Are Google Biting The Hand Which Feeds Them?

Are Google Biting The Hand Which Feeds Them?

With the recent changed in the way in which Google is working their Adwords services are they in danger of biting off the hand which feeds them so well?

We have all seen on the TV, read online and in our newspapers that year after year Google announce massive profits and ever increasing market share both through increased growth of their own services and by purchasing existing web business such as YouTube.

It is also well known that almost all the revenue in which Google gets is from paid advertisements in their search; this is known as Google Adwords. For those of you which are not familiar with that term go to Google and perform a search for a word or sentence of your choosing; you will get up a number of results, the ones in the middle are there because the websites are considered to be important and so are ranked well and the listings on the right of the screen are there because the owners of that advertisement have paid to be there.

This system has worked well for years and is the perfect model for Google because as their user base has increased so have the amount of people who are clicking on the advertisements on their results page; this increase in traffic has led to organizations being able to justify spending more money online as they are seeing often ROI’s way in excess of any other industry. Lets face it there is nothing more targeted in the world than internet based advertising. Say you want to promote a new product you can spend millions advertising it on television, millions on radio, newspaper and bill boards and yes while millions and millions of people will see the advertisement for your latest product it’s a fair guess to say that a vast majority of them – up to 99% in some cases will have no desire at all to purchase that product; that’s if they even see the advertisement at all. Its well documented that the days of the 3 channel television are over, these days when watching commercial television users will often turned over for five minutes to see what else is on than they will sit down and watch the ads which ironically are funding the programs which they wish to see – what television does to stop this and indeed what the future for television in the future is a topic to be discussed elsewhere. Radio advertising has its own problems too, its much much harder to get a message over to a user when they cannot see what you are talking about, also segregation of the market by using radio is very very difficult – with television if you want to advertise a car related product you advertise it on a car related program; but how do you advertise the same product efficiently on the radio? What shows do car users listen to? See the problem…

With all these problems internet advertising seemed like the perfect solution for organizations. They can target their advertisements to specific searches so you are advertising a brand new mp3 player whereas with TV, Radio and Billboards you would have to put the advert out there and hope that you get the right people with Google advertising you are able to set it so that you advertisement only appears for people who are actually interested in your product. You could choose keywords such as ‘mp3 player’ ‘ipod’ ‘ipod alternative’ this will mean that when and only when a user types these words into their search query your advertisement will appear – it’s the definition of targeted advertising. To make matters even better for the advertiser you ad will not cost you a penny until your advert is clicked upon so you are only paying for people who come to see exactly what you are trying to sell.

This method of working was the norm for many years and both Google and their millions of shareholders from all over the world benefits from this arrangement, and hopefully so did the advertisers. However in the last couple of years it has been suggested that Google are getting too big for their own boots, they have the advertisers over a barrel and both Google and the advertisers know this.

What many people have not noticed over the last 12 months is the cost of advertising in Google is going up and up. The story began a couple of years back when Google suggested that they were fed up of their advertising spots being taken up by Affiliate Marketers (people promoting products or services on the behalf of another organisation usually in exchange for a payment upon the customer completing an action such as signing up for a free trial, buying something or submitting their email address) to try and get around this Google introduced a system in which there was a limit on the number of times one site could advertise in the results. This means that when a user types a word into the search and the 8 paid advertisements are listed each website could only have one advertisement and so in theory it would open up the number of items being promoted to the user.

This worked in the short term in that the 100s of people promoting each item could no longer set up an advert each and rule all the advertising, but after a while many affiliate marketers realized that whilst the results could only display the website address of a website once the actual location a user clicks on could be somewhere else. With this in mind many affiliate marketers would rush out and purchase a cheap 50pence .info domain name for the program they wished to promote and when it came to the making of the advertisement they would put the real site they were advertising in the destination url and the cheap domain they had just got into the display url. The solution there was 100s of people still promoting the same products as before but instead there were 100s of different domains being listed in the Google search results for that product.
So once again Google’s attempts to stop affiliate marketers had proved less than successful. True it did kill off some of the individuals who didn’t realize that you could use tow different domain names. So once again Google needed another solution and out came the Quality Score.

The quality score Google claim is a way in which the item you are advertising is compared with the page you are promoting. The greater the link between the item the higher the quality score and the cheaper you advertisement would be. For example, lets say you make an advert in Google advertising a new brand of MP3 player but the page when the user clicks is say for a chair – this clearly is not related to what you are promoting and when the advert is reviewed what happens is that your quality score will drop and the cost per click on that advertisement will go through the roof. On the other hand if you placed an advertisement for a nice blue chair and when the user clicked on the advertisement they are take to a page advertising a nice blue chair then you are considered to have a good quality score and therefore your advertising costs are lowered as Google considers your advertisement to be more relevant to the requirements of persons looking for that item.

This system sounds fine and does indeed work well, the problem is of late that many people who have been running ads for 6 months plus advertising the exact product which their advertisement is saying they are selling are finding that without reason all their ads are going off line. When they find out several days later – you find out by luck, Google won’t tell you- that the reason their advertisements have been dropped is that they are no longer paying enough to be listed in the results. How can this be, a week before they were paying the same price and at the top of the paid results, but all of a sudden they are gone? The answer is in the Quality Score. For some reasons (al they will never tell you why) Google have decided that the advertisement which is advertising exactly what you are saying you are advertising and has been running for months is no longer as relevant as before and so they have lowered your Quality Score. The only way to get the advertisement back online is to pay the new prices. The amount which the prices go up varies but I have from my seo experience seen adverts which have been running for months at $0.15 a click al of a sudden be asking for $1 plus a click! With this massive rise in operating costs many marketers, be it affiliate or proper companies are finding out that they can no longer continue to advertise at a profit and as a result are having to pull out of Google. More often than not there is someone else to take their place in the ads so Google do not lose out but one day these new people may run out and Google will be left asking itself what happened to its revenue. They are in danger of exploiting their market domination too much.

For further proof that Google are beginning to squeeze the advertisers too much I speak form personal experience. When setting up an advertising campaign for a client in the adult business 99% of the keyword in which he wanted to marketing had 0, zero, advertisements. We then went out to choose keyword related exactly to his page (we know they were related because Google’s own Adwords keyword tool told us so) and used them. Seeing as we are the only person advertising for that keyword we decided that we may as well pay the exact minimum per click which Google allows 1pence. Just as if there is lots of people advertising you have to pay more to get in the results, if there is no one advertising then you must be able to pay the minimum? These advertisements ran fine for a week then all of a sudden the number of clicks we were getting on the campaign had dropped to zero. Upon checking with Adwords we discovered that all the adverts has been disabled as our minimum bid was now deemed too low.

Even though we used the exact keywords Google itself told use were related to our site they had now decided that our Quality Score was down to OK and Poor in places. This in turn meant that we now had to pay a minimum of 10p-15p a click. Whilst this doesn’t sound much it’s a 100%-1500% increase in the advertising costs! We emailed Google several times on this matter and never heard back.

Seeing as they advertise that the min to bid for a word is just 1p and that their own keyword tool told us the words are related to our site, other than to increase their own profit margins what other reasons are they making us pay 1500% the min allowed bid to advertise?

As I said before Google know that they can always get away with it because for everyone who has had enough and goes to spend their advertising dollar elsewhere someone will take his place but if they push things too far then they are in danger of scaring away the exact people who have paid for them to be where they are now. True Google does have a big market share but if they can get everyone using their service in just a few years then so can a rival. In some countries Google are finding that their market share, whilst still being the highest by far, is on the decline as Yahoo, MSN have increased their service offerings and now ASK with its new branding and massive advertising budget have re entered the market. Google will of course not go bankrupt and shut down tomorrow but at the same time they must not become so arrogant that they think they control the market.

I am very interested in hearing peoples opinions on this matter and would like to start a healthy decision on it, please go to carlgale.com/are-google-biting-the-hand-which-feeds-them/ and leave your view

Get My Name Down Article Site: http://getmynamedown.com

Carl Gale is a Hampshire seo consultant with 5 years experience in SEO, Web Marketing and Pay Per Click advertising. As well as working as a freelance marketing consultant he regularly writes a number of articles both on article sites and his own person site. For more information on SEO please visit his personal site carlgale.com and jion in the discussion
 

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