GOOGLE REJIGGERS KEYWORD BIDDING

Allows Marketers to Buy Ads on Content Sites or Search Engine

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NEW YORK (AdAge.com) -- 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,” Mr. Herschberg pointed out, because in the search area, sponsored links are 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 the Google decision is helpful, and see it as validation of how it has 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 one cent cost per click from five cents. But, it is one cent if you bid for a keyword in the content network only, Mr. Holden said. And, the floating-quality minimum pricing policy still applies, he said, which means if you want to bid for a keyword that is known to be a good performer, you will likely get a rate close to one 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,” Mr. Holden said. “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.”

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