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"Currently, Overture's average click charge is 40 cents ... and that has grown substantially over the last two years," Meisel said on Wednesday at an Internet advertising conference sponsored by Jupiter Research in New York. "When we look at the return that advertisers are getting, we certainly don't see anything that would get in the way of that moving up towards 50 cents."
Link to full article:
[uk.news.yahoo.com...]
The interesting thing here is the attitude: Advertisers are making money, so our prices must be too low - let's increase them...
In case anyone doubted that there would be further minimum bid increases at Overture - here's the answer, straight from the horses mouth.
It's certainly a "heads-up" - we'll be taking steps to reduce the % of business we get from Overture (and from PPC in general) - since any further price rises would squeeze our profitability almost to nothing.
Overture has already gone from our #1 most profitable activity to #4. Looks like they're planning to drop off the chart altogether.
With a management attitude like this, I don't think it'll be long before they're "yesterday's company" - Yahoo, or no Yahoo.
I think searchers are also getting better at identifying which listings are advertisements, meaning Overture is forced to try to squeeze out more per click.
Also, many large websites are so well established, the need to use PPC is reduced. For example, nearly everyone who uses the type of product we sell knows our company name and how to find us. We are able to keep our prices lower than competitors because we don't use PPC. We do advertise, but snail mail has a much higher ROI for us.
