PPC prices in Japanese market - Up, Up, Up,

Massive increase in bid prices in last 6 months

[whats up skip]

I have seen a massive increase in the bid prices that people are paying particularly in Overture (JP), but also in Google.co.jp.

Most keyphrases have doubled in the last six months, but many have just gone up in an unbelievable way.

Cairns (Japanese) top bid prices (Yen)
200 199 135 126 105

Now this is just the location name not "Cairns hotel" or "Cairns tour", but there is significantly more traffic for just "Cairns". The prices for the other combinations have not gone up as much.

"Cairns" was around 35 yen only a couple of months ago for the top position.

The increase in PPC advertising has also resulted in a devaluation of SEO and paid Yahoo JP directory listings. Google JP traffic also seems to have dropped a bit compared to Yahoo JP, but it is difficult to confirm this.

This increase is most likely due to Japanese businesses becoming more aware of the value of PPC advertising, increase use of the internet for shopping and an improvement in the overall Japanese economy.

The problem with this rapid change is a business model that was very profitable 6 months ago, may not longer be viable.

[kazonik]

PPC is definitely booming.

There are several keywords with a price tag over 1,000 yen.

>>The increase in PPC advertising has also resulted in a devaluation of SEO and paid Yahoo JP directory listings.

IMHO, the increase in price has not devalued, rather increased the value of SEO. The high PPC prices, confirm what the market is willing to pay for (values) targeted traffic be it from SEO or PPC.

I find it is easier to justify spending several thousand dollars on SEO to someone who is already paying that in PPC every month.

Peace,
Kaz

[David_M]

I saw a similar thing happen when I first started with PPC on google adwords. I was the only bidder for about a month- then everyone caught on. Was nice while it lasted :) Change in strategy, find low cost alternative keywords and add Adsense to benefit from competitors high bids.

I agree that high PPC results in an increase in the value of SERPS and SEO work.

[whats up skip]

I agree with SEO is more valuable with Google, but most of the time in Yahoo, they have the four ads at the top of the page, then their directory listings, then more ads at the bottom. This all means that the search engine results may be pages further back and really of no value.

[kazonik]

Whats Up Skip >

Very good point about Yahoo!

For most of the generic/competitive keywords, the organic results are at best 1 or 2 pages below the directory/sponsored listings and at worst, several pages below.

There has been a huge spike in the number of (paid)directory submissions to Yahoo Japan since they switched away from Google.

Peace,
Kaz

[bill]

Another valuable aspect of this is that the Japanese market is finally becoming educated on the real value of targeted traffic. I can't tell you how many people I talked to who just didn't get it. Now that you have these bidding wars on the PPC you're going to see more news stories and thus more education of the people who might be the ones who control the advertising budgets. Internet advertising in Japan in general is still a good deal cheaper than other media. And SEO in Japan is still underdeveloped...there are a lot of untapped market segments out there.

I think David_M's strategy is a wise one. If your ROI doesn't justify the spend on the top words then start peppering your list with lots of more targeted, multi-word, low cost terms.