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Google Reduces Minimum Bid on Some Keywords
By Brian Morrissey
Posted on May 21, 2003
Google has quietly lowered the minimum
price of some keywords in its AdWords program, in a
move it hopes will entice more advertisers to try the
A Google representative confirmed
that the company notified advertisers last week that
the minimum bid price for all keywords 5 cents per click.
While the majority of keywords were already at this
range, others in attractive verticals like travel commanded
a higher minimum.
"It gives more advertisers an
opportunity to get involved in the auction process,"
said the Google representative.
The company did not say how many
keywords or advertisers were affected by the change,
but pointed out that the cost-per-click model made the
majority of keywords well above.
"While [Google's] had a minimum
5-cent bid for many terms, some popular terms have always
been set above this," said Danny Sullivan, editor
of Search Engine Watch, which is owned by the parent
company of this site. "It may very well be that
this has kept some people from wanting to bid on the
terms. It's especially irritating to be told you have
to pay a high minimum bid on a term when no one else
is bidding for it."
The move is against the grain in
the paid search industry, which has seen minimum bids
rising recently. FindWhat announced a month ago that
it would raise its minimum bid price to 5 cents per
click. The company said it took the move to keep pace
with industry trends, as Overture Services upped its
minimum from 5 cents to 10 in February.
Most keywords on Google command far
above the 5 cents minimum, with industry analysts estimating
that AdWords commands near or over the 37 cents that
Overture reported last quarter.
However, Google advertisers have
more opportunities for listings, making lower-priced
keywords potentially more prominent. Unlike Overture,
which typically lists four sponsored links on partner
sites like Yahoo!, AdWords results on Google can return
up to 10 listings. In addition, Google does not rank
its listing purely by bid price, factoring in how many
clicks the listing generates.
"Brands, in particular, are
rewarded in Google's system because searchers are more
likely to click on branded URLs and listings that include
brands," said Kevin Lee, chief executive of search
marketing firm Did-It.com. "The low [cost-per-click]
provides the opportunity for more marketers using brands
to test paid search."
Last week, Google signed a key international
distribution deal for its AdWords program with Ask Jeeves'
United Kingdom operations. The company said its international
AdWords program would not be affected by the change.