| This 91 message thread spans 4 pages: 91 (  2 3 4 ) > > || |
|The Future of Adword.A Possible Rant.But True None the Less|
Adwords, PPC, CPC
I know this has probably been discussed, but I am curious to know how other forum members feel about where the future of Adwords is headed, especially when it relates to CPC and Keyword Bidding.
I've been managing an account for a little over 2 years, with a very healthy budget for a small business, it exceeds a little more than 1 million dollars.
When we first started there were very few people in our space and naturally as the business grew, more competitors came in and began bidding on our keywords, the price of the KW slowly began increasing and obviously today the price per KW has increased significantly, even though we have maintained and progressively increased our CTR, spend lots of cash and convert.
So what can we look forward to with Adwords as we head into the future? Its seems to me that as we and other businesses continue to market on the web, the space is going to get limited and the barrier to entry will get more difficult with time.
Question: How much is enough? And what will the market be willing to pay for space on Google in the future? Will small businesses be squeezed out by the bigger guys eventually? Will Adwords be a relevant avenue for small to medium sized businesses?
As more markets become saturated I dont see how Google can manage this unless they put some controls on costs. What i do see is an opportunity for other search engines to offer better, cheaper space on their serps.
Again, I am sure this has been discussed before but I really would like to hear what others think. Personally I see a very difficult road ahead for businesses and just like SEO, which has already begun to fade and is becoming more difficult by the day, I believe Adwords is going to get just as bad or even worse....
A fixed rate ad model would be the death knell for google.
Some verticals are so expensive I'm surprised that the FTC hasn't poked their head in with a look towards predatory/discriminatory pricing laws. That being said I think the market will probably fix that issue before any regulatory body gets to it, google in particular has been very busy embedding itself into the power corridors via crony appointments to the appropriate oversight bodies. For the time being they have a pretty cozy relationship with the folks in charge.
Crappy search results, overpriced advertising model, the void will get filled soon enough, the space is actually over ripe for another disruption.
I agree wholeheartedly that its ripe, especially in certain verticals. Its ridiculous to see how expensive it has become no matter what you do, no matter how hard you work in optimizing your account.
The issue I just wrote about is a perfect scenario. We get in the market early, we bid, we fix and get better month over month, 100's K dollars are spent building a solid account. Other businesses come in and bid on the same KW, no problem there-its the cost of doing business. But instead of the costs leveling out for us eventually, they continue to climb every month and every quarter, making our cpa much higher, affecting our margins all the way around. When does it end? And how much is enough for Google.
I really wish someone in the FTC looked further into this. Google is way too big at this point to be ignored.
Yes Adwords are far to dear, the ROI is far too low, and there is too much work involved.
I am only an amateur when it comes to Adwords.
But I have been thinking this for 3 years.
I know because I am a small one man business.
There is only so much that you can sell your products for
And there is only so much that you can pay for a click
Is the internet nearing saturation point ?
"Is the internet nearing saturation point?".
I think what is reaching a saturation point is that Google only has one SERP page for a particular keyword search and is limited to the amount Paid Ad space on that one page. Maybe in the future they could consider rotating the first and second page for the same keyword entered, but of course that would mean that the value of the second page wouldn't be as high as the value of the 1st page. (Just talking out loud here)
Some searches or pages are a bit more in high demand than others and obviously there are variations of keywords that will pull up different pages, but the point is; there is a limited amount of space available on one page, for a certain keyword that truly converts (I am not talking about garbage KW's), its getting progressively more expensive and pretty soon the barrier to entry will become extremely difficult. There has to be a better way to manage whats coming ahead.
All that work it takes = reason my consulting / management company exists... one man's trash is another man's treasure.
Eventually, to stoke more competition, perhaps they'll find a way to avoid the need for our work, until then, we're busy lil beavers.
Eventually the model that they are using will not last. Yes in the interim it will stoke more competition, but there is no way that model will serve the many. Sooner or later it will ONLY serve the few, the very "rich" few and when I say the very "rich" few I mean it; because I don't consider our investment to be small. Most small businesses make on a yearly basis what we spend on PPC and even we are being affected and believe me, we are very good at what we do. What's even more compelling is that we are in a vertical where we started from scratch, did things right, spent some serious cash (in the millions) made very good progress and yet we see that not even that is really working. Which leads me to believe there are other things working against the merchant. Makes you wonder why they opened the access to view which competitors are bidding on your keywords. (we cant be the only ones alluding to an issue)
RhinoFish, I've read some of your posts and I am familiar with who you are. I know you know what you are talking about, but trust me...the grind is only getting worse, its not getting any better. More work for less return....They need to tweak their platform, period! If you've been in the business a long time, as I know you have been, that's the reality....
BTW: This is'nt happening on just one of our accounts, its happened on many I manage, its a trend and its very real.
Who will crack first ?
The Adwords companies ?
The SEO companies
The Advertisers ?
We all want sales and exposure.
It seems that Google is the only winner at the moment.
They make their 24 billion each year.
Look at the initiators-THE ADVERTISER/Merchant/"Google's Customer". If he/she is not taken care of, it will eventually affect the SEO and Adwords Agencies.
Where's the money? its with the Merchants. The guys spending money on branding are limited, so what are you left with? The product and service merchants. If they are not assisted in some way, it will affect them and eventually others. Something has got to give!
Today there's a whole lot of talk about the "death of SEO", I guess you can make a case for it. However PPC is not too far from reaching that point if Google doesnt make some type tweak or adjustment in the next few years. In the meantime, as long as they make their 24billion, we have to wait & see!
(Please keep in mind I am not saying PPC is dying off, I am simply saying that its headed in a very negative direction and it will only get worse based on their current model)
Oh, I also forgot. When it relates to agencies: Google is already competing against them and I have a feeling that movement will intensify.
I've personally seen Google offer free workshops in a major city, offer free websites in return to offer advice on setting up an Adwords account. Look on this forum alone and see how many people claim they have been contacted for the FREE SERVICE.
Would USERS switch to an engine that featured more competitive merchants?
It's hard to see the future clearly. More so when it appears PPC cannot be different than it is now. Things do change and so will PPC most likely but not in the ways you may think.
>> the space is going to get limited and the barrier to entry will get more difficult with time.
Not sure what you mean by the first part, space is going to get limited. I think you mean, given there's only so many ad spots, that's the limit. Technically, that's not true. There's an infinite number of spots available, but only a certain number per result page. Don't forget there's more than the first page, although that's where you want to be. Also, it's not always the same advertisers. Many reasons why some advertiser ads don't show which means to fill the inventory, another advertiser takes their place. So I don't agree with the comment that space is limited.
I do agree with the second part. In fact, it's difficult now and really has been all along although maybe more so these days because of more competition and the system itself having evolved. I don't do ads the same way today I did two years ago because of the changes. I had to adapt to take advantage of new features. That's something the regular Joe is not doing. That makes it more difficult for him and also a reason my PPC management business is doing better, as it appears Rhino's is as well, at least for the Joes who realize they need to do PPC but also need expert help.
How much is the market willing to pay?
As much as they are willing and able I guess. One thing most don't seem to realize is this: the advertisers set the prices. They are also the ones in control of their ads' quality. There are too many getting in and not understanding. Therefore their quality is low. Many compensate with higher bids, maybe higher than they should be and that's what drives prices up.
In most cases however, at least in my mind, if you've been doing Adwords for a while and have high quality, your CPC shouldn't really go up that much. You may see blips once in a while and my guess is a new advertiser that overly bids. Once they discover the error of their ways, they leave or adjust and things go back down. The problem is in a crowded field, someone else will replace them so the CPCs are artificially high. The only way to protect yourself as much as possible is increasing your quality.
The same thing will happen on other search engines, if you believe that advertisers will migrate there. In fact, I don't see things being any better now. One client of mine is on both Adwords and Bing where his CPC is higher, a bit lower position and lately, lower conversions.
>> Eventually the model that they are using will not last.
Totally disagree. The model works for all involved. If only advertisers would be smarter, that would bring down costs. But I don't expect that to happen.
Do you have another model in mind? A fixed price? That won't work.
The only new thing on the horizon is image ads on searches, Google Merchant. I'm guessing in a few years it will be video ads.
>> Would USERS switch to an engine that featured more competitive merchants?
Excellent question. I guess for those in the buying mood, I would say yes. After all, when you are ready to buy, you go to comparison sites. I think Google is headed in that direction with Merchant. It could mean a bigger piece of the pie for them.
|After all, when you are ready to buy, you go to comparison sites. I think Google is headed in that direction with Merchant. It could mean a bigger piece of the pie for them. |
How does a pay-to-play "comparison" engine drop costs for consumers? The merchant participating in the scheme is adding to his cost and passing that through. The market is a lot smarter than that .. actually the market is smarter than any centrally planned web economy (google).
Not sure what you mean by the first part, space is going to get limited. I think you mean, given there's only so many ad spots, that's *the limit. Technically, that's not true. There's an infinite number of spots available, but only a certain number per result page.**
That's exactly what I mean, there are limitations and some spaces (like ours) have very big heavy hitters. Yes some of the smaller guys come in and out depending on their budget and whether or not they know what they are doing.
**>> Eventually the model that they are using will not last.
Totally disagree. The model works for all involved. If only advertisers would be smarter, that would bring down costs. But I don't expect that to happen.**
Is it really up to the advertiser? I know Google is there to make money, but what about their other clients that are there day in and day out. Its not the advertiser, we are at the mercy of G and NO, the model doesnt work for all involved because it obviously penalizes those spending and optimizing their accounts. I will agree to disagree. The reality is found when it comes down to dollars and cents. Its the best math I know!
BTW: I am referencing a real scenario that unless you spend the dollars we've spent over time, 2-3 years worth to be exact, you could not make the kind of conclusion I am writing about.
In any case thanks for the feedback, I love to hear this kind of insight. I am a new member, I've been lurking for a little while and I really value the forum.
"They need to tweak their platform, period!" -- the pace of change of their platform is dizzying, they are tweaking it all of the time.
Most often, when my team looks at failures, there are the same issues - too many (non-mod) broads, not enough negs, improperly setup conversion tracking, poor choices for targeting, bad ads, too wide an aim, lack of understanding of how Display is effectively targeted. Outside of the ads themselves, I often see a very poor understanding of their other channels, where other sources are being given far too much credit for generating sales - that one mistake, is a biggie. If you count things wrong, or don't count some things, all hope for real reach and success is lost. We often pass on new clients where we can see their other channels running amuck, it takes considerable effort to "teach" some executives what their other channels are doing to their attribution model. At a recent conference, I talked about it peripherally as a panelist, then one-on-one for a good 15 minutes, and the person I was speaking to had understood everything I said exactly backwards. I'm telling you, it's attribution, at it's core, where many go wrong. Sure, there's a lot more competition today that yesteryear, this will always be the case. So will appropriate aim, understanding how your customers buy, and such. I continue to see a lot of weakness in how others run PPC - when you do that, CPCs go way up, and you're tanked. For me, it's rare to conclude "this niche is saturated with great merchants and well run PPC and their CPCs mean this won't work for any new entrants".
|Eventually the model that they are using will not last. Yes in the interim it will stoke more competition, but there is no way that model will serve the many. Sooner or later it will ONLY serve the few, the very "rich" few and when I say the very "rich" few I mean it; |
I see it differently. When you aim off target, QS is slaughtered, your CPCs are inflated, and your omni-present reach becomes VERY painful, even affecting the areas you should be reaching for - QS forces everyone to be more relevant and specific. QS is the greatest democratizing force in PPC since it all started, it ensures many, many different entrants can succeed in the auction. The smallest store can trounce the largest whenever they are more relevant. Imo, without QS, it would be as you describe, a story of whoever has the most money takes all the spots. Fortunately, QS is David's comeuppance over Goliath. I really enjoy that part of what we do. I'm a huge fan of the little guy taking out the big guy!
Big guys have deep pockets, but they way they tend to pay people (salary) means performance pay folks like us, will always be able to kick them in the knee. Example, it's Sunday, I'm working, thinking about PPC... the salary guy at Target is drunk at a BBQ, he's 26, college educated, and will never dig thru data like I will. I'm gonna kick his ass for a long time to come - Google's QS and my biz model make sure I have an advantage. Shoot, in 3 years, he'll be doing something else, and some newbie will be in his chair, and I'll be making her life miserable - and nobody will be looking at the numbers close enough to even know I'm there. Big = slow, stupid, blind, content, unmotivated, undriven. Small = thanksgiving prayers given to G's QS and to the sloth nature of Goliath. Goliath should scared, we're coming in numbers, and we're driven - and he's partnered with cross channel cannibals (and doesn't even know it!) - all the while he's most focused on his integrated KPI dashboard's background color.
Ya know Rhino when I read your post I juxtaposed what was written against what google actually markets..
easy, fast setup
Pay only for results
haha, people are still buying what they aren't selling.
But I'm glad someone can make their system "work" even if it isn't the BIG, SMALL or MEDIUM guy.
The QC score stuff is just a bit of window dressing covering a discriminatory pricing model.
TypicalSurfer, so right on. Couldn't say it better myself
"The QC score stuff is just a bit of window dressing covering a discriminatory pricing model."
Sorry to beat a dead horse, but who are they discriminating against?
I says they discriminate against the irrelevant (and I claim that's not only good, but an opportunity for the many). Who do you say it is?
|Sorry to beat a dead horse, but who are they discriminating against? |
Discriminatory pricing simply means preferential pricing or other accommodations for some customers giving them an upper hand in commerce resulting in less competition. Auction based PPC by default works this way (hence the cover of "quality scoring").
Where it becomes an issue for regulators is when the effect may be "substantially to lessen competition or tend to create a monopoly in any line of commerce."
poke around for "Robinson–Patman Act".
I actually think PPC has morphed into predatory pricing, going from innocuous penny clicks to advertise a good or service to eating entire margins, eliminating smaller players. The end result is the same, lesser competition, less choice for consumers, basically a harmful practice (from a regulatory standpoint).
If taken to be true, and I'm not saying it's not, those are all collateral damages, rather than something that was Google's intention at the first place.
|I actually think PPC has morphed into predatory pricing, going from innocuous penny clicks to advertise a good or service to eating entire margins, eliminating smaller players. The end result is the same, lesser competition, less choice for consumers, basically a harmful practice (from a regulatory standpoint). |
Saying that, I believe G's intention was to use the data it has, and make more money in the given situation (predatory pricing).
Google Analytics, conversion data, everything has been given to G on the plate, so they could see the margins, earnings, etc.
Would anyone think they would ignore such data?
I never agreed with the market driven price per click that ignores lack of competition in the given time and space.
How many times a question was posted about "why I pay so and so while there are no other ads?"
And then a number of wizs would retell what G says about it which I never fully agreed with as long as that ad is still the only one in the space. Preview tool gives options to test it.
In short, yes, Google squeezes out quite a bit by using the situation where there's always something else to be said and explained, so most of the people give up at the end without fully figuring it out.
Google is an animal with no head nor tail you can catch it for. It's more like an amoeba.
Google's algorithm and rules:
Try the content network. Google Serp isn't the only game in town online. Consider Facebook, or other ad networks.
Google prices are getting high because everyone is flocking to it. The serps will reach a saturation point unless the number of searcher grow or the competition shrinks.
Consider this. Find your best Keywords. Find the sites that rank the best, and have good Quality. Negotiate A direct ad on their sites or maybe even see if it's feasible to buy the sites. Also consider the first second and third site.
Use the Sites to get traffic.
I know of site where the average cost per click on the SERP is about $3.00 dollar with a ton of competition and traffic, but the owners of the First, Second or Third sites only make about $1,000 dollars a month each. If you paid them a fixed $1000 dollars a month you could replace all thier Adsense units with Ads directly to your site.
I heard the Number One Serp entry get's as many click as Number one Ad in the Serps.
And with a person you can get a flat fee, and negoiate a long term deal.
So explore and research the content network.
the beauty of adwords is it made it so easy to advertise online, the curse of adwords is it made it so easy to advertiser online!
in the days of automation, going the old school route "phone calls to site owner" could help you out, and go where you competition isn't. Let them burn their profits in the search, then catch the traffic with organic.
"Price control" is something they do in North Korea, it has no place in the modern world and would only serve to create inefficiency.
Ok Snoopy, so pay $20 a gallon on gas...There needs to be a balance.
I think the big takeaway from the OP and what rankmaster77 is conveying is that there is a near million dollar advertising budget looking for a new home. Assuming rankmaster77's experience is not unique to him I would expect the market to step up and start building better houses.
Thanks rankmaster77 for the insights on your end.
|Discriminatory pricing simply means preferential pricing or other accommodations for some customers giving them an upper hand in commerce resulting in less competition. Auction based PPC by default works this way (hence the cover of "quality scoring"). |
I think is why forums are dying off. :-)
You didn't answer the question, just levied more confusing, unfocused accusatory conspiracy theories. Boards are full of them, reasonable people find these discussions to be huge time bandits. But, I'm pig headed, so let's keep chatting about it.
Look, name these parties that G, according to your theory, is giving favorable treatment to. Or levy a believable reason why G would do this. Or heck, make up something funny.
In an auction, the more people bidding / competing, does tend to drive up prices - Google wants exactly the opposite of what you claim - more bidders is better for them, fewer is worse. Giving any party the "upper hand" is bad for Google.
Here's the truth - G serves the visitors, that's their "secret" conspiracy. Bidding advertisers will be plentiful where ever there's traffic - serve the searcher, advertisers will line up in droves. Make the searches super relevant, people will keep clicking - and making G billions. Sell out to a few parties, search quality (in the searcher's eyes) will go down, and competing engines will take share from G. G holds no love for any advertiser, they love the visitor - they're conniving like that, they know who ever wins over the consumer, will have the advertiser's attention.
To imagine that G is conspiring with a few companies to give them an edge, to reduce relevance, to allow their own searches (and market share lead) to suffer, so they can get kickbacks from a few (when they can convince the many to bid up every auction - and there are lots of auctions every second) is lunacy.
No offense to you all, you're interesting, but imo, badly misguided.
There, plenty of ammo for conspiracy theories to be levied at me. Time to take it up a notch everyone! My uncle Sergey says you won't dare, but his pal Larry bet him $200M "fun" bet that you will...
I think that the "little elfin googlers toiling away making magic for their users" ship has sailed but nothing wrong with a good fairy tale. It's kind of sweet in that "I ate so much candy I'm going to be sick" way.
[edited by: TypicalSurfer at 9:15 pm (utc) on Aug 28, 2012]
With large advertisers spending less on newspaper adverts (which is what I see) they may have more money to spend (waste) on high ppc click bids.
| This 91 message thread spans 4 pages: 91 (  2 3 4 ) > > |