Insider Bidding? Competing with the House for Search Ads
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Written By Reprise Media | April 27, 2006 | Share This
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If you’re a search engine that offers services other than search (there’s Yahoo Shopping, Google Base, and MSN Money, to name just three) where do you go to advertise? How do you launch new features or content? Sure, print, TV and radio are all effective media, but we’re talking online services. It only makes sense that the engines would advertise on…the engines, just like any other online retailer, service provider or content publisher. Where else would they as effectively reach their existing customer base?
Of course, the fact that engines are both buying and selling the advertising makes it difficult to discern whether lines are being crossed. MSN bidding for keywords on Google is one thing; MSN bidding for keywords on MSN is something altogether different. Even if they’re participating in the same auctions we are, the engines control the rules and have a better understanding of the game. At companies as huge as the Big 3, we’re not sure the left hand knows what the right hand is doing all the time, but they do have access to information the rest of us don’t, which could potentially lead to abuse, even ‘insider bidding.’
Time after time, we have come across several of the big engines competing with our clients for keywords on their own internal programs. For instance, search for “MP3 Player” at search.msn.com and the number three ad is for tech.MSN.com. On Google, a search for the ultra-generic word “Finance” returns Google’s new Finance service in the top AdWords slot. In fact, the only major engine we’ve seen that doesn’t seem to be buying within their own system is Yahoo!, who place a red Y! in the middle of their results on searches for in-house services like “comparison shopping” or “fantasy sports.”
Unlike TV or print outlets, who use “remnant” space for their house ads, the engines are going head-to-head with us in their own marketplace and bidding their own ads to top positions - affecting our placement, our ‘Quality Score’ and indeed, the very price we pay… And to whom are we paying this price? Our fellow advertiser? We’re not saying the engines should be disallowed from advertising in the search market place. But this is one of those grey areas in our industry that will most likely attract closer scrutiny in the near future.
Senior Media Manager Nancy Adzentoivich and Account Director Ruth Nightengale, both of Reprise Media, contributed to this article.
Topics: Advertising: Online, Featured Item |
It may also have to do with tricky accounting. They can write off the cost of the spot. Just a guess.
The only way there is a “real cost” is if they lose an advertiser. Their gains however will be real; in higher bids by competitors, and increased sales of their products. This is not necessarily bad, but should be disclosed to advertisers.