February 1, 2005, 12:00 AM

Going for the top spot

Google`s new policy limiting the paid ads it will show per keyword per URL stands to have a major impact on those sponsoring paid Google AdWords, but it remains to be seen exactly how it will shake out.

Google’s new policy limiting the paid ads it will show per keyword per URL stands to have a major impact on those sponsoring paid Google AdWords, but it remains to be seen exactly how it will shake out. As of January, Google shows only one paid ad per search query for affiliates and marketers displaying the same URL.

A search for “books,” for example, prompts Google’s engine to inventory all ads running for the keyword “books.” If two or more ads are competing under the same URL, it will display the ad with the highest Ad Rank, whether it’s the marketer’s own ad or an affiliate’s. Google’s Ad Rank is based on the ad’s cost per click rate and the click-through rate on the ad.

Google’s stated aim is to improve search relevancy. It’s seeking to clear redundant paid listings resulting from a widely-used tactic under which affiliates sponsor an ad, send users who click on it to the marketer’s side via an automatic re-direct, and collect a commission on that click-without even having their own web site landing page. Under the former policy, popular searches could bring up several such listings directing searches to the same URL, but the new policy requires ad sponsors to send those who click on their listings to their own landing pages first.

Competition for the single spot available for ads linking to specific URLs from specific keywords has marketers reviewing their polices regarding affiliates’ bidding, says Kevin Lee, CEO of search engine marketing firm Did-It.com. “Some marketers have lost control of the brand and the messaging, letting affiliates have it. They are afraid if they tell the affiliate not to bid on the URL, the affiliate will take their knowledge and go work for the competition, and they’ve become dependent on the affiliate. An affiliate can be an important partner, but marketers have to ask who they want calling the shots.”

Lisa Wehr, CEO of search engine marketing company OneUpWeb, says the rules change will also dial up the bidding war between affiliates. “It’ll heighten the competition for a period of time between affiliates, because the one who bids the highest gets the position and the link” to the marketer’s URL, she says.

Chris Henger, senior vice president of marketing and product development at online marketing company Performics, says there’s no one answer on how to approach Google’s new policy. “Each marketer has to make a business decision around affiliate bidding. We suggest that it’s made on the basis of cost analysis and brand,” he says. “With Google’s shift in policy, I think we’ll see that it is more difficult for affiliates to compete. But affiliates who can convert traffic effectively will continue to be able to bid.”

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