Analysis of Contextual Advertising Algorithms Ranking on Yandex Direct and Google Adwords

In modern world where everyone uses a phone or a computer to search for information, there is a huge opportunity for advertisers who want to show their ads to people on the Internet. It is no surprise that IT-companies, including Google or Yandex, create special platforms by using which business is able to launch digital marketing campaigns aimed to cover millions of people every day. Google Adwords and Yandex Direct remain the most popular ways to advertise on the Internet for more than 16 years, by showing relevant advertisements for people, who are really interested in seeing them. This way of promoting goods and services is called as contextual advertising or sponsored search. The popularity and simplicity of this method evoked a huge interested of companies, which started using both platforms and constantly increasing their marketing budgets. Nowadays the main problem of contextual advertising is to reduce costs, while being the first at the relevant search results. The paper elucidates main factors of ranking ads content as well as a potential impact of these factors on the ad ranking in the sponsored search. The study concentrates on the working algorithms of two largest platforms for contextual advertising, that is Google Adwords and Yandex Direct. In order to compare both platforms with each other four different advertising campaigns were launched. The data, consisted of cost-per-click and cost-trough-rate, was analyzed by using A/B testing. It has been found that a quality of advertisement (keywords, relevancy, etc.) seems as the major factor of ranking ads content and plays different roles during campaigns on Google Adwords and Yandex Direct. The main findings of study provide an opportunity to decrease cost of advertisement and increase its efficiency.