Google Instant Driving Up Online Ad Prices

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Google unveiled Google Instant today and it has the community of Web professionals (particularly those involved in online advertising via Adwords) quite concerned. No doubt about it, Google Instant is a significant development in the user search experience. What we don’t yet know (at least not fully) is how it will change the online advertising landscape.

Google Instant is really a “search enhancement” which shows users results as they type. While it's a little early to determine the greater impact an instant search experience will have on consumers, we do know a little (or at least can make some assumptions) about what could effectively happen in the future as it relates to Adwords advertisers.

Understanding Google Instant
The most visible feature of Google Instant is the “as you type” dynamic search results. The query prediction and “scroll to search” feature (which essentially just means scrolling through the suggested results) are really more “effects” of the new interface. So, anytime a user does anything (types, clicks, scroll to see results for a predicted/suggested keyword) the entire results page is going to change.

Google on the Instant Offensive
Google has really been in front of the Web community regarding how the search enhancement might impact them directly – primarily as it relates Google Adwords as Instant forces everyone in the online advertising community to entirely rethink the notion of impressions. According to Google, “With Google Instant, an impression is counted if a user takes an action to choose a query (for example, presses the Enter key or clicks the Search button), clicks a link on the results page, or stops typing for three or more seconds. It’s possible that this feature may increase or decrease your overall impression levels.”

The Effect on Adwords Advertisers?
If you’re an Adwords advertiser, expect to hear a lot about how Google Instant might change the game in the coming days and weeks. Since what advertisers are charged is based on Quality Score, and since the primary determinant of Quality Score is CTR (click through rate), it’s not much of a stretch to see how increased ad impressions would equal a lower CTR and ultimately a higher CPC. Right in time for the holidays no less!

Google Instant will become the core search experience on Google.com for Chrome, Firefox, Safari and IE 8. We’ll also be offering Google Instant to our users in France, Germany, Italy, Russia, Spain and the U.K. who are signed in and have Instant-capable browsers. Over the coming weeks and months, we’ll work to roll out Google Instant to all geographies and platforms.

 

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1 comment

BobB 09-14-2010 10:26 PM

I understand about the increased cost from the Quality score and clickthrough relationship but if we havee two word adwords will this also count as an impression  as the first few letters of the first word are typed in by the user? For instance, we have pedal extenders for cars. As soon as someone types "ped" and our link shows, will we be charged an impression? And as they type the next letters "a" and "l" and the results change, will we be charged another impression? If so, this could be a major cost impact.

I wonder if the solution is to make "pedal" a negative keyword and "pedal extenders" the keyword?

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