What Google's Preferred Cost Bidding Means to Online Marketers

Notable post about GoogleClick over at Search Engine Land today. I have believed since the early days of PPC advertising that the correct way to approach the channel is also the simplest from a marketer's perspective. If, as a marketer, you have a good grasp on the unit contribution of each product/service you offer and if you have a good idea of the margin you are willing to accept each time you sell said product/service, then there is little benefit to spending a lot of time managing bids. This basic rule applies to all media, not just online ads but PPC in particular provides all of the information marketers need to manage their spend in this fashion. The fact that Google is now enabling bid management to be handled in this fashion makes tons of sense and will, as the Search Engine Land post points out, create a significant amount of additional pressure on SEM and online shops to deliver material value to clients. In addition to the marketing services firms that are affected by this new feature, it will also be interesting to watch how lead gen businesses like Service Magic and HouseValues are impacted by it over the long run. Isn't Preferred Cost Bidding really what lead gen is all about from an advertiser perspective?

Google and Offline Ads

There is a story (premium link) in the Wall Street Journal today about Google's entry into the offline advertising marketing (print, radio, etc.). We've written about this issue here. While it is truer now than ever that Google presents a major threat to the old-line advertising agencies, it is also true that Google's entry into the offline advertising market is easier said than done. With respect to radio and print, much of it is local. And selling locally means putting feet on the street. Today, Google does not have a salesforce that fits this mold. Anecdotally, I'd venture to guess that much of the growth of AdWords has been powered by a combination of an extraordinarily low-risk cost of entry, terrific return on investment in most cases, and phenomenal word-of-mouth. In other words, the service is so good, its customers drive awareness and it sells itself. Selling print and radio spots presents an entirely different set of challenges for Google as the article points out. A logical move for Google to make if it's serious about entering the offline ad markets is strategic alliances with and/or acquisitions of media (newspapers) and/or directories (yellow pages) that already have large salesforces with existing relationships with all of the local ad buyers.