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International: Google rejiggers keyword bidding, allows marketers to buy ads on content sites or search engine

26-November-2005
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International: Google rejiggers keyword bidding, allows marketers to buy ads on content sites or search engine

Answering the pleas of search marketers and agencies, Google has separated the bidding for keywords for those marketers who want to place ads on content sites and those who want to run ads only on search sites within Google.

Now advertisers will be able to place one bid for keywords to run on content sites – known as contextual ads – and a separate bid for search-only ads.

"The search marketing (agencies) have been asking for this since contextual was rolled out," said Peter Herschberg, Co-CEO of search agency Reprise Media. "And no matter how many times Google tells you they were responding to criticism, they did nothing."

Performance on contextual

Before this week's partitioning of search and contextual bidding, advertisers who bid for a keyword in AdWords would be automatically enrolled in the content network for that same keyword at the same bid price.

"Most of the time, performance on contextual was worse," Herschberg pointed out, because in the search area, sponsored links were appearing in response to consumers' direct search query. Now advertisers can determine the return on investment for search and contextual separately.

In the past, Google "thought it was more efficient to buy ads as a bundle… but now we've learned that there are enough advertisers out there and the field has matured enough that we can offer them this (increased flexibility)," said Richard Holden, director-product management, Google.

Smaller search vendors such as Kanoodle, a sponsored links ad network, which has always offered separation of contextual and search, said that the Google decision was helpful, and saw it as validation of how it had done business. "Kanoodle gets a representative piece of the pie because all of the publishers and advertisers that have been hearing us preach the story of separation for five years know that we are the innovators," he said.

Yahoo Search Marketing partitioned its contextual and search areas two years ago.

Reduces minimum bid

Google has also reduced the minimum bid in the content network to 1 cent cost per click from 5 cents. But, it is one cent if you bid for a keyword in the content network only, Holden said. And, the floating-quality minimum pricing policy still applied, he said, which meant that if you wanted to bid for a keyword that was known to be a good performer, you would likely get a rate close to 1 cent. But if a word does not perform well, a marketer ends up paying more to use that word.

"We've given more control, but we've preserved the aspect we think is most important," Holden said, adding, "We still apply a quality metric. Someone can bid more for an ad, but if it isn't performing, we will charge more for the ad or disable it."

Source: Adage

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