to whether the actual target is a keyword or user-tracked data. If two firms want to target the same demographic (e.g., Ford and Chevy want to target 20-something Dodge Ram owners who search for 'truck'), something has to decide which advertisements to display on top.

What if they actually disclosed the CPC or CPA value?

I know a lot of the big-money keywords used to be things like lead-gen arbitrage in the legal and financial sector. If someone is searching for "life insurance quotes" and they see that the top advertiser is some comparison-shopping site paying $50 per click, will they still think of them as an unbiased referral service, or someone who has to bury that $50 cost somewhere?

Are you implying that there’s an ad format that you can trust?

> But the ads that go to the top should be the most valuable, not necessarily go to the buyer with the deepest pockets.

That's the point of a search engine. If you show those as ads, you'd just be duplicating the top search results every time.