Google Keyword Bidding Policy changes for UK & Ireland

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Google is changing its policy on bidding for keywords in UK & Ireland from May 5 2008 . The policy is already in effect in US. So international companies who leverage Google for search result sponsorships and have operated in US have already gone through the rigors of the vicious competition that such a policy brings in. Google already has a minimum bidding price policy in place, where you have to pay at least a cent to be in the race.

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So what is Keyword Bidding?

Every time you use Google to search for something, you enter a few words or phrases that you think will bring up the best possible results. When the results show up, you see something called Sponsored Links on the top or on the side. You probably click from the first one to the second & third one. The probability of you hitting the first of the Sponsored Listing in the search results is almost 99% while the probability of you even going on to the 3rd page of your search is as low as 10%. Given that, any website that can show up on the top of the search would benefit from attracting visitors.

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So companies research words and phrases that users are likely to use and based on that pay Google to for those terms to be shown as Sponsored Links in the search results. Google uses an automatic bidding system where people can bid for this.

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So what does the Open Keyword Bidding policy mean?

It simply means that anyone can bid on any term. Ideally you would think that only Best Buy company could bid on terms like Best Buy, Bestbuy etc, so that when anyone types them up, bestbuy.com would have the 1st position in the search results. In the Open Keyword policy, Circuit City or another competitor like Radioshack can bid on the phrase Best Buy! This obviously builds higher prices on commonly known brands, like Coke, Cola, Pepsi, MTV, Sony etc.

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So far, UK & Irish bidders were not allowed to bid on competition. A large demography of advertisers are also prevented on naming their competition in any media advertisements. Not so in the US. While this makes it beneficial for the shopper, it brings on a huge financial responsibility to the large brands. They have to now pay additional money, and compete too with other bidders, to reserve the ability to show up in Google on those key words that probably "should" only show them.

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In many countries advertisers are legally prevented to name competitors in any media campaigns. These rules are specific to demographies and vary from one country to another. The Google’s key word bidding policy change do not alter any nations legal binding on advertisements.

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What does it do to small or mid size organization?

Whether small or mid size companies have the budget to bid against large brands or not, this change in Google’s open keyword bidding policy still gives them a chance to compete if they want to. I cannot imagine why one small garment trader will try to bid for Macy’s terms instead of putting in that money to improve their business logistics.

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What does it do to affiliates?

The affiliate rules that are imposed by individual companies still run as usual. Many of the affiliates sign you up with an agreement that you cannot bid on a set of their key words. For example, as a Microsoft Affiliate, you cannot bid online for key words like Microsoft, Live, Microsoft Access etc. The rules are applicable irrespective of which geography (country) your affiliate teams work in.

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Since a large portion of Google’s traffic comes from UK & the European countries (almost about 33% in UK from a March 2008 report), this could tempt the large organizations to look into other popular search engines. But since this adds a lot of revenue to the Search Companies (like Google) it is likely that the others in the race, Microsoft Live, Yahoo! & Ask, sooner or later will also follow in Google’s footsteps.

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Though these Sponsored Links are expensive and cuts down on your earning per conversion, surveys show that the top three positions of sponsored results for high-traffic keywords are likely to attract enough prospective customers to justify advertising expenses.

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