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Monday, September 20, 2004

Eh-Per-Click

Overture is finally opening a separate office in Canada, along with Brazil, China, Hong Kong, and Taiwan. (We presume this means Yahoo! will now renew its sometimes-wavering commitment to the Toronto presence.)

But as ever, the devil will be in the details. It will be interesting to see whether advertisers will continue to need separate accounts if they wish to run international campaigns. With Google AdWords, country settings (and for the bold, regional targeting) are consolidated in a single account.

The exact ad distribution pattern of, say, a Canadian Overture campaign will be interesting to see, as well. Many Canadian users who search on Yahoo would actually be using Yahoo.com, not Yahoo.ca. Presumably Overture plans to use an IP-targeting technology similar to the stuff Google uses?

Although there aren't many advertisers who would limit their campaigns to Canada, there are certainly enough to bother with. One we worked with -- a Botox-related treatment that you can currently hear on Toronto radio spots -- wanted to know how they could show up in those "Yahoo sponsored listings," but only in Canada. We couldn't do it for them because turning Overture on meant turning it on for all of North America, a cost increase of 10X at least. So having the ability to deploy Overture campaigns for Canada only -- and even for specific metro areas in future -- is a welcome development that will attract plenty of new advertisers to the fray.

Until Canadian Tire opens up stores south of the border, for example, they'd probably find it annoying to run an Overture campaign. The same goes for Tim Horton's (who should, I still maintain, absolutely OWN the PPC listings for donut, bagel, and, well, "Tim Horton"), the Rotman School of Business, Sheila Copps, The Loose Moose, and various other usual suspects. With the hockey lockout leaving local execs with more spare time, there's no longer any excuse. It's time to get off the collective national duff and get onto understanding how to target those search listings.

When it comes to easy targeting by country and region, Google's already there, of course. This was amply demonstrated in a slide shown by Google's Wendy Muller at SES Toronto last May -- with a sample regional-targeting "ad radius" that stretched around the 416 and 905 area codes.

It'll be interesting to see average costs per click for local businesses -- especially the lucrative ones like plastic surgery, fine furniture, donuts, business degrees, election-buying, nightclub-hopping, and so on -- creep up as the most entrepreneurial advertisers realize they can target highly captive audiences, paying only when the viewers live nearby and are actively searching for their products. Although some realize this today, it's still pretty wide open. In a normal market that "got it," advertisers in any given city would think nothing of throwing a buck or two per click at such a micro-targeted customer. But they still don't get it, by and large, so there are plenty of bargains to be had.

Thus endeth today's seminar on "trends in local search." And I didn't even once use the example "pizza place in Palo Alto."

The "what to do with local offices" type of problem used to beset LookSmart, which had some local offices (and "local submit" options) that seemingly languished when it came to giving any kind of compelling service to local advertisers. Many just dealt with US-based LookSmart.

There's enough money in the game that the two major PPC players can afford to plunge into new markets with both feet. With search advertising now representing 40% of online advertising spending, it's time to go big (and go abroad), or go home. Wherever "home" is.

Posted by Andrew Goodman




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