PPC Strategy

Prior to launching a PPC campaign think about what your end goal is and how much of your marketing budget you are willing to spend on it. PPC advertising can be complicated and risky if you “throw it at the wall and see if it sticks “. 

PPC bidding strategies to consider:

  • Have a budget allocation strategy
  • Geo-Target campaigns to potential customer locations
  • Day-Parting in order to target your niche market
  • Careful keywords matching (most important)
  • Quality score + Click Through Rate

Google AdWords Advantages
Google AdWords has by far the widest coverage of any of the PPC providers, allowing advertisers to reach a wide market using just one system. This coverage also makes it the most suitable for specialised businesses, who would not receive much search traffic from the smaller providers. The minimum cost per click for a keyword can be a little as 10 Cents, which can make AdWords suitable for editorial or low order value websites, where the 25 Cnets minimum cost per click required by the other providers might not be cost-effective.

Google Adwords Weakpoints
Google AdWords has now become so popular in some market sectors so that bidding is very competitive, meaning in some cases better value can be found elsewhere. The system provided by Google is very sophisticated – for example, ranking position can be determined by the bid price and the clickthrough rate of the advert – so that the service can be difficult for beginners to understand initially.

eBay big in China

eBay today announced that it purchased the remaining two-thirds of EachNet, a major Chinese online consumer auction place, for $150 million in cash.eBay first purchased one-third of EachNet in March 2002 for $30 million. Based on the transaction value and total company valuation, EachNet, which was valued at $90 million in March 2002, is now valued at $225 million, growing two and a half times in a one-year period.

Applied Semantics – a deal to hurt Yahoo!

Google has acquired Applied Semantics, a company that provides domain name, contextual advertising and enterprise search solutions. Whereas terms of the deal were not disclosed I would expect the price to be north of $100 Million, as the acquisition gives Google new traffic for its paid listings, new strengths in the contextual advertising space, which Google entered into last month, and also potentially hurts major Google-competitor Overture.

Applied Semantics is one of Overture’s top ten partners, generating traffic for Overture’s paid listings through its DomainPark program. It seems unlikely that Google will allow Overture’s paid listings to remain part of the DomainPark program in the long-term. That would deny Overture traffic while simultaneously giving Google new exposure.

In addition, the purchase gives Google a presence in Southern California, where it hopes to recruit new engineering staff. Overture is already based in the area, and its Pasadena headquarters is only 30 miles from Santa Monica-based Applied Semantics. The close proximity means that if Google and Overture are both after a particular engineering candidate in Southern California, accepting a Google offer will no longer require relocation to Northern California.

When this article was originally written, Overture had not yet responded to questions about the impact the acquisition may have on the company or whether it had been considering a purchase of Applied Semantics itself. Since then, Overture has said that Applied Semantics is no longer one of its top ten affiliates nor that it expected the sale to have a “material impact on revenue.” The company also did not see Google opening an office in Southern California as hurting its recruiting efforts. A follow-up SearchDay story provides more detail from Overture’s perspective.

As for Google, it had no comment about the potential impacts of the purchase on Overture, not even to say if this was a consideration in the purchase. Instead, Google played up the “fit” between itself and Applied Semantics, in terms of technology, ad programs, corporate culture and even a personal connection. Google cofounder Sergey Brin has long been friends with Applied Semantics cofounder Gil Elbaz, Google pointed out.

Domains Make Money For Applied Semantics

Interestingly, both Google and Applied Semantics had similar beginnings, as search engines with funky names launched in the late 1990s. However, they soon headed down different paths. Google focused on web-wide search and developed into today’s incredibly popular service. In contrast, Oingo (as Applied Semantics was formerly known — it changed names in 2001), remained a relatively-unknown showcase site to demonstrate the company’s categorization technology to would-be enterprise search customers.

Today, Applied Semantics still provides enterprise search products. But the company also found a new and apparently profitable service of applying its content-classification and taxonomy technologies to domain names. Throughout 2000 and 2001, Applied Semantics signed agreements with various domain registrars to help those companies suggest good domain name alternatives to customers when top choices were already registered.

Domains also provide revenue to Applied Semantics in another way. The company uses its technology to help web sites with good domain names but no real content of their own. Through the DomainPark program, paid listings from Overture (and perhaps other providers) are shaped into directory-like categories. This gives the web sites in the program revenue-generating content, money that Applied Semantics shares in.

Couldn’t buy the Monster …

Hours after Monster.com parent TMP Worldwide declined to up its bid for recruitment Web site HotJobs.com, Yahoo finalized its agreement to buy the job board for approximately $436 million.

Yahoo will pay $10.50 per share in cash and stock to acquire HotJobs.com. The acquisition will make Yahoo the second-largest presence in the online recruiting sector, Yahoo Chief Executive Officer Terry Semel said in a prepared statement–behind spurned suitor Monster.com. Yahoo said it will focus on serving Fortune 1000 companies and other large employers.

The transaction is expected to close in the first quarter of 2002.

HotJobs.com terminated its merger agreement with TMP early Thursday and paid TMP a $15 million termination fee and $2 million in expense reimbursement, HotJobs.com CEO Dimitri Boylan said in a statement.

HotJobs.com shares dropped slightly in trading Thursday on the Nasdaq exchange, dipping 2.72 percent to $10.38. Shares of Yahoo climbed 1.94 percent to $17.85, also on the Nasdaq exchange.

Microsoft gets on the map

To make way on its .NET mapping technologies Microsoft announced it would buy mapping services provider Vicinity Corporation. The transaction is valued at $96 million dollars and provides a premium to Vicinity stockholders who’ll take home $3.33 for each of their $2.24 shares.

Vicinity, founded in 1995, has 117 employees in Sunnyvale, California, and Lebanon, New Hampshire. Microsoft expects to hire many of the Vicinity employees, but admits some overlapping positions will cause layoffs. MapBlast! will be phased out in favor of Microsoft’s MSN MapPoint mapping website. Vicinity executive Teri Dahlbeck explained in a CNET article that the offerings are complementary: Vicinity offers tools for data analysis and marketing use that MapPoint lacks. Microsoft’s forthcoming customer relationship management solution, MSCRM, expected later this year, may one day draw upon Vicinity technology.