The rising cost of online advertising.

According to this BusinessWeek article there is no end in sight for the increase of costs associated with online ads. I like the way that the Google CEO puts it saying there doesn't seem to be any price resistance. Of course that means that people at this point seem to be willing to pay almost anything for certain kinds of online ads. Obviously the Google CEO is talking about Google Adwords. And for them right now that might be the case, but with new programs being rolled out all the time, it may not be that way forever. It will only be a matter of time until there are other avenues of getting more visitors into your web site than the method of online ads. I know that Yahoo has acquired Overture some time ago and that's their avenue for paid ads. I think Overture is sometimes overpriced . I think they're not as good as the Google, which gives more flexibility for companies using them. Yes, I suppose it's true that there's no downward pressure on the price it paid ads right now. But no company should have hubris about this right now, as there are most certainly going to be new ways to attract visitors, not just online ads.

I think it's interesting that many of the search engines seemed to have stumbled into the ad world without really knowing it. I don't even think they really know the game very well. When you look at some of the things that they do and how they approach their customer, I don't see a lot of service or customer appreciation. They seem to take for granted that these people will pay whatever price they charge right now that's the atmosphere. I think it's this kind of unappreciation of those who use their service that will eventually bite them in the rear later on. This is how it always goes with something that's hot, and later not. Because there is a huge market for reasonable ad costs, there will be other alternatives. But for right now, it seems like the major search engines have the amount of traffic that people need to see in order to make the work. But I've run a lot of numbers on this, and I don't think that paid ads do as well as everyone thinks. Certainly for some types of things it might, but for other items or services it doesn't work as well as people think it does. Right now, I think that paid ads are similar in nature to a telephone pole with homemade advertisements stapled all over it. Unless it's in an area where you're going to reach the kind of people you want to reach, it will do no good. But if that advertisement is in an area where people might have a high interest in the subject, then it might be successful.

Business has bought into the whole online world, and now has to dance to a fiddler that it never intended, namely major search engines. As a result, it's changing the way companies look at their ad budgets, how much they do locally, and how much they do nationally. It's an interesting change in the way people do business and probably the people that are most afraid of this new online advertising change our newspapers and Yellow Pages. I've talked about this extensively and there is great fear. For all people involved in this, it brings an air of instability waiting for things to settle. And for right now, paid ads will rule the day on the major search engines.

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