Search Engine Ads: Auctions Or Page Rank?

A Google R&D post provides a glimpse at the complexity of internet ad auctions. The research considers advertiser perspectives such as budgets and bidding strategies.

See: Market Algorithms and Optimization Meeting

The auction model for advertising links on a search engine is only one of two tracks: 

• The auction model is pay for play
• Organic page rank growth is web page relevance for play

How does an advertiser split resources across these distinct strategies? 

Perhaps, advertisers should use their budget to build their web site's page rank instead of participating in ad-words auctions.