'MSN Search' to enter advertising war

[Torito]

in SRPs first ..... and hopefully in content pages later on? :)

http://www.bloomberg.com/apps/news?pid=10000087&sid=a1lGN8_MdFJM

They talk about a price war for advertisers .... followed by a price war for publishers? :eek:

Let us pray for it

[r2d2]

Interesting! Maybe we will have the option or not only AdSense, 'YahooSense' but also 'MSNSense' in the future.

Getting checks from Microsoft would be nice - I wonder if Bill will sign them :)

[Billyray]

Getting checks from Microsoft would be nice - I wonder if Bill will sign them :)

I think you're talking NONSense :)

I see pro's and con's for three major networks. The pro being that you won't have to rely just on AdSense (assuming that small publishers will have access). The con being that the prices advertisers will pay will probably go down because unless all advertisers use all of the networks then there will be price differences in their bids due to less competition. Just like the price paid for keywords on 2nd and 3rd tier ad networks is a lot less than on AdSense.

[lz83ny]

I like MSNSense, I hope they do as well as google.

[chromate]

This sounds like a good thing. I see where Billyray is coming from though. However, for the most part, I think prices will stay similar to how they are now basically because advertisers want as much traffic as possible. So, depending on the traffic quality, if they're paying $0.50 a click on AdWords then I don't see why they shouldn't bid to the same amount on other networks.

I think the main advantage of these new, very high profile, networks starting up will be to draw more attention to online advertising in general. Hopefully businesses that haven't already considered it will do so. That's gotta be good for everyone!

[Dan Morgan]

This is assuming that MS will also launch a contexual Adsense-like publisher program for content too.

Regarding prices, I think they will fluctuate, but remain pretty constant across the board (on average, not for specific areas). If advertiser x spends $250,000 on search per quarter, a new player [in the market, YahooSense/MSNSense] may mean in month one $50,000 of that budget maybe tested elsewhere. It may perform better click conversion wise, or have a cheaper cost generating more clicks for your advertsing dollar meaning a lower CPA (for the advertiser). This will result on differing prices for us, the publishers.

Where it will count, though, is it will mean AdSense will have possibly 2 competitors (of similar weight and quality) to its service. Surely it will have to raise the selling point to publishers let alone advertisers. We all know how much AdSense generates for Google will no quality competition.

[Kadence]

This war between the big three might be good news for advertisers and publishers both, as each company will have to sweeten the pot for publishers by offering a larger revenue share, as well as offering possibly increased ROI oppurtunities for advertisers. These gains would presumably come at the expense of Google's profitability.

[James]

Yes, but there's only so large of a cut they can give, and one of the bit reasons people use contextual advertising is so that they can get a cheaper price.

[ozgression]

The con being that the prices advertisers will pay will probably go down because unless all advertisers use all of the networks then there will be price differences in their bids due to less competition.

The is already alot of competition between Overture and Google. There was also three way competition when MSN used Looksmart (Google vs Overture vs MSN/Looksmart). It won't have any negative effect on bid prices, IMHO.


Just like the price paid for keywords on 2nd and 3rd tier ad networks is a lot less than on AdSense.

The difference is that MSN and Yahoo are alot bigger than the current 2nd and 3rd tier contextual advertising providers.

[Torito]

Maybe I'm too optimistic but I can only see good points in more competition, both for advertisers and publishers. I agree that this is going to be at the expenses of Google, but they had a huge piece of the cake and they knew this was coming anyway, so they just will have to readjust themselves. :)

[Billyray]

The difference is that MSN and Yahoo are alot bigger than the current 2nd and 3rd tier contextual advertising providers.

Basically thats my whole argument. Unless 100% of advertisers use all three majors then there will be a price difference. If for arguments sake only 99% use MSN then theoretically the price won't be as high. It's really just about degrees. For example you might see a price for "mortgages" on AdSense for 4.50 but only 4.25 on MSN or 0.58c on Kanoodle. I'll bet that there are price differences on AdSense and Overture right now.

I just don't see all advertisers using all 3 majors due to the pain in the a$$ factor.

However I can see the rise of 3rd party organisations to conduct arbitrage on behalf of advertisers which would bring prices back up.

[Oz did you get my PM the other day?]

[lz83ny]

I agree with you Billyray, I'd say big companies would go with big and trusted advertisers such as Google, Yahoo(Overture) and now MSN, whereas the smaller ones would stick to the less competitive ones.

[ozgression]

That's exactly what I was saying. Those publishers that use the "big 3" to display contextual ads on their sites will not see lower click prices.