Minimum Bids… Going, Going… GONE

Google Has Ended (for the time being) Minimum Bids

Google Turns Around

In a move which has escaped much comment (at least on the blogsphere I frequent) Google has dropped Minimum bids. Previously, particularly on popular or competitive keywords, minimum bids meant that you couldn’t just bid a few pence and get an ad published – you had to bid what Google deemed to be an amount worthy of appearing on the esteemed search engine… but not any more.

The Logic For Minimum Bids

The logic seems to be simple – if you have businesses bidding £1+ on keywords, then why allow the user to click on a link for only 5p? Money lost I think… so, if the top bid is £1+, force all the others to bid say 30p to join the queue. More money to Google.

The Fallacy Behind Minimum Bids

Ah, but the rub is this… advertiser resistance and natural listings.

Firstly, with all the tools at their disposal, the bigger spenders know what they are prepared to pay for a visit. They were priced out and rather than doing as Google expected (upping their bids), they resisted such changes turned to other routes to market. Leaving popular search terms rather empty and without choice.

Secondly, because listings became more empty, the natural listings on the pages took greater clickshare.  And as these don’t provide income for Google, the revenues from advertising actually fell on a per page basis.

Surely Not a BackTrack?

Google has bravely taken the bold step of retreating, realising that people prefer choice, both in adverts as well as searches. I expect Yahoo to follow suit once they’ve sorted out catching up with Google on their most recent list of ‘mee toos’. MS Ad Center… er… I don’t think minimum bids is something they have the luxury of indulging in for the next few years.

So long Google minimum bids, I am not sure whether I’m going to miss you or not… must check my Analytics!