The announcement of MSN's own pay-per-click advertising program created numerous headlines recently. And while the formal rollout of their "Ad Center" product several months from now will represent a number of innovations, its launch promises to cause a significant increase in the workload of marketers managing pay-per-click advertising campaigns. And that may be the tipping point that leads more marketers to outsource the management of their paid search campaigns to search marketing agencies.
Advertisers can currently buy pay-per-click ads on Google and Overture and cover 95 percent of the paid search marketplace with just two media buys. But it isn't quite that simple. Advertisers still have to manage campaigns that often target more than 1,000 keywords, and they must do so on two very different platforms.
Overture, as most know, is a straightforward auction model. If your competitor is in position No. 1 bidding $2 per click, you can raise your bid to $2.10 and move into position No. 1.
In Google, your position is determined not just by the amount you bid, but also by the click-through rate on your ad. Because of this, if you are paying $2 per click in position No. 2, your competitor in position No. 1 may be paying only $1.25 per click. The strategy to optimize a campaign in Google is more complicated, requiring control over more variables than with Overture.
Enter MSN's Ad Center. Though the system may change between now and its official rollout, one thing is certain: It will be different from the programs in both Google and Overture. MSN has raised the bar by offering in-depth demographic information on specific keywords. Want to reach women consumers under 30 who earn more than $75,000 per year? You'll have the data, by keyword, to do just that. While increased demographic profiling data brings increased targeting opportunities, it also causes more work for advertisers.
Think of the amount of work required to manage a search marketing campaign on two search engines. Now envision the incremental time required to manage that same campaign on a third, entirely new search engine with an entirely new and different bidding platform.
The additional complexity and time required to manage a pay-per-click advertising campaign will soon more than double. Companies engaged in managing their own campaigns will want to plan for the additional heavy lifting.
It may be necessary to significantly beef up staffing and add headcount, or, companies may want to investigate any of the myriad tools that can automate the process.
Either way, in time, manually raising and lowering bids on three separate auction marketplaces on hundreds (often thousands) of keywords and maintaining a positive ROI while bid prices continue to escalate, will become an increasingly difficult undertaking.