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Is Google Marginalizing CPGs?

  • Ad Age, Wednesday, April 30, 2008 10:32 AM
Now that consumer packaged goods marketers have seen the branding potential of search, they've been presented with a new problem: the search model wasn't really set up for them. CPGs want their brands to be everywhere; as such, they're in the business of scale buying. But Google, Yahoo, MSN and the rest don't sell ads buy volume, they do so on a one-to-one basis. That means that if CPG players start buying more search ads, they're competitors most likely will, too, driving the price for related keywords upwards.

Ad Age asks, "whether Google, its newfound ally Yahoo and their joint nemesis, Microsoft, will look to modify the (search) pricing model to make it more CPG-friendly once the torrid pace of search spending slows and the appeal of giant branding budgets beckons?"

The answer so far is, "no." As one CPG marketer notes, "It used to be that impressions weren't in the pricing model," but now, "If you get too many impressions without getting clicks, the price goes up, or they kick you off completely," he said. "So they thwarted with their pricing model the window we had to actually deliver impressions ... because of course it makes their revenue go up. But that makes our value go down -- for everybody in package goods." In other words, Google has actually taken steps to further marginalize those brand marketers using search, like CPGs.

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