Localized Adsense.

More sharp price decreases?

[markus007]

SAN FRANCISCO, California (Reuters) -- Google Inc., the world's No. 1 Web search provider, Thursday it was launching a local advertising service that aims to help companies reach nearby customers.

For example, a florist in Frankfurt could choose to deliver his or her ads only to Web searchers who are located within 20 miles of the flower shop.

Sounds like we are in for another round of price cuts. I just can't see localized terms being very competitive at least for a year or 2.

[viggen]

Isn't it that because of localized ads, that are many more people coming into the system that haven't been there before, or people making additional campaigns for local ads?

just wondering....

cheers
viggen

[markus007]

depends if its tied into the same system and you have to bid above the market rate to be "localized"

[corpuscle]

In my experience with selling ppc traffic (and I believe in most advertisers' experience), the more targetted the keywords, the lower the bids.

From what I can see, many advertisers don't take the time to think about the best phrases to attract customers, and I don't think they ever will.

If a company sells "bright blue widgets", they will probably bid on the terms:

"bright blue widgets",
"blue widgets", and
"widgets".

Similarly, a company selling "dark green widgets" will probably ALSO bid on "widgets". This pushes the "widgets" price up faster than prices for the more specific terms.

I have been in the unusual position of having users looking for "purple widgets in nantucket", and getting offered 20% of what I would have got for someone searching for the far more vague "widgets", despite the vastly improved targetting of the lead. This was so frustrating that I deliberately made it easy for my users to search for generic terms, and harder to search for specific terms - simply because revenue was so dramatically better for the latter case. A crazy situation.

I personally don't look forward to improved targetting of ads. It destroys much of the arbitrage opportunity that exists in the PPC market. It will take a long time to educate advertisers however, so I think publishers are safe for a little while yet...