But then how do you decide which of you gets 1st, second, etc?
it will never work, and here's why: there's a sucker born every minute. someone's always willing to jump in the game and "give it a go", especially if the CPC is relatively "affordable".
totally wide open, barrier-free market. that's the "beauty" of the Overture model (from their perspective, anyway). low barriers to entry mean anyone can play.
so as soon as you make a move to lower rates, some 3rd party will jump in the game and ruin the cartel. even if only for a few days. but a new player every week still screws up any efforts to price fix. :(
It may not work for 'car loans', but it might work for more esoteric terms that have limited competition.
if you "do the dance" with bids where there's only one or two other bidders, you get the same cartel results you're talking about, defacto...
- start at 0.06 / 0.05
- bidwar up to X (effectively "taking turns" on top)
- at X, drop back down to 0.05 again, leaving the other bidder with a gap.
- if/when they come back down to 0.06, you go to 0.07 and start the dance again.
Party A spends $100 to make $150 + / -
Party B spends $100 to make $150 + / -
Cartel C spends $200 to make _____ [$300?] anyone?
Maybe you just need to move from affiliate status to partner status thus tweaking the profit margin.
seoboy is right, price setting cartels are instable even with relatively limited number of players (think OPEC).
With high number of potential bidders (and no punishment for cheaters) I doubt it would work. Good luck anyway:)
If you're 4th place with Overture, you lose.
slick idea. I know it wouldn't work for my firm, but it only makes sense for the independent/small business.
Then by sharing stats and creative text/days of the week, you could nail down more accurately what works, and benefit the whole group.
Must say, great idea.
Tried this - it didn't work. Reason?
>as soon as you make a move to lower rates, some 3rd party will jump in the game and ruin the cartel...
Exactly what happened!
Actually, it appears to me that since many guys are now using ppc software I was able to lower many of my bids on overture and still not lose any rankings. You just need to monitor them often.
sounds to me like those other guys have bad software :)
.If the bariors to entry were high enough I think it will/does work fine. barriers terms would have too much random competition, but there are many industries that only have a couple dozen players. Such dialog between competition would replace the De facto price stabilization, or circumvent it. Why have a bid war that settles down when you could save the cash by calling up the competition before hand.
Again, this wouldn't work for viagra, car loans, real estate, or anything that dabbles into affiliate programs. I was thinking more of terms like 'camero parts', and 'steinway pianos'.