Friday, February 11, 2005

A Pivot In Keywords?

From Keywords for ad buyers, pay up.

A couple things I found interesting in here.

It's costing more and more to link Net ads to popular search terms

Even Google's biggest boosters expressed surprise at the results. On Feb. 1 the search giant reported $400 million in net earnings for fiscal '04 -- a whopping 278% gain -- on revenue of $3.2 billion. What accounted for the outsize profits? The high prices Google charges for search keywords, for one.

Still, with keyword prices soaring, businesses from eBay Inc. (EBAY ) to are rethinking how they use this powerful advertising medium. ``It's incumbent upon figure out how to moderate these quite significant increases in media costs,'' eBay Chief Executive Meg Whitman declared in January following disappointing fourth-quarter results, when rising search marketing costs helped pinch profit margins.

This is the first time I've heard of a company mentioning search marketing costs directly, let alone that they had an impact on the bottom line.

What type of money does Ebay spend on advertising to Google alone?

eBay was one of the moust sought after search words last yr. According to a study of top requested searches, eBay was right at the top. So if so many people were trying to get to eBay, why should they have to pay so much in search engine marketing?

This doesnt't seem very efficient to me.

Doesn't seem like whoever they use for a search engine markting company is doing a good job. I mean how hard is it to find eBay really?

To ensure they get the best bang for their search-advertising buck, eBay and others are doing everything from using different search keywords to redesigning their Web sites. The goal: getting folks who click on their search ads to actually buy something. ``Search advertising takes a significant amount of testing, work, and knowledge,'' says George Collins, CEO of, a seller of coffee items in Ashtabula, Ohio. ``Otherwise you're just wasting money.''

A couple things to consider, keywords, no matter how attractive, are commodities and cyclical. Their value will vary according to news and the economy. One thing that won't vary in value (according to the keyword model) is a trademark.

Google lost two trademark suits in the last few weeks. The suit accused Google of placing competing ads next to a search for a specific trademark. I'm wondering how much of an impct this will have if all trademark owners start to say "stop it Google or pay us".

I would think this would be a key component to the pay-per-click business model.

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