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I thought I would pass on that I heard at the end of this week Overture is planning on raising the minimum bid to 10 cents. Terms already bid at 5 cents will be grandfathered, but if you change the bid on these terms at all the minimum you can bid will then be 10 cents.
Has anyone received an email about this?
Here's something interesting - for a basket of about 300 terms, Adword traffic has steadily been increasing over the past 12 months. For the month of January, Adwords generated more clickthroughs than Overture for the first time.
As long as Google continues to allow a 5 cent minimum, they'll pick up plenty of business as a result.
Please add to or correct this list of minimum bids;
Adwords - 5 cents
Overture - 10 cents
Looksmart (US) - 15 cents
Looksmart (AUS) - 30-40 cents
At $0.05 a click we would be making money by driving account creation, but at $0.10 it is not worth it. Funny what a 100% cost increase does to small time ROI.
It says it takes a day or so to get the account to open, then a few more days to get your listings through editorial. Any guesses as to whether we will get grandfathered in or not, and is there anything we can do to speed up the process outside of paying $199 for their service package?
I've never dealt with Overture before and do not know if they bend the rules at all to get new clients up. We are a major US website and the size of our "future" spend might be enough of a tease. Any thoughts on this?
I have several keywords I will have to consider the tweaking that goes with the low ROI terms. Sometimes a push up to .10 can put them under and now I have no recourse but to shut them off if they can't handle .10.
With the grandfathering it would seem to me that having a fixed bid at the amount you want to pay would be a good move. This increase comes at a very bad time for us due to the political problems in our country and lack of business however with our preperations last week we should see little increase in costs. In fact in the long run it should prevent our exisitng competitors from increasing their bids on the lower cost terms.
Now 10 cents. I think it is ridiculous and, a doubling of costs overnight, makes a mockery of a supposed partnership between advertiser and search engine. But it doesn't achieve anything by us saying that. Overture are in a powerful position in the short-term and are therefore free to increase their minimum bid by 1000% over two years, as they have done.
But they should be smart enough to realise, as somebody else mentioned, that there are up-and-coming competitors who only charge a minimum of 1 cent listing fee. If you are canny enough, you can get huge amounts of traffic from these smaller engines for 2 or 3 cents a click.
They are digging their own grave, but let 'em enjoy the party while it lasts.
One other thing: further up the thread, there is a mention of the 1 cent grandfathered bids being raised to 5 cents. It set me into a panick and I logged into our Overture account to remove them as the profit margins on the uncommercial sites we have listed don't make it cost-effective for us to pay 5 cent per visitor. But but our 1 cent bids are still there and apparently still at 1 cent.
Just wondering when/if the 1 cent bids will be forced to increase.
Most of the higher volume keywords we use are already in the 10 to 50 cent range anyway, so it won't affect those.
But, not going to do anything right away - with the grandfathered going up, and prices in general going up, there might be less competition or at least fewer "sponsored sites" showing up.
Isn't the name of the game ROI?
I wonder how much money they will lose in the short term?
I don't think they will lose a bean. They've done their sums and realised that 90% of their revenue comes from 10% of their advertisers. The money that the deserters won't pay will be made up by the increased money from those that stay.
ROI, will still be the measure for us.
"New Minimum Bid
In the year ahead, you're going to see a number of innovative enhancements to the Overture service that will take your paid search program to a whole new level, allowing you to capture even more qualified leads from a wide range of affiliate partners. To help make these changes happen, as well as to offset the increased costs associated with securing long-term domestic and international distribution partners, Overture is instituting a moderate price increase, raising the minimum bid from $0.05 to $0.10, beginning today."
This time they felt it not necessary. The person I spoke with on the phone said something along the lines of "Coca Cola doesn't let people know before they raise their prices".
I run a small business with 100% of revenue coming from online sales. We spend 10% of our revenue on Overture advertising (around $30k per year), and another 10% of our revenue on Google Adwords.
Our net profit is about 10% of our gross sales per year - I don't think this sort of net margin is too uncommon.
Currently our Overture traffic averages out at $.05 cpc (average of around 1500 visitors per day).
A 100% increase in Overture costs wipes out our entire net margin.
Now sure, we can adjust, cut back in some areas, try to buy our goods cheaper, put more focus on reciprocal links and other lower cost promotion methods, but this will take time.
I was able to get in fast enough to lower our autobids down to $.05 - sounds like the $.05 grandfathered rate may not last very long though. Once the grandfathered bids go away, we will be spending much less with Overture than we ever have before as so many keywords are not cost effective for our business given the conversion rate compared to our cost of goods & fixed expenses.
I'm very interested in talking to any online retailers who have made a transition from 100% online marketing to more substantial offline marketing/PR. Very open on sharing experiences - we've made plenty of mistakes having been in business online for 7 years :)
Please sticky mail me. Also interested in experienced referenced SEOs (please stickymail me with details) who might be able to help me more effectively spend the $ that I was spending with Overture.
The fact is for the great majority there is really almost no change.
It is only designed to double ( or quintriple in the case of 1c, 2c bids) the cost of the low cost uncompetitive bids.
In 90% of our bids we have NO competition or at the most one other as we are highly niched They are cheap just because of that - a referral isnt worth that much.
This WILL lead to the Overture database being less specific and more general - niche targeted listings will reduce and the value to partners and the partner's users will reduce in that area. Though im sure the main reason is to up the gross revenue they can offer to partners. The percentage may be the same but the gross will increase, putting them in a position to compete with Google Adwords in competitive pitching to portals.
The policy was great, covered everything, paid out promptly, customers loved us.
But, we were getting claims for things like dinner plates for £2, and by the time you added up the cost of the claims processors time, my time as the agent, the bank charges for the cheque to be sent, the postage, a £2 claim was actually costing £20 to process.
Because of the claims history, the premiums invariably went up to pay for this and customers were very unhappy, so voted with their feet and went to some newbie insurance company who had a policy that woule enable claims to be paid out without the excess.
Eventually though people run out of insurance companies to go to, so now they have a policy excess, which is effectively the cost of the claim being borne by the client (or in the case of insurance, a claim for less than X being made at all).
PBM is still in it's infancy, early adopters have been dining out on very low cost per acquisition, maybe it's time for everyone to look at their own prices and see if there isn't some margin that can be thrown in to make receiving 1500 visitors a day viable.
So, after receiving last evening's email notification, I believe we'll say "Goodbye" to the Big O; and place our online ad budget with AdWords and a second tier PPC (or two).
The only tear I may shed will be for the loss of "penny clicks" for some of our niche areas - where they did quite well because of a lack of competition. But, now I am told the cost will go up 500% on March 29th.
I don't think so.
You can change titles, descriptions, and URLs and still keep grandfathered bids between $0.05 and $0.09.
As I am new to OV, can someone post if bids less than a nickel were raised to $0.05?
That only applies to grandfathered ads placed before March 2001 at one to four cents.
There was an added paragraph that covered those advertisers only.
"Historically grandfathered 1 cent to 4 cent listings will be moved to the new grandfathered minimum bid of 5 cents effective March 29, 2003."
i need to persuade some people here to let me tinker with ad-words.
i am glad i got about 100 new words added this week 80 or so at 5cents each.
i never got an email stating the cost would go up. my account manager never mentioned it and has avoided communication for the last 3 days. i am supposedly a "diamond" level advertiser too.
Where else can you reach the same size audience, with such a low initial buy, and the ability to track return?
I've been trying to buy some banners for one of the companies I work for the last week. It is such a painful enterprise - I get no response from half the inquiries I make, and the other half pounce like here comes the biggest sucker in the world.
I sure wish I could make a banner placement via self-service across a quality network of sites with good placement, low initial deposit, and reasonable CPM's.
Senior Vice President, Marketing
<edit>TOS - we don't quote entire Email here </edit>
[edited by: Mike_Mackin at 11:32 pm (utc) on Feb. 7, 2003]