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To play devil's advocate, these kind of brand ads are usually very cheap and frequently generate some incrementality - you're basically paying to have your link
by milesskorpen 7y ago
To play devil's advocate, these kind of brand ads are usually very cheap and frequently generate some incrementality - you're basically paying to have your links take over a larger part of page 1. Even if competitors weren't going to advertise, it might be worth it.
- taurath 7y agoIf I were a competitor, and it’s that cheap and effective for Expedia, then I’d never allow Expedia to have that real estate.
- cldellow 7y agoIt's absolutely extortion, but it's cheaper for Expedia to buy than a competitor due to Google's auction rules. Essentially, the bid to be #1 is discounted by the click-through rate. If 90% of people who search "expedia.com" will click an ad for Expedia, and only 10% of people who search "expedia.com" will click an ad for travelsite.com, travelsite.com has to pay 10x what Expedia does to make up for the lost revenue.
- perl4ever 7y agoDevil's advocate - isn't this a neat way of automatically being anti-incumbent and pro-competition?
- cldellow 7y ago? I don't follow the mechanism you're thinking of here.
- tempestn 7y agoIt might be if it were more transparent. So many people are mislead by these "ads" on branded search keywords though, it really is extortionate.
- _jal 7y agoIt is a tax on customers. Incumbents can generally afford to pay more than upstarts, and of course will just pass that cost on.
- hoorayimhelping 7y agoNo. It's a currently non-illegal way to extort businesses.
- FTFYcent 7y agoWait, I'm confused. Are you saying that Expedia pays Google less when people click on the ad vs when they click on something else?
- cldellow 7y agoNo, I'm saying Expedia pays less for ads for expedia.com than ExpediaCompetitor pays for ads for expediacompetitor.com. This gives Expedia an advantage when purchasing ads on the search term "expedia.com". Of course, Expedia would probably prefer not to purchase ads on "expedia.com" at all.
- hendi_ 7y agoI pay five figures a month for my "$domain" ad. It's not cheap by any means, but we're forced to buy, otherwise our competitors steal our traffic.
- lonelappde 7y ago"Steal"? If customers searching for your brand are happy to buy from your competitor with a different name, maybe your brand isn't so strong? And if you are profiting from advertising your brand to people who don't choose your product over alternatives, isn't your marketing just "stealing" purchases from competitors?
- kempbellt 7y agoYeah, that's not how it is working right now. It's more like: User: "Google, how do I get to Costco?" Google: "Here are directions to Target." User:"But I asked for directions to Costco." Google: "Target gave us a lot of money. So, firstly here are directions to Target. If you still want Costco, keep scrolling, but Target is great. You should shop here." When you literally search for one brand and the first result is a competitor, just because they bought out the ad space for your brand name's keywords, that is theft, imo. Or extortion if you'd prefer. It's at the very least, extremely disingenuous and sleazy. Customer loyalty is looking up the preferred brand to begin with.
- pb7 7y agoWhy does Google owe you traffic?
- lwansbrough 7y agoGoogle shouldn’t be a purveyor of brand quality in the case where the user has made an explicit request. If a user types in “shoes” should they 100% get shoes.com as the first result? Of course not. But Expedia? It feels wrong not to make that the first result.