Search marketers worry about Google and Yahoo

September 8, 2004

As various search engines offer analysis into the ROI and performance of marketers' keyword ad campaigns, some search marketers worry Google and Yahoo can obtain too much sensitive information about advertisers' businesses.

Last month, a customer questionnaire from Yahoo's Overture Services paid search unit ignited concern regarding its suggestion of a subscription program that would give insight into competitors' marketing tactics, including price per click, ad budgets and conversion information.

"We do not currently have any plans to use our conversion data for other purposes," said Gaude Paez, an Overture spokeswoman. "We're not planning on using the conversion data we get from advertisers and putting it into reports."

While many privacy advocates have raised issues related to search engines' access to consumer information, some marketers warn that search engines have access to a vast trove of sensitive business data. The idea of sharing sales information with marketing companies that also serve competitors leaves some marketers uneasy.

"The fact of the matter is Google and Overture already have more information than the average person wants them to have," said Lisa Wehr, president of Suttons Bay, MI, search engine marketing firm Oneupweb, which runs paid listings campaigns on Google and Overture. "I don't think most marketers understand the impact of how they can predict their businesses."

Many sophisticated marketers turn to search marketing firms and third-party tools to manage and measure their keyword campaigns. Google and Overture offer free tools for measuring how paid search ads in their network convert to sales.

These tools, geared to the tens of thousands of small and midsize paid search advertisers, work through the insertion of a tracking pixel on their confirmation page to record when a lead converts. The marketer is provided valuable sales data on its keyword campaign, but the data also go to the search provider.

Neither Overture nor Google would say how many marketers use their conversion tools.

Joshua Stylman, managing partner of New York search marketing firm Reprise Media, said conversion tools are very helpful for small marketers, who too often track their search campaigns only by clicks. However, search engines could easily use sales information to raise prices on high-performing keywords, he warned.

"We're relying essentially on finding inefficiencies in the market and exploiting them," he said. "Once those inefficiencies become visible, they're not as valuable."

Terms and conditions for advertisers posted on Google's and Overture's Web sites give the search providers the right to use advertiser information, including conversion data, on an aggregate basis.

Stylman said the differentiation between individual and aggregate data is not that important. For example, a list of keywords with a high conversion rate but low bid price for the mortgage industry would be just as valuable as those for a particular company.

"We see an inherent conflict in the person that owns the inventory having full visibility into the performance data," he said.

Paez said Overture does not use conversion data in pitching clients through its own sales force or for its keyword suggestion tool. She said Overture uses conversion data to develop new advertising products, such as its new keyword matching options.

A Google spokesman said the company uses aggregated conversion data for "general quality and business-related analyses." Its Smart Pricing effort to normalize pricing on keywords that convert differently adjusts click prices on Google's content listings based on several factors, including how well they convert.

Other search marketers say they do not think the data funneled through Overture and Google are a concern, because any misuse would alienate their advertiser base.

"Ultimately, their open auction model determines their fortunes," said Fredrick Marckini, chief executive of iProspect, a Watertown, MA, search marketing firm.

The need to gauge return on investment for search marketing is likely to grow, according to Jupiter Research. It is also likely to lead to more demand for conversion tools. Jupiter Research expects rising click prices will force more marketers to focus on wringing efficiencies from their search campaigns. A Jupiter Research survey found less than half of marketers use sales data to measure the success of their search campaigns.

"The whole point of increasing your efficiency, as a marketer, is to earn more money and get better margins," said Nate Elliott, a Jupiter Research analyst. "If you let the media sellers know how efficient you are, they can just raise prices on you and take away all the benefits from that work you've done."

Source: DM News


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