Why is Paid Search Down?

Paid Search Traffic Share Down 26%

Heather Hopkins A Senior Online Analyst at Hitwise US. writes

Hitwise data indicate that the share of search traffic coming from paid listings is decreasing at the expense of organic traffic. In the four weeks to May 9, 2009, 7.25% of search engine traffic to All Categories of websites was from paid clicks. This compares to 9.84% in the same four week period in 2008 - representing a 26% decline in the share of paid clicks. This trend is apparent across 16 of the 17 Hitwise parent categories (i.e. Automotive, Food and Beverage, Health and Medical, etc). The only category that didn't see a decline in paid traffic was Education, which received 1.45% of search visits from paid clicks compared to 1.39% last year. See full article here

Certainly advertising budgets have been slashed across corporate America which is in part responsible for the overall decline.

Outside of corporate budget woes Lead Discovery has seen a huge increase in dishonest advertising. From "free grants" to "Google Cash" to straight up lies for Credit Card and Foreclosure relief. This reality has been supported in many conversations I have had with my peers in the lead generation space.

It's an easy game for dishonest marketers to succeed at. If you publish a completely sensational and dishonest text ad it will be clicked on more often than its comparatively boring and honest neighbors. This results in a high CTR on networks like Adwords, Yahoo and Adcenter as well as a lower CPC. And if they lie on their ads there is little doubt their landing pages are just as misleading. Unfortunately, Google and the like will not monitor nor punish deceptive advertising. I don't believe they are ignoring it simply to make more money, but instead they are pushing it off because it is a slippery slope to making them a de facto arbiter of what is false and deceptive advertising. Or putting them in a position to have to legally defend each and every business they approve to run ads on their network. Leave that to the FTC they say.

In the mean time, companies like ours are getting penalized for telling the truth and putting forth honest marketing campaigns. Slowly we have pulled out of the CTR based PPC space opting for other methods of advertising where we can pay for placement, or have a longer ad to distinguish our marketing message from the scammers.

The economy may be having a significant impact on overall online ad spend, however deceptive advertising, click fraud and trademark infringement will continue to erode marketer's confidence in SEM until the SE's muster up the courage to take action against it.

Google Cancels Free Checkout Processing

We knew that at some point Google would end this program.

I think it was a fair and brilliant promotion to reward advertisers who used Google adwords to get free processing. I personally thank Google for saving my company many thousands of dollars in transaction fees.There is no doubt that countless businesses dumped PayPal and picked up Google checkout. Unfortunately, Google did not execute on the promotional strategy before they ended the offer. While giving the service away for free, they needed to upgrade Google Checkout into an enterprise grade service. Instead, it's still a weak beta type mini service, with no incentive to stay with them.

Google Checkout 2009 Fee Changes On May 5, 2009, Google Checkout's
transaction processing fees will be changing from 2.0% + $0.20 per transaction
to a new tiered pricing structure, where the rates will vary
depending on the amount of your monthly sales processed through Checkout.

At that time, we'll also be discontinuing the free transaction processing
promotion for AdWords advertisers. Any AdWords transaction processing credits
accrued during April 2009 will be applied towards transactions that occur on May
1-4, 2009.

I'm not knocking Google here, again I have saved many thousands of dollars with the free transactions. However, transaction processing was VERY slow, averaging almost 7 business days for payments to post. There is no ability to track invoices sent, or payments requested and you can't export/import directly into your accounting software, or integrate into an online financial service. When it was free, these issues were tolerable, now that they are full price, I will be changing very quickly.Bank of America for instance offers an amazing suite of business tools and data integration features to seamlessly share data with your accounting software for about the same price, easy transfer of funds into your investment, business or payroll accounts. Yes, I know, most of us don't like B of A, but the pricing is about the same with every feature a business owner would want to have.

How do you think this change plays out in the overall strategy of Google and how us, their customers view them?

Are they doing a rope a dope, offering a ton of free apps, and then after everyone has integrated them into their life and business, start charging for them?

Were we, including myself, all stupid enough to believe Google was different and would offer free apps forever ?