Adwords Fallout?

Google appears to have changed their Adwords landing page criteria, as announced late last week. It has been widely speculated that this was done to reduce the opportunities for arbitrage within the system.

There’s a lot of fuming, mixed with no-reaction-whatsoever, depending on which discussion board you frequent. (TW)

The thing about arbitrage markets is that they don’t stay open for long – they must move towards efficiency. That is, the price in one market is the same as the price in another. This is especially true of an arbitrage market owned entirely by one vendor – Google. They will, naturally, want to force the bid price up, and pay out less. They will want to close those gaps, and, presumably, they have the real time data in order to make that happen very quickly. Those that survive will be those that can operate on the narrowest margins, and/or produce worthwhile billing figures.

It was never going to last forever.

Going forward, the opportunities for arbitrage will be between keyword markets – i.e. buying on Google, sending to Yahoo!, or another vendor. Also, a new field will surely emerge – PPC landing page optimization – as the unwritten rules just got that much more cryptic.

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