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Thursday, September 25, 2003

150,000 Advertisers? You Gotta Be Kidding

Today, Google sent out a press release announcing the official launch of their Spanish advertising office in Madrid, and news that their total number of advertisers globally is 150,000, eclipsing competitor Overture.

But what does this mean in terms of average prices per click and prohibitive bidding wars, issues that matter to most advertisers?

Word on the ground, at least judging by discussions had over lunch at my nngroup seminar on Search Engine Visibility yesterday, is that for competitive terms in industries like financial services and travel, the entrenched advertiser base at Overture has pushed their cost-per-click bids significantly higher than they are on Google AdWords.

There are probably a number of reasons for this. Since Google was a relatively recent (February 2002) entrant into the PPC market, Google's advertisers were the "second wave," which means that they're covering a broader range of industries and keywords (in part due to the fact that Google allowed flexible phrase matching options which Overture only rolled out recently) without pushing bids as high in the core of highly-competitive industries.

In other words, more advertisers does not translate over to higher costs if you are one of the smart ones taking advantage of interesting features of AdWords, including the way it rewards superior relevancy in its formula. But if the trend continues, prices will inevitably go higher as more advertisers join the party.

Google's global strengths also likely translate into a higher total advertiser base. It's easier to go multinational and multilingual with Google.

It's an eye-opening announcement in some ways, since it proves that advertising dollars continue to stampede to online marketing and specifically keyword advertising. But then again, to you, maybe it's not such a big deal.

Let's hope Google has something more interesting to tell us about soon.

Posted by Andrew Goodman




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