Advertisers prepare for battle as Google scraps search rules

by Gareth Jones, Marketing 15-Apr-08, 08:45

LONDON - UK advertisers are rushing to bid for keywords trademarked by rivals to take advantage of the changes to Google's paid-search strategy in the UK.

Energy supplier Npower intends to bid on terms relating to its competitors as part of a strategy to build its brand online; other advertisers, including Diageo, Mercedes-Benz, O2 and Domino's, also plan to review their strategies. 'It's going to be like the Wild West for search advertisers,' said Robin Auld, Domino's director of sales and marketing.

Changes to Google's policy mean that consumers using the search engine to hunt for specific brands will, for the first time, receive sponsored listings for their closest rivals.

The new rules are expected to cause the cost of paid-search advertising to rocket, forcing the UK's biggest online advertisers into conflict.

The changes, which come into effect on 5 May, have been described by the IPA as 'radical' and 'unexpected'. The body's head of digital, Nigel Gwilliam, said: 'This unilateral move by Google shifts the goalposts for all brand owners in the UK.'

The IPA plans to call an emergency meeting with Google to ask it to delay the introduction of the strategy, which it claims will have a massive impact on offline activity as well as paid-search and online advertising.

Advertiser reaction

Npower: 'This provides challenger brands with a whole host of new opportunities.'
Bacardi Global Brands: 'Bidding on rival keywords doesn't feel like an ethical way of promoting brands.'
Domino's: 'I can't imagine that there will be many adver-tisers in the UK that won't want to take part in this.'
O2: 'We are considering how we move forward with our paid-search strategy in light of this decision.'

Comments

Mirek mirpo Polyniak - 15/04/2008

I wonder why the advertisers want to make Google's profits bigger? The general outcome: PPC costs are going to go up, ROI is going to go down. The only beneficiary is going to be Google I'm afraid...

Mark Simpson - 15/04/2008

As UK advertisers rush to bid for keywords trademarked by rivals, they risk far more than they are likely to gain. Purchasing competitor brand names may be a significantly cheaper option than attempting to buy the generic terms and is likely to bring about a significant increase in traffic for relatively little input. However, it has significant risks - most notably alienating future customers and partners - and is likely to have little or no impact at all on conversion and retention rates. In fact, despite the increasing sophistication of search engine optimisation techniques, online marketing has reached a tipping point: brand managers cannot continue to allocate ever increasing budgets to customer acquisition without considering the downstream implications. Why spend another £50,000 on pay per click or affiliate marketing campaigns when the same amount could deliver a 20% to 100% increase in on-site conversion rates? Rather than investing heavily in ensuring that they appear top of the associated sponsored links, organisations should be focusing on the simple methods of improving conversion rates such as content optimisation and behavioural targeting. Indeed, just by continuously comparing conversion rates and making even the most basic content changes, such as changes to button messaging and / or colour, can deliver significant conversion uplift. Addressing the check-out process will typically deliver an improvement well in excess of 30%, and changes to registration processes have delivered over 50% improvement. Having invested heavily in pulling customers online it is criminal to waste the opportunity. Rather than attempting to aggressively buy market share it is time to consider the actual user experience and work effectively to translate the investment in search activity to bottom line conversion. It is time to become far more sophisticated about web content optimisation. Mark Simpson www.maxymiser.com