Brands getting short end of stick with Google search

by Dan Leahul, Brand Republic 12-Feb-09, 11:50

LONDON - Brands are paying Google more for less according to research that claims Google's pay-per-click costs have risen as click-through rates have decreased.

The research was conducted by the Institute of Practitioners in Advertising.

When Google changed its keyword policy last May, which now allows companies to bid against one-another's brand names, pay-per-click increased nearly one-third (31.6%) while average click-through-rates decreased from 28.9% to 20.9%, the research claims.

Rob Taylor, search director with BLM Quantum, said: "Certainly it comes as no surprise that there has been an increase in cost-per-click on brand terms since Google relaxed their trademark policy in May.

"Just that this can be stated with empirical confidence is a really important step for the search marketing industry as a whole.

"The fact that such a large number of agencies elected to be involved in the study shows that there is a real movement towards maturity and responsibility, and an attempt to readdress the balance of information back towards the favour of the advertisers.

"I look forward to seeing how this develops."

The IPA data was submitted by 17 agencies and provided the average monthly cost-per-click prices and click-through rates of up to 88 brands from April 2007 to December 2008.

Comments

Simon K - 12/02/2009

Higher demand + reduced supply = higher prices shocker

NiCk - 12/02/2009

So the markets changed in nearly 2 years? I agree 'Simon K'... Shocker lol.

Dan Williamson - 12/02/2009

I don't think anyone's going to be surprised by this trend. Prices are only going to increase as more SMEs get on board. Our value as SEO / PPC specialists is to create even more targeted campaigns and reduce any wastage of these \(still) hugely accountable ads.

IanC - 13/02/2009

If Google doesn't offer good value then don't advertise on it, or sort your SEO out and optimise your offline integration to drive cheaper brand search traffic. However saying all that they do have a monopolistic position in the UK, so it does deserve a bit of monitoring...