Pay-per-click (ppc) Prices Could Soar As Search Engines Buddy-up

Microsoft and Yahoo have been consolidating their search engine efforts recently - in an attempt to dethrone Google

. They have begun sharing search and marketing technology to streamline their operations and, presumably, up their combined market share - which is still a long way behind the leading light of search engine technology's vast user base.

But, as Bing technology becomes an integral part of Yahoo Search, some commentators believe that PPC management on the two search platforms could be hit by severe price volatility.

While this may drive companies towards natural search engine optimisation strategies in the short term, will it have a long-lasting effect on the perceived cost-effectiveness of pay-per-click advertising?

According to a new report from GroupM Search, a media investment firm, pay-per-click advertising costs could jump by as much as 78 per cent on the Bing platform as competition for priority listings increases. And this rise is expected to be most evident as Microsoft completes the integration of its AdCentre technology into Yahoo's services.

GroupM Search, which is a subsidiary of WPP - a major player in online marketing - said branded keywords were the most likely to suffer from dramatic price inflation.

The company claimed that while the initial spike in cost growth was likely to be short-lived, pay-per-click prices would settle back down at roughly 13-23 per cent above their current levels. GroupM Search chief executive officer Chris Copeland said: "Any time you interject change into the auction you invite pricing pressure. In this case, we see historical evidence that suggests, regardless of the bid tools and the preparation, a period of short-term volatility will exist."

This could turn a number of companies off investing in PPC management campaign on either Bing or Yahoo Search, but it also highlights the huge benefits of natural search engine marketing strategies - which will be left relatively unaffected by cost increases resulting from integration issues. Despite the potential price disruption, however, Microsoft and Yahoo show no signs of letting up when it comes to developing their search engine partnership. "Yahoo will continue to drive technology innovation in the search [market] to bring more value to users and advertisers alike," Shashi Seth, senior vice-president of Yahoo Search Products, said recently.

by: Mediarun-Alex Wares

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