Bid no longer = position for Content Match!

[eschulma]

Overture is "testing" a new algorithm that changes the standard rule of your bid controlling your position in Content Match. According to them, testing on some traffic could go on for several months, and there is no way to opt out.

I am terrified that they are going to a similar algorithm to Google's, where bid position = bid price x clickthrough rate. This would effectively drive out targeted advertising for popular keywords. Does anyone have any information on this?

[KeywordMonkey]

I doubt they are going to just copy Google's CTR-based approach to ranking because:

1. patent / legal implications

2. it would look like where Google leads Overture (and so Yahoo) follow; after all Overture (as GoTo) launched PPC in the US, not Google. Very bad for shareholders to see.

3. it would annoy advertisers who prefer Overture's approach over Googles (including some big brand owners / advertising agenceis)

What you have seen only applies to Content Match - so I'd speculate they are working to improve how they serve contextual ads.

Speculation on what they are doing...

The advertiser bidding for position 1 on keyword X will currently appear as the top contextual result - pure bid for position.

However if the content of the page is compared to all of the keywords in the accounts of all the advertisers identified as possibly relevant to the page, an algorithm might suggest that one of the advertisers with a lower bid is actually a more relevant contextual result.

And a more relevant result for the visitor = higher chance of a relevant click for the advertiser.

[eschulma]

Thank you -- that makes a lot of sense. I was somewhat concerned because my understanding is that Google bought its way out of the PPC patent issue prior to the IPO, which would at least leave the possibility that Overture could follow them as well.

The next question is how would one know that one advertiser is more relevant for a particular keyword phrase than another, unless by looking at something like clickthrough rate? It may come to the same thing in the end. But maybe they could determine multiple possible keyword phrases and see who is advertising on both...anyway I'll look up the Quigo reference you mentioned. Thanks again!

[KeywordMonkey]

Overture and Quigo Team up for Contextual Ads (http://www.marketingvox.com/archives/2003/08/13/overture_and_quigo_team_up_for_contextual_ads/)

[AussieWebmaster]

I actually was told about this for the first time at SES and then got more details from a senior rep today.

Apparently the use of CTR as a factor is being tested on their Run of Network content partners... this is the area where they have excess inventory at diverse places like CNN etc. and the dynamic stories that are constantly being updated.

[eschulma]

The particular place we are running isn't with dynamic pages. I was calling Overture 10 times a day about this for a while. Fortunately it has settled down, in that we are at least in the top 5 for the relevant terms on the pages I care about. I actually clicked on my own ads to get them to move up after raising the bid didn't work. Sad but true. (And for what it's worth, the clicking worked.)

I can confirm that bidding to position 1 does not guarantee position 1. I am doing that, and am consistently at number 2 or 3 -- which is at least bearable.

It is fairly amazing they would try such a major change without adequate notice.