• http://www.alanmitchell.com.au alanmitchell

    Hi George,

    Great analysis and some interesting points you raise. I agree that giving the advertiser the ability to bid different amounts to each network would be a step towards efficiency, and would benefit both the networks and the advertisers by reducing consumer surplus and maximizing utility.

    Those networks which perform well, such as Google, AOL, Amazon and Comcast will see their bids increase, while under-performing networks such as eBay and Ask will see their bids reduce. Separating networks will stop the good performers subsiding the poor performers, so will create an incentive for the poorly performing networks to improve targeting and relevancy of traffic.

    But as you point out – will it work in practice? Will it over-complicate paid search management?

    Perhaps for some advertisers, who will inevitably continue to bid the same for each network. But I think the option to bid differently for each network is worthwhile, even for the minority of advertisers who would take the time to analyze the relative profitability of each network.

    Network separation would provide an extra opportunity to stand out from the competition, reward insightful analysis and help make bids a better reflection of their true value.

    I say bring it on.

    Alan

  • http://www.rimmkaufman.com George Michie

    Glad to have you on board, Alan!

  • jasoncook

    George – great contribution and analysis. We’ve split some of our campaigns to allow Google vs. Syndication bidding, but the uber-manual process is neither efficient nor scalable. If the SE’s would build a platform that allows “as-is” bidding as well as a more sophisticated approach – as you’ve advocated for – then everyone would win in the long run.