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With the bid up to .05 the cost would soar to $1,000 per month and we'd be in the hole for $600 of that.
I remember when they were hungry - but now that's been replaced with greed.
For us GoTo is gone...
Of course market perfection is only achieved when the market has perfect knowledge. And, in my opinion, these low entry costs are what have driven so many people to use Overture and learn it.
When it first happened, I yawned, but this change actually affected quite a few of our clients and made it a little more difficult to sell PPC advertising to clients.
On the positive side, for those of us in the SEO business, this make the free rankings all that more attractive. And let's face it, free rankings are a lot harder to figure out how to get than OT is.
Low entry costs is also what could kill it. Too many people without sound business plans (or sense) run up the bids, then give up and drop off.
OV will only remain usefull for us as long as non-intuitive search terms are not intuited by the masses :-) More and more users is bound to mean smarter and smarter development of search term lists though, so the clock is ticking.
To each his own. OV's revenue comes from advertisers, not people just looking for exposure.
I see this as just a further evidence of the increasing polarity between "selling" sites and "info" sites all over the web (you can see this in Google too with Adwords and froogle) and the diff marketing strategies you need for both. And thats probably a GOOD trend...
Allthough I do understand your point of view, running a free website, I must say that just a few year ago "finansial stupidity" was dominating the Internet - including the search engines. To me, greed is a much better focus than stupidity if we want companies - like the search engines - to keep investing in the future of the Internet.
I don't understand how people can still get shocked by the fact that "the free ride is over". Business is business :)
1) For terms with just a couple of bids, if I'm paying $.10 for the number 1 and my competitor is paying $.01 for number 2, I'm at a huge disadvantage.
2) It seems clear to me that there are a very small number of outlets for premium ppc listings. In order to expand, the ppc engines will have to go after lower value outlets (such as content ads). These outlets will need a lower cpc in order not to eat their own lunch, so they have to raise the minimum cpc of the premium distribution.
My question is this: if I edit a site which has gone up from 1 cent to 5 cents, does it instantly go up to 10 cents as that is the new minumum bid now?
That's the way I interpret the changes, but I just want to make sure. 10 cents is unaffordable for me.
1 penny bids are all from sites that have been around for at least 2 years. The fact that they are still using OV suggests they are not "crappy" or "fly-by-night" enough to still be operative after that time.
1 penny bids are also used by info or non-commercial sites as when they were this low, it was a cost effective means of getting exposure. However eposure and brand recognition was the only criterion, - there is little or no return on direct revenue per click for example.
However as i said above, this seems a valid move from OV. Their model never did provide a long term susbtsantive model for branding, they are sticking to the knitting - a way for advertisers to sell direct on the Web. That does not mean however that 1c bidders had fly by night sites. They may just as well have been very smart - like i expect our ad buyers to be - best value for the best targeted exposure.
Being able to afford higher advertising costs does not necessarilly mean your site is not crappy or fly by night. Sometimes the reverse is true. The statement is far to generalised to be useful, at least for me, though is some cases, there is truth in it.
In the early stages of any business, advertising is a high proportion of expenses. The highest proportions of advertising budgets are almost always approved before the product or service has been able to prove itself, as the new product/service needs exposure and publicity and has no existing customers who are re-ordering. It is no guarantee that the product or service is good, just that you have a big advertising budget.
1Lit: "My question is this: if I edit a site which has gone up from 1 cent to 5 cents, does it instantly go up to 10 cents as that is the new minumum bid now?"
All bids are going up to 10 cents. Actually all have already gone up to 10 cents, log in and see your new prices. You do not have edit the listing for the price change, it is across the board and has already happened.