Minimum Bids… Going, Going… GONE

23 September, 2008

Google Has Ended (for the time being) Minimum Bids

Google Turns Around

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!


Layoffs at 2nd Tier Networks – Miva, Vibrant Media

7 July, 2008

The AdViking scouts are hearing from unofficial but reliable sources in the field of battle that both Miva and Vibrant Media have made staff layoffs in Europe during Q2 2008. This is regrettable for the employees who are getting their pink slips (or P45s) and we hope that all good people find rewarding and fulfilling employment quickly. Alas, AdViking is not hiring for our latest adventure. At least it is summer and a good time for a bar-b-q and some strong ales.

We do want to note that we believe these layoffs are a sign of the general slow down due to the economy and perhaps the natural advertising cycle. However, we do not believe that the online ad spend is going down overall, only that the spend pattern will migrate to the bigger and better quality sites (like portals) or ad networks and rich media channels (ie, video) – all while we watch online advertising out pace TV advertising in the UK. And is predicted in general to grow around 20% or a bit less depending on what report you read. Those players further down the food chain and/or offering poor products (and traffic) will suffer. We fear that many established players as well as start-ups in the ad space or with ad funded models will be forced to trim back and some will perish. This is a time when it is going to be safer at the head of the long tail of advertising.

On a related note we were reading the UK NMA this week which is touting a story titled “Portals drop ad rates to fill space” (note: paid content, best save your money) and we don’t buy it yet – the idea that spend is shifting away from portals or that their is price pressure. The article goes on to imply that display (banners, brand advertising – which matters!) are being impacted first and that as spend tightens it is shifting to ROI or direct response products. AdViking thinks this is a poor strategy by media buyers as it will only drive up the cost of media or clicks on the likes of AdWords and that then pushes ROI down. Down a rat hole of DR chasing Google’s tail… All media buyers please re-think this strategy, try to get that right mix of spend and help prove the NMA story wrong. Anyway, digital is the king of advertising now. Long live The King!

Post-script:

Miva accounded they are doing a 15% staff cut, including killing it’s Italian Media Operation


Software Company Drops AdWords – replaces with charity program

18 June, 2008

      We love this story up here at the AdViking stronghold. Jama Software – makers of a web-based project management app called Contour – are ditching Google AdWords in favour a viral PR led marketing strategy or “social public relations strategy.” ReadWriteWeb have lots of details and good info about this on their post (RWW). There is also more info on the Jama charity program here and the Jama marketing directors blog here.

The question is will this work? We hope so. The fact that Jama were not getting good ROI on AdWords is significant. We wonder if there are other advertisers in a similar position? It would also seem that this means that other online ad channels would be of value – especially if it were easier to place the ad buys (banners, vertical networks, 2nd tier PPC networks, etc). We know there is still a lot of friction in the digitial ad ecosystem and know Google is not the only channel. More on this meme at a later date.

For now we say spread the word and give Jama Contour a try!


Google Trademark Game… Advantage Brands!

7 May, 2008

Advantage Brands

As posted early last month Google finally opened it’s barriers and let advertisers ‘back in’ to bid against brand names. Whether it really was to do with the ‘Mr Spicy‘ ruling in the States or, as we suggested at the time, more to do with the bottom line, advertisers have flooded back to take advantage of the levelled playing field… Or have they… ?

One thing that Google have made clear is that, unlike Yahoo! and MSN, they will not allow brand names to be used in the written ads. So this causes one obvious and one not-so-obvious problem.

The obvious first: you can’t use the brand name! So, for example, if Peugeot have protected Peugeot then you can’t advertise ‘Peugeot’ in the advert unless authorised. Therefore you have to use tautology… “Brand New Pug” or “NewPeugeots” or “The Entire Range of the car you want”.

The not-so-obvious is more interesting… As you probably know – Google measures adverts by a Quality Score, this score has affects both the Minimum Bid as well as the Ad Position, meaning a poor performing ad must bid higher to achieve the same position.

Whilst this makes sense, one of the key variables to decide the quality score is … ad relevance… And the main defining factor is using keywords in ads.

Therefore, say you’re bidding on ‘Peugeot’, or phrases including ‘Peugeot’, and cannot use the word ‘Peugeot’ then relevance will drop, thereby increasing minimum bid and lowering position.

So the real test of where Google sits will be how (or whether) it adjusts Quality Score in light of it’s own policies.

Check AdViking for the latest on episode two of the trademark wars… ‘The Brands Strikes Back”!


What’s Your PPC Flava: Enable, Disable, Engage?

18 April, 2008

Adviking notes that Google have turned the screw in terms of search-driven PPC. Not only do they have greater search share, but they also earn more per page view. Is this merely down to increased competition within the keywords? We don’t think so.

Think about this: Google offers time targeting, geo targeting, offline editing, publishing of phone numbers on ads, hands-off editorial process, wider range of payment options, tight control over keyword and a much more intuitive UI. Do they do this for the advertiser? Yes and no. Talk to any advertiser and they will tell you that targeting is crucial, they know their target cost per acquisition and Google comes out very favourably. All of the list mentioned either makes targeting easier (= more valuable, = higher spend), or the process of publishing quicker. Google ENABLE.

What about Yahoo! ? They launched their new Search Marketing product with much fanfare, but it pales when matched up to the above list. It sort of has geo-targeting… but that’s about it. Worse, it seems to hamper advertisers: the editorial process can be a real pain, ‘advanced match’ is rather arbitrary and they make odd decisions… For example you could have an offline editor, but access is restricted. Medium and low value campaigns are capped to just 20 ad groups (so clients who would spend more don’t). They could offer time-targeting, but don’t.

AdViking wonders whether the hook-up on ads between Google and Yahoo! is also because Google is so much better at extracting value because it understands advertisers, rather than DISABLING them, like Yahoo! does. Maybe they should take some notes…

Credit must go to MSN, they have tried to catch up with Google. AdCenter started off clunky, but has add good functionality and targeting, including profiling. It’s not quite there, but improving rapidly. However MSN has one giant challenge: low reach! By the time a business has set up Google for a trial, and then moved on to Yahoo!, they omit MSN – some still think that Yahoo! run MSN ads (they used to a couple of years ago). Not only that, but because of the low reach, geo targeting or profiling becomes pointless because it reduces even popular terms to the odd click through a day. So, the challenge for MSN is to ENGAGE – both the public who still don’t use their search much, as well as the advertiser who sees it as ancilliary to business.


Note to Google: You Can’t Please Everyone!

10 April, 2008

AdViking notes that Google has just backed down on it’s full ‘Trademark Protection’ policy in the UK. It had previously allowed brand owners to block anyone advertising on their keywords or using their brand names in their adverts. Google claims that because this change of policy only affects keywords and not advert copy, it will stop passing off… but that depends on how clever the ad copy is!

The reality of the situation is that Google are opening the marketplace back up on these terms and, lets face it, once the competition starts up, then the brand owners are only one position of many.

However, AdViking believes that the takeup of such trademark protection was snowballing as increasing brand owners were taking advantage of it. Reports in the news that AdWords revenues were stalling was affecting share price and, hey, who are Google not to listen to their poor, starved, shareholders?

We also welcome the opening up because Trademark Protection policy was actually being used for price fixing… or at least attempts at price fixing. A few months ago you’d have loads of adverts on ‘cheap peugeot’ on Google UK, now there is only one.

So, bring on May 5th, when the market hots up again! Should be interesting…