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Spotlight on Overture
Tuesday, March 25, 2003
This newsletter highlights two topics. First, we want to recap Overture's February consolidation news. Second, we want to take a look at a new Overture policy that affects smaller web marketers and designers.
First order of business -- As most of you know, the major pay-per-click player has announced plans to buy AltaVista and FAST in one of the boldest and quickest consolidation moves in the search engine industry. This move can be seen as threatening to Overture's two biggest paid-listing partners - Yahoo and MSN - so why did they make this move?
Speculation abounds about why they are buying the two engines, but let's look at a quote from the horse's mouth:
"By leveraging the algorithmic Web search technology of both FAST and AltaVista, the company will be able to provide three types of search offerings to its current and prospective distribution affiliates: Overture's paid placement product, a paid inclusion product, and algorithmic search."
Our translation? Overture thinks (and maybe its stockholders agree) that it's time to stop sucking the teat of trickle-down revenues from the big boys, Yahoo and MSN. Overture wants to grow up and be a major player -- no longer satisfied with the partner role. So this consolidation move is an effort to stay ahead of the curve (think Yahoo buys Inktomi) and stay positioned to compete in the future with what will be the three remaining players -- Yahoo, Google, and MSN.
So what does all this mean for the rest of us? Put simply, consolidation is here. Eventually there will be 3 or 4 major players with a lot of power over our web-marketing campaigns. In short, we'll all be dealing, in one way or another, with Yahoo, MSN, Google, and Overture. Which isn't much of a different scenario than we deal with currently. Another reality that will continue to be true? You're going to have to pay to play -- even more than before. Pay Per Click, Pay For Inclusion, Pay for Optimization (or don't bother paying for Inclusion).
Second topic - Maybe it's time for consolidation in the web-marketing industry. Consolidate smaller web marketers into bigger players? Maybe. But we're actually talking about consolidating your separate Overture accounts. Being in the Ambassador program in Overture is now more important than ever. Overture is refusing third party account submissions to their engine without written permission from client companies (faxed on their company letterhead) authorizing that the SEO firm can setup the account. This does a few things for Overture. It no doubt will increase their auto-signup revenue. More importantly, we suspect this will streamline their internal operations. They are probably sick of calling credit card "owners" and talking to non cardholders. Sick of trying to get a hold of disinterested SEO firms after clients leave and credit cards expire.
But here's a thought for Overture . . .
If you want to cut out the hassle of smaller SEO players and web designers, that makes some sense. But this move may be more delicate than you realize. Many SEO companies have large numbers of smaller bidding clients with none of them individually qualifying the SEO firm for Ambassador status. As we understand it, you don't get invited to run with the big dogs until one client qualifies you. Only then can the accounts using different passwords and credit cards be linked for one "virtual" account, which then would qualify many of these smaller players to get the attention from Overture they deserve.
Why is this one-big-spender client a qualifier? And, in this time of consolidation, why is Overture not worried that smaller SEO firms will just start recommending clients put all their pay-per-click budgets into GoogleAdWords (clearly Google is a better B2B engine than Overture partners Yahoo and MSN). Google also lets clients bid on ANY phrases they want without pre-approval, and bidding in many industries on Google is cheaper.
Also, why would Overture alienate this market in the first place? Do they underestimate future pay-per-click competition from Yahoo or MSN, or not worry that these little, but important, SEO people will start to turn their loyalties towards those bargain-priced, well-run, smaller pay-per-clicks (AhHa, Kanoodle, FindWhat, Search123). These smaller engines keep courting our industry at shows, mailing gifts, and showering small and big firms alike with personal phone calls that promise unparalleled customer service.
When big players start to feel invincible, they can sometimes make mistakes and alienate customers. I hope, for their sake, Overture keeps the needs of the customer in the forefront and never crosses that line of underestimating their competition or their client's right and ability to choose new traffic suppliers.
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