23 Musings

Now I've just been proved totally wrong. I wrote a while ago that paid search budgets may actually start decreasing (slightly) or stagnating by the end of 2007 in travel as marketers got their heads around affiliates, other new behavioral ways of marketing online and moved back to seeing the huge value in SEO. Also a backlash against paying per click has been expected for some time as marketers try to get everything measurable on a CPA basis.

Seems that's not the case though. Robin Goad of Hitwise has a post which talks about some paid and organic search trends in travel and shopping sites through 2007. One really interesting chart shows that the Hitwise Shopping & Classifieds categories paid search activity actually decreased in 2007 compared to 2006. Travel on the other hand grew by 15-20% during the final three months of the year.

Also, there a great chart showing the trend for paid search traffic to the two categories from late 2006 to the end of 2007.Interesting dip around July 2007 there. Anyone hazard a guess at what that may be? I know it's not the busiest month of the year but that's a hefty drop in paid search spend.

Google is trialing cost-per-action adverts on publishers sites in the U.S. I've been expecting this for some time as a natural progression for Adwords/Adsense to move to a similar model to affiliates. This will help advertisers avoid click fraud and see more of a return on investment.

More details on the trial are on the Googleblog.

Google is fighting for the right to allow it's paid search advertisers to bid on trademarked keywords. This strange move seems to have come about thanks to Google's ongoing litigation with Rescuecom, the litigation has been ongoing since September 2004.

Google has filed a brief in the case this week which makes a compelling argument as to why sales of trademarked keywords to it's advertisers should be allowed. Google say that companies associate products with competitors all the time in other forms of advertising and that so doing doesn't cause confusion for customers - which is what a trademark is supposed to protect.

Google's lawyers say: "Generic brands are placed next to known brands on store shelves for the express purpose of diverting customers from the brand they are seeking to another, and their manufacturers pay for that placement,advertisers deliberately select magazine ad placements next to articles about their competitors. ... All manner of companies pay for coupon placements selected based on a customer's purchase of their competitors' products. And so on. Of course they are seeking to 'hijack' or 'divert' consumers who have indicated an interest in their competitors' products. That's the point of contextual advertising -- to target ads at consumers who are actively interested in your type of product, rather than indiscriminately at the world at large."

It's a fairly persuasive argument but in my opinion could spell trouble for Google if the rule changed. Trademark terms drive a huge proportion of our paid search traffic and it's the highest quality (and converting) paid search traffic as well (for obvious reasons). Diluting that (which any change would) could make Google a less attractive place to pump our money and make us move to other CPA alternatives even quicker than is already happening.

So we're in the web2.0 age and the web's advancing quicker than ever, new interfaces, social aspects, interaction of users with data etc etc. One thing that hasn't changed is the model us advertisers pay for things like price comparison websites, pay-per-click. Google has used pay-per-click for it's sponsored listings Adwords product sucessfully and I wouldn't imagine that will change, but for your average price comparison website which is supposed to deliver much more qualified users isn't it about time they moved to a cost-per-acquisition model?

Being in travel we use price comparison sites a lot and derive a lot of traffic from them although not a huge amount of sales. Moving to a CPA model will complement the work these sites are doing to integrate content into their offerings, they're trying to increase the quality of the visitors they send through to us and so should increase the conversion rates. Running on a CPA model could then prove to be in their interests as they may drive less clicks ultimately but with greater conversion. Staying on a PPC model would mean they will lose revenue rather than gain from all their hard work to optimise the listings.

With cookie tracking so easy to implement and fairly accurate, keeping a track of the sales isn't a problem and most people do this anyway. Moving to CPA will also remove any risks of click fraud as there will be nothing to be gained anymore.

As I said, I'm not sure Google would ever go down this route for Adwords, search is much more about driving high volumes of traffic and the visits are never going to be as qualified as those from a price comparison site. PPC seems a little old fashioned as a business model for a website that should be driving sales rather than purely traffic!