Does “GoogleClick” Spell The End For Bid Managers?

This week’s announcement of Google’s new AdWords Preferred Cost Bidding may have been a whimper compared to the bang of its DoubleClick acquisition news. But the two events may be related in a way that could spell trouble ahead for the paid search bid management companies like Atlas, Omniture, KeyWordMax, etc.

Preferred Cost Bidding allows advertisers to set an average price they would like to pay per click (or per thousand impressions)—and then AdWords works automatically to ensure the click price hovers around the preferred bid price. It’s an alternative to arbitrarily setting bid prices high—the Maximum Bid we’re used to—and rewards savvy advertisers who have figured out their acceptable ROI and conversion rate, such that they know exactly what a click is worth to them.

In so doing Google has added another bid management alternative that was formerly the domain of pricey bid management/automation software. Google now offers Ad Scheduling (dayparting, or the ability to vary ad delivery by day of week and/or time of day), position preference (automatic adjustment of the bid price to attain a specified ad rank), cost-per-action bidding (where the advertiser pays only if/when a desired action, like a sale, is achieved) and a handful of other “bid automation” capabilities.

Little wonder that bid management companies at SES NY last week were downplaying the value of their bid automation features and instead trumpeting campaign management features that make it easy for advertisers and agencies to manage campaigns across multiple PPC services—mainly Google’s, Yahoo’s and Microsoft’s.

But does this put them on safe ground? The answer may be a big “No,” based on an aspect of the DoubleClick acquisition that didn’t make the headlines: DoubleClick sells a slick PPC bid/campaign management package called DART Search. It boasts features that put it squarely head-to-head with the category like Atlas Search and Omniture SerachCenter—which currently charge fees in the hundreds to thousands of dollars monthly.

A free bid/campaign Manager from Google makes perfect sense given their strategy to provide best-of-breed tools to PPC advertisers—think Google Analytics and the Website Optimizer, two acquisitions that Google now provides at no cost. But it’s likely to force the Atlases and Omnitures of the world to scramble to provide new features that set them apart from DART Search.