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Google beware - Some e-tailers warn the backlash is spreading

(Posted by Guest Blogger, Ian Turvill.)

It appears that my immediately prior posting on the blog today was particularly timely, given an article just published on  Entitled "Google beware: Some e-tailers warn the backlash is spreading", it describes how "e-tailers who've found that their business through Google isn't as profitable as it once was are now rushing to park their ad money elsewhere."

And what is the problem?  Well, just as I described below:

"Part of the issue is the evolving dynamics of the e-commerce marketplace.  As e-commerce sales continue to grow at an explosive pace, many more brick-and-mortar retailers (who may or may not sell their products online) are rushing to advertise their brands online.  Because these bigger players have deeper pockets, they're able to outbid their smaller, online competitors and get better ad placement."

Now I have to admit that I was a little reticent at first to connect to Jeff Zabin's recounting of the work the team did to optimize their bidding on keywords.  After all, it might tip our hand to competitors, and it might also alert to what could be done by a savvy bidder.

But, in the first regard, I'm quite confident that our competitors particularly in the credit scoring realm would find it hard to apply the same set of technologies and mathematical techniques that generated such a great ROI.

And in the second instance, I think Google might actually be pleased to see this kind of emerging tool.  After all, if there is sufficient uncertainty in the bidding process that many potential advertisers might stay away from bidding at all, then Google loses out on the competitive pressures that force bid prices up in the first place.  In addition, Fair Isaac has now demonstrated that it can create a higher ROI on keyword bidding through the use of a Strategy Machine.  Assuming that there is an untapped inventory of clickthrough opportunities, then Fair Isaac should allocate MORE money to spending on Google's Adwords.  That seems like a win-win, for Fair Isaac and Google.

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