Google’s $1 billion investment for a 5% stake in Time Warner/AOL extends AOL’s use of Google search for another five years and creates a global online advertising partnership. Among the new features of the partnership announced with the deal are an expansion of display advertising opportunities throughout the Google network, and making AOL content more visible to Google’s web crawlers.
One new feature that has search marketing providers intrigued is one that isn’t live, but rumored to be in the works on the paid search side: a bidding model that would allow marketers to bid separately on keywords for the AOL network, according to Kevin Lee, chairman of the Search Engine Marketing Professional Organization and executive chairman of search-marketing company Did-It.com. Currently, marketers bidding on keywords on Google have the choice of bidding on keywords on Google alone, or Google plus all its partners, which include AOL, Earthlink, Ask Jeeves, and others.
“We have found that for a lot of clients, the traffic that comes in off AOL converts slightly better than the rest of the traffic,” says Lee. “So if one had the opportunity to bid separately for that traffic, one would bid more.” Currently, marketers that want Google plus partners have to bid on the basis of a blended average. The value of such an option boils down to segmentation and retailers’ and catalogers’ understanding that different audience segments are more valuable to them than others, Lee says.
Google typically hasn't announced any new functionality until it’s up and live, but industry buzz is that the segmented bidding could make sense for both companies. Even if the relative percentage received by each off of every click remains the same, the percentage would be off a higher base figure in a higher-priced AOL segment, Lee says, adding, “It becomes a win-win.”
Beyond a potential a win-win for Google and AOL, segmentation of bidding could be a potential win for search engine marketing service providers as well. It would make managing keyword investment against ROI, already challenging for large keyword programs, even more complex for marketers wishing to pursue that option, without the assistance of an outside provider. “The math gets a little more complex, because you’d have to know what you are willing to pay for the two different segments. But with that challenge, if you are up to the task, either through internal resources or by partnering with a third party that can help you do the math, you could actually outmaneuver your competition,” Lee says.
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