SEARCH ENGINE NEWS

The latest pay per click developments

Paid results have finally become "Sponsored Links"

Pay per click has become the search portals' hope for survival, which is fine with us. The search engine companies need an income, like most of us.

There has been one major problem, though. Many search sites has tried to hide (or at least "underexposure") the fact that paid search results in fact are pay per click text ads, and not search results striving to present you the most relevant Wen pages at the top of the result list. The paid results have instance been given non-informative labels like "featured listings" or "products and services."

However, they are clearly ads, even if they are relevant to the search query. Regular search engine results are generated on relatively objective criteria. Pay per click search results are based on the auction principle. The one that pays the most gets to the top. That is not necessarily the best or most relevant site.

According to a survey made by Consumer WebWatch, only 39 percent of Internet users have heard of paid placement and only 43 percent of those who use search engines. This means that most searchers cannot see the difference between paid ads and regular search results.

Consumer activists have been turning up the heat, making unmarked text ads a PR liability. The consumer advocacy group Commercial Alert made a complaint to the US Federal Trade Commission last year.

As a result of this the Federal Trade Commission has now sent a letter to the relevant American search engines, asking for "clearer disclosure of the use of paid inclusion, including more conspicuous descriptions of paid inclusion itself."

It is working. Sites like Lycos and Yahoo had already changed their description of paid results to "Sponsored search listings" or something similar. Now AltaVista and Ask Jeeves have followed suit.

However, one large group of search sites remain: the metasearch engines. At some of these search sites, more than 50 percent of search results are paid for. It remains to be seen if Consumer Web Watch or the Federal Trade Commission will follow up on that, though.

Read the Pandia article "The US Federal Trade Commission criticize search engines for unmarked text ads" for more (http://www.pandia.com/sw-2002/23-ftc.html).

Ask Jeeves dumps Overture in favor of Google

Google is probably the most popular search engine in the world. However, it is also trying to become the most important pay per click text ad deliverer on the market, a market that was previously totally dominated by Overture in North American and Overture and Espotting in Europe.

Overture is no regular search engine portal anymore, and does not compete with its portal customers. Would it be possible for Google to deliver pay per click ads to a search engine competitor?

Yes, Google can. On the 18th of July the search engine company Ask Jeeves announced that it has selected Google's pay per click AdWords program for use on Ask Jeeves and Teoma search sites.

Under the agreement, Ask Jeeves and Google will share the more than US$100 million in estimated revenue to be generated from Google's advertisers on Ask Jeeves' search sites over three years.

In addition, the agreement will also enable Ask Jeeves to sell the Google Adwords sponsored links program along with Ask Jeeves' Teoma search technology and other services.

"The deal with Google also improves our returns substantially," says Skip Battle, chief executive officer of Ask Jeeves. "We expect our revenue from paid listings on Ask Jeeves and Teoma.com to more than double from Q3 [the third quarter] to Q4 and beyond as a result of this agreement."

This is a tough blow for Overture, but even European Espotting is nervous.

In a comment an Espotting spokesman says that "The deal clearly illustrates the vast differences in both the nature and the competitive landscape of the US and European search markets.

"They are very different markets and just because a deal is struck in the US that does not guarantee that it will transfer across the Atlantic. Ask Jeeves UK have already publicly stated that the deal does not affect on their relationships in the UK."

This may be so, but success breeds success, at least for a while.

The first Google text ad will appear on Ask Jeeves in September.

Overture introduces auto bidding

Overture is now following Google and the European pay per click search engine Espotting in introducing an automatic bidding system.

With this new feature advertisers will always get the highest position for their bid without paying more than 1 cent above the bid of the next highest competitor. Auto bidding allows you to set the maximum you're willing to pay for each click.

A tutorial can be found at the Overture site (http://www.overture.com/d/USm/adcenter/index.jhtml)

The new system has been received with mixed feelings in the search engine optimization community.

One major problem is that Overture has stopped presenting the actual pay per click prize for each listing, the way they used to. Instead they inform you of your competitor's maximum bid limit. This may lead to higher costs for all advertisers.

Search Engine Conferences

The best way of learning more about pay per click and other search engine marketing issues is by talking to SEO experts.

Brett Tabke of Webmaster World has announced Pub Conference 2, a Web marketing and promotion event to be held in London on October 12 2002.

Go to http://www.pandia.com/sw-2002/25-conferences.html for more information on this and other search engine conferences.

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