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|The Corporations Won't Lower Their Bids|
call me when they go bankrupt
Corporate pride, greed and mismanagement will be the death of the world economy. Despite the fact that they are losing money hand over fist, the same eyesore corporate ads are still all over AdWords at the same bids as last summer.
eBay, you are losing SO MUCH MONEY! Why are you still paying 70 cents per click for "black plague" so that advertisers wishing to turn a profit can't get traffic at rates which accurately reflect the horrible retail climate we're in?
This X-mas shopping season was 60% worse than last year yet I paid exactly the same as I paid last year because the jackass corporate fools refuse to show weakness by lowering their bids to a profitable level.
Gee, with stocks down 50% you wouldn't want anyone to think you were having trouble would you? No, no, no pretend everything is OK until you show up in Congress hat in hand looking ever so pathetic.
Call me when they go bankrupt so I can get some traffic at reasonable rates.
I actually did make money this month but the overall results were awful. What's going to happen in January and February when retail sales are terrible even in normal economic times? I can't tighten my belt much further before I squeeze myself to death.
|Corporate pride, greed and mismanagement will be the death of the world economy. Despite the fact that they are losing money hand over fist, the same eyesore corporate ads are still all over AdWords at the same bids as last summer. |
I don't think you know how larger corporations work. In this case, any that have more than about 30 employees.
It has NOTHING to do with pride or greed. It has a lot to do with things basically just getting lost in some long forgotten corporate cubbyhole.
Jan 2007: CorpX hires internet marketing guru to "enhance internet presense".
June 2007: Said guru farms out adwords to Company B to setup keywords. Company B simply buys a copy of a dictionary and places bids on every possible combination of words.
Jan 2008: CorpX increases advertising budget by a fixed percentage without regard to where it is going, so adwords budget increases 25% with no increase in results.
Oct 2008: CorpX fires internet marketing guru and most of the staff, but fails to note that all of the millions of adwords are still running, and all those charges get billed automatically and continue to get paid.
Sinced nobody is left at the company that knows where the money is being spent is still around, the automatic cash flow for useless overpaid ads continues on for the next two years until someone new finally steps in and wonders why they are spending $33,000 a year for "black plague".
I used to work for a company many years ago that paid thousands of dollars per month for over 3 years for long unused & disconnected phone lines. Online ads are the new phone lines.
[edited by: Wlauzon at 2:50 am (utc) on Dec. 23, 2008]
Instant, measurable ROI doesn't matter to these companies. To them, it's like billboard or TV advertising. If their competitor is doing it, they need to be doing it too. There's also the classic marketing executive that's trying to justify their existence, so they throw out phrases like lifetime value, market presence, etc. If asked directly to justify ROI, they'll pull a rabbit out of a hat.
|Why are you still paying 70 cents per click for "black plague" so that advertisers wishing to turn a profit can't get traffic at rates which accurately reflect the horrible retail climate we're in? |
How do you know they are actually paying that much per click? And if you're not bidding on "black plague," why should you care?
In some cases, an economic downturn is when many companies should be UPPING their advertising budgets, not cutting back (although it does depend on the actual niche and other circumstances).
|There's also the classic marketing executive that's trying to justify their existence, so they throw out phrases like lifetime value, market presence, etc. |
Which are perfectly valid. I have a client whose best selling B2B products are consumables - i.e. once they're used, they need to be reordered. (No, not inkjet or toner cartridges) A typical corporate client will buy over and over again - often in increasing amounts. Looking at the ROI for a single purchase would be very misleading in some cases - but looking at it over the entire history of that client, it works out amazingly well.
(That's not to say ebay is doing that with the black plague - I'm just saying, that's one reason WHY those buzzwords exist)
|...jackass corporate fools refuse to show weakness by lowering their bids to a profitable level. |
|If asked directly to justify ROI, they'll pull a rabbit out of a hat. |
|Call me when they go bankrupt |
Seems like you both may be underestimating your competition a bit. With very large campaigns (those dealing with millions of keywords & a wide spectrum of sometimes very dynamic product assortments) it isn't difficult to find individual cases where a keyword, ad, or landing page is less than optimal - even if the campaigns were built via the most advanced technologies. These nuances are really what make SEM so fascinating, but it's also what allows the smaller players to compete with the larger players... If you can exploit your competitor's blunt efforts with a finer-tuned instrument, you can create a nice little niche for yourself.
But, to think that large companies aren't sophisticated enough to know if they're making money or not... or that they would lose money out of mere ego or naivete... seem to me to be a pretty gross miscalculation of who you're up against.
eBay was in desperate trouble even before the credit crunch. Their AdWords bids are the equivalent of the Big 3 guys flying to their Congressional meeting in private jets. They won't change, can't change and investors need to know. It isn't that they don't know that they are losing money it's that they don't know what else to do. It's all about propping up the stock price, not profits.
To those affiliates who were negatively affected by their sneaky transition to the eBay Partner Network thereby receiving a 50% or more pay cut can get their revenge by short selling eBay, inc. stock in 2009 ;)
I'm talking more about big box brick and mortar retail companies. They and their agencies justify they're bidding practices as brand awareness, or that online ads drive "foot traffic", or that first time purchasers will come back again and again. The big agencies that handle these accounts drive and encourage this kind of behavior, whether valid or not, because most often their fees are affected by the customer's spend. These are agencies dream clients - spend as much money as possible, with very little optimization, and talk your way out of the negative ROI if the hammer comes down.
Why do so many people have the preconceived notion that it is the fault of the major corporation that we see increased cost and less in ROI from a year ago?
I am not saying that is what you are trying to say, but it made me think that there are a lot of people that are blaming so many different things on the poor numbers this year compared to previous. It was in Time magazine recently that Google will be seeing a 2%-3% decline in 2009 and that anyone who depends greatly on online advertising should see a similar decline.
Itís not just the United States that is having economic issues, its global. So we are in the very early stages of a global decline in online spending. At least thatís what they are saying in the media.
Even knowing hat to be the case, some may have forgotten that there is one common similarity with all of these issues in the online marketing world. Google is the puppet master and its going to dictate to each of us how we will spend our money as long as they remain the top dog.
I thought about this for several months and am of the opinion that it would not be an unreasonable thing to see Google turn the dial closer to our max bids to squeeze a little more out from all of us. I mean after all a little here and there from each AdWords advertiser is not a huge amount individually, but when you look at the bigger picture and take those individual advertisers as a whole you will see entire segments of Googleís advertising base paying just a little more with similar results in revenue they saw prior to the increase.
That makes just as much sense to me as the corporate players not budging.
And on that note, can you blame corporations for not budging? It is costing them just as much money, but many have more to lose if they are not #1. A good example would be if someone had a company creating widgets and had a trademark on widgets, but because Google permits conquest ads competitors and affiliates are crowding and forcing the creator of the widget to raise their bids and its forcing everyone around them to raise their bids.
Nobody is going to benefit from that with the exception of the one company who stands to gain the most from it, Google.
Just my two cents.
|I actually did make money this month but the overall results were awful. What's going to happen in January and February when retail sales are terrible even in normal economic times? I can't tighten my belt much further before I squeeze myself to death. |
It sounds to me that, rather than blaming other companies, or suggesting that you know better what THEY should be doing, that you spend your time looking at your own business model(s). Look, if your gripe is that you aren't making enough money these days, then blaming someone else doesn't miraculously cause you to make more money.
Hey, I know the frustration, and things are tough everywhere, and not going to change soon, so either you figure out a better business model, or give up and get a job or find another way to make money. Blaming anyone else but yourself doesn't solve your problem.
While recently doing some research, I saw not one but two adwords ads on the same page (that's against the TOS IIRC) from a company that has been mentioned in the same news headlines as the word 'bailout'.
So I guess if you care, you've got a case for corporate greed.
But I don't care. I also disagree that the big companies are driving up costs. Or if they are, that one should be concerned.
The fact is, the SE's provide you the way to beat the deep pockets. It's called increasing your CTR.
These big corporations have found their local village idiot. They've recruited him and placed him in charge of their adwords campaigns. So if you can't beat them at adwords, I'm not so sure it's their fault.
Some of the most satisfying times I've had when running PPC campaigns is watching a multi-billion dollar company try and knock me off top spot, with CTR's about 1/10 of mine.
These are the same people that run ads with titles that say 'Ad Title Here'.
In fact, I'm planning on running a PPC campaign sometime in the new year. And the adwords results for my niche right now are dominated by huge companies. And I'm actually excited about the prospect - it means I have to compete agains almost certain incompetence. This is a marketplace we want to be working in!
In these days of corporate fraud and financial swindles, I would not be surprised if adword bids were artificially manipulated to some degree to improve profits. JMHO.
How do you know that the big corporations who do have deep pockets are not turning a profit? Down economy and a financially stable company could try to put some competition out of business.
I will go with the theory that the people who managed the Adwords accounts are long since laid-off. What you are seeing is Adwords auto-pilot until somebody realizes they are blowing money on these terms.
I bid on a keyword for a specialized consumer product. We get very few sales for it because the market is tiny. Of the 6 companies that are bidding on the term, we are the only ones who are actually selling the item. I have no idea why these other companies ever bother, Ebay included. So like somebody else suggested, they just loaded up a dictionary of terms without regards for what they are actually selling. The marketing departments, filled with old school marketers i am sure, only care about getting traffic.
Google must be laughing all the way to the bank.
It could also have to do with auto matching, perhaps they are using it and its serving ads in places that it shouldn't.
"Corporate greed" has been the catch phrase of the day for a few years now.
Sounds catchy, and everyone hates the Big Evil Corporations, so it creates an instant reaction of "Yeah, those evil folks are conspiring against me/us".
But you gotta wonder why personal greed is never mentioned. Most of the posts I see that reference Corporate Greed actually mean something like "they outspent MY greed"...
|I will go with the theory that the people who managed the Adwords accounts are long since laid-off. |
To address your point on lay-offs, I can't think of a stronger market for search engine marketers then right now. (Which is good for all of us on this message board!) Of the several companies that I know that went through lay-offs this year, the SEM departments were absolutely untouched. If marketing depts. are to focus their spend towards measurable or higher ROI inventory, they will pull money from almost any other channel (display, branding, offline) to focus as much as possible in SEM and SEO.
I agree 100% with poster boy. Search Marketing positions are not getting touched where i work. In fact, it is in high demand because even though our costs have gone up this year, its still by far the cheapest and best ROI we have in our marketing department.
Actually I would say that the comapny i am emplyed at made more online revenue in 2008 than 2007. Most of which came from google.
But at the same time, the gap between profit and cost is getting narrowed by the economy and what I beleive to be Google pushing all of us closer to our max bids.
Seriously, who regulates when who and how Google operates their ads? The answer is simple, its Google, so they have all of the control and we are essentially at their mercy.
|Instant, measurable ROI doesn't matter to these companies....There's also the classic marketing executive that's trying to justify their existence, so they throw out phrases like lifetime value, market presence, etc. |
Who's to say they aren't right? Before pay-per-click advertising came along, savvy direct marketers were renting mailing lists and sending out expensive catalogs. (Many still are.) To major-league companies, the difference between a 25-cent lead and a 50-cent lead probably doesn't look like much when that extra quarter is being spent to acquire a customer who may be good for repeat business and whose mailing address can be rented out to other companies.
|This X-mas shopping season was 60% worse than last year yet I paid exactly the same as I paid last year because the jackass corporate fools refuse to show weakness by lowering their bids to a profitable level. |
I'm surprised that we're not seeing more money flowing into the internet as these large companies abandon more traditional media channels. The cost per customer acquired on the internet are probably the lowest of any other sales channel.
I know that PC Mag is no longer going to print. They say its because they dont need it anymore, but I think they have lost that base of customers that were always subscribing to the magazine. Those print ads are expensive and sometimes hard to measure.
Over the past few years we have reduced our print ads to almost nothing, now advertising in only a couple of the technical trade magazines. (and even then, only because their digital editions are indexed by the major search engines).
For what it used to cost us for a 1/8th page ad in just one magazine that we used to advertise in, we can now get something like 7000 clicks for onlne ads.
The ROI - for us at least - for print publications simply does not compute any more. In our last print ad in one magazine about 3 years ago, we had a coupon code offering a big discount for buyers of a particular item to try and track the ad effectiveness. At the same time we made the same offer online with a different code, and the online code vs print pub code won out by a huge margin - and cost us about 1/10th as much.
Which means we are spending more now for online ads, mostly Adwords. Which drives up competition for the most popular keywords in our field.
As far as corporate greed driving up prices, I would suggest the reasons are much more varied and complicated.
I believe it's part and parcel a symptom of mismanagement of funds which stems from changes in personnel in the organization. As business increase infrastructure, it becomes increasingly more difficult to manage facets of the corporation, and then there is the issue of managing the management, and so on.
seem to me to be a pretty gross miscalculation of who you're up against. - Not the case, I suspect.
Ive worked for large multi nationals who really dont have a clue about how to achieve the basic minimum tasks, they survive because they can afford to make errors, they dont survive because they are clever.
just loaded up a dictionary of terms without regards for what they are actually selling- Yes this is a very common trick, many Adwords firms dont appear to know what they are talking about, are very slap dash when it comes to spending money thats not theirs
[edited by: Essex_boy at 8:39 am (utc) on Dec. 25, 2008]
|Ive worked for lage multi nationals who really dont have a clue |
OK. But, is that who the OP's original rant was addressing, though? At first, this post seemed to target "eBay"... then it broadened to "corporations"... then "big box brick and mortar retail companies" and now it's "large multi-nationals"? Who exactly are we disrespecting? :)
If this post is specifically about "large companies who don't have a clue"... then, ok. I still think they present enough of a vulnerability within the world of SEM that you should be grateful, and not spiteful, that they're clueless... but, if this post is about "large companies" and it's an assumption that this collective group somehow doesn't have a clue about SEM... simply because you found a handful of illogical keywords... or because you may have worked at a large company and saw the dysfunction close-up... then, I'd say that's a sweeping stereotype that's just far too broad to really have any merit.
I'm confused, isn't the orignial OP just upset because large companies are able to place higher bids and still make money?
That's due to economies of scale and I've gotten squeezed out of a business because as a "little guy" I just couldn't compete not matter how much I tried. In fact, it seems that their bids were higher than my margin.
Anyway, those same companies that outbid me 4 years ago are still going strong today. They had scale, better distribution channels, and higher margins - they squeezed me out. It happens.
I retrenched, learned from my mistakes, launched a new business and this was successful. In some ways I'm glad that battle with big companies is over - they did me a favor in the long run.
that's the beauty of a free market. if these companies are wasting money, they will fail, and you will be able to buy these ads at a fraction of the cost when they dissapear.
i know it might be troublesome to you to see your competitor enjoying a large part of the market share... but just concern yourself with making your website convert better then theirs and in the end, the free market will see to it who survives and who does not.
do you have an affiliate program? does your competitor? why not look to improve that first? if your website is as good as you think it is, your product/service is also good, and it converts better then your competition, then what are you worried about?
|Seriously, who regulates when who and how Google operates their ads? The answer is simple, its Google, so they have all of the control and we are essentially at their mercy. |
Who regulates Google? How about WE regulate Google? Who would you rather trust, the government to tell us all is well, and to send your money to Google, and that they're keeping them in check? Or would you rather put your trust in yourself, to monitor your own bids and ensure a decent ROI? Or hire a third party company yourself and have them regulate/audit Google on your behalf?
Why is everyone complaining about Google squeezing profits? I learned a long time ago, never to become dependent on any PPC revenue. I only use PPC now for very unique or local search phraes, where I can get good ROI. If you want high traffic search, you need natural rankings, and that only comes by being the industry leader, period. No one said anything would be easy. Focus on a niche or local region.... own it and become the leader.... and expand from there.
"How about WE regulate Google?"
I can not agree with that. We do not regulate Google, Google does. I wish it was the other way around, but its not, at least in my niche it isn't.
Dont get me wrong, we do own the niche, in fact we created it, but to say we regulate Google is an overstatement in my opinion.
I know we can leave if we want blah, blah, but the point i am trying to make is that there is still money to be made in Google, but they are feeling the crunch in the economy as much as anyone else and they do reserv e the right to do what they want. I dont recall ever seeing in the TOS they could not get people closer to their max bids.
I do not necessarily think that Google should have govenment oversight, but if they dominate market share with no regulation, we are essentialy allowing them to tell us what to pay.
|if they dominate market share with no regulation, we are essentialy allowing them to tell us what to pay. |
Wasn't this thread originally about greedy corporate advertisers who, through their bids, tell little guys what to pay?
| This 32 message thread spans 2 pages: 32 (  2 ) > > |