Hi all,

I consult Overture.com regularly to check out the latest egregious bids for web hosting-related keywords, typically "web hosting" and "dedicated servers." I was shocked to find that the bids have fallen dramatically of late. A mere couple of weeks ago "web hosting" was up around the $6.50 mark, and "dedicated servers" suprassed $10. Now they're both in the four dollar range.

Any ideas or explanations as to why this happened, and why it happened so suddenly? Does it have to do with the holiday season or perhaps a change in Overture's policies? Not that I think $4 bids are too low, mind you. The ridiculously high bids of a couple weeks ago were unsustainable and due for eventual correction, but I am surprised to see such a dramatic reduction in such a short amount of time.

Ideas?

Best,

Will

After the addition of the Oveture results to Yahoo the traffic from those searches probably doubled (mine did) and the compainies that have that much money to bid with are definitally on budgets. They probably had to cut the bids to stay below their ad budget limits.

No kidding - you can not pay that much for a lead on a product/service that has such a low price+margin, such as shared hosting. In fact, bidding on overture for most terms have fallen down for several reasons:

1. Lot of companies who were bidding have closed.
2. Companies who are still open have reduced their budget.
3. Because of both 1&2 above, there is no bidding frenzy anymore.
4. Gone are the days when traffic meant everything and getting traffic was important but not anymore - sales, revenues, profit is what matters.
5. When average bids are low, more people tend to participate but when bids go through the roof, no one want to get in there.
6. The way this whole thing is supposed to work there only room for about top 20-40 listings and the rest of them don't get attention. However, these days only the top 3 positions get a lot of attention.
7. So, it worked well for a while like everything else but it is not sustainable on that basis. When things are new (like banners in the early days) more people want to experiment and then the popularity decreases, naturally.

If you look at the ppc listings accross many sites, you will see pretty much the same sites, especially in the top 10-20 spots. In my opinion, overture has created a new problem for themselves by virtually posting their listings on all major search engines and sites. Once people know that they are seeing the same results time and again on all sites then it won't work like it used to.