Looksmart enters PPC market

• Oct. 2, 2003

Looksmart entered the highly competitive PPC market today by launching a new product called "sponsored listings."

While Looksmart already has a form of pay for performance listing, this new product gives the advertiser more control in that they can now opt to be number one for a term, provided they wish to pay for the listing. Much like Google AdWords, and Overture premium listings, Looksmart sponsored listings allows you to outbid competitors for key phrases in your market.

Unlike Overture and Google, however, Looksmart will lower your bid automatically if you are bidding excessively more than your nearest competitor. This will help lower your overall cost per click while maintaining your desired position. In other words, if you are bidding $5 for a term and your nearest competitor is bidding 25 cents then your bid will be dropped, likely to 26 cents. This keeps you above your competitor in the listing, but lowers your potential cost per click by $4.74.

While this is nothing new - Google AdWords does something similar in that they can tell you based on your budgeted estimates where you should appear in the results, it is new in that this product will automatically adjust your bid for you.

What this means is that there is a new, independent player in the PPC market. Since AdWords are a Google product, and Overture listings are owned by Yahoo! you can now go to an independent advertiser to pay for your results.

What this means to you as the advertiser is the potential for greater web exposure. There have been cases where Overture or Google were not selected as paid placement suppliers because each of these products is owned by a competitor to the site wishing to display paid results. Since Looksmart has no affinity to any major engine, they have the potential to win a few of those lucrative contracts. These are the types of contracts that Looksmart can win.

The only drawback with Looksmart's new plan from an advertiser''s point of view is that if it becomes too successful then they could get bought by one of the major search engines. We've already explained how MSN needs a paid search component to stay competitive. We even told you that they could be in the market for Looksmart in a round-about way by announcing that they may not wish to use the services any longer, causing the share price to drop. Therefore it wouldn't be much of a stretch of the imagination to believe that MSN will buy Looksmart at a much lower price than current market value.

One thing is sure - more competition is a good thing. Even if it means spending more money on a PPC campaign to get more traffic, in the end it could cost you less if they become a major player in the paid listings space.

Rob Sullivan
Production Supervisor
Searchengineposition.com
Search Engine Positioning
specialists