Feb 11, 2005

Paid Search Bubble?

I just learned that eBay is the largest purchaser of paid search advertising in the world and that they believe current prices are a bit out of whack.
Q. MarketWatch: You've suggested that there is a "bubble" in paid search. This suggests that pricing won't be sustainable. Why is it a bubble? And, can you quantify the rise in paid-search prices eBay is paying?

A. Bill Cobb: Frankly, we're surprised that keywords have gone as far as they have. Whether it will continue, I don't know. ... We believe we're the largest buyers of keywords in the world. It's our observation that large advertisers, global multinationals are experimenting and not being efficient. Over time they'll get better at this.

I posted some similar thoughts about this as a comment on Bill Cara's blog. I have never purchased an internet ad or keyword so my comments seemed to have been passed over by the main stream media.

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