May 15, 2008 | Thursday

Fears over Google trademark bidding unfounded, say SEMs

Fears that Google’s decision to allow trademark bidding would cost brands millions appear to be fading, according to search specialists.

Almost two weeks after the restrictions were lifted, UK SEMs report that, after an initial spike in costs per click in the first few days, prices have dropped back.

Richard Gregory, COO of Latitude, said, “On 6 May [the day after the restrictions were lifted] the average CPC of brand terms rose 437%, but over the next two days the prices started to settle down quickly thanks to the Google quality score removing less relevant advertisers.

“Thursday [8 May] still saw brand terms 115% more expensive than before the change. If it settles at this level it will have a lesser impact that we initially estimated,” he added.

Jonathan Beeston, client services director at SEM Efficient Frontier, said sites that had initially bid on competitors’ terms were stopping.

“There was definitely a rush, but Google’s quality score calculations kicked in. For example, on Tuesday a lot of ads appeared against some of our retail clients, but the next day this were fewer.”

However, Lastminute.com CEO Ian McCaig told NMA that any CPC increase would harm businesses.

“Whether it’s 5% or 10%, it’s still an increase,” he said.

Will Cooper, NMA, 15th May 2008