Search Marketer Warns Of Insider Data Trading

Algorithmic collusion could raise keyword prices

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Be prepared for a spike in keyword prices, if Didit’s Mark Simon is right. The reason: insider data trading among "the Big Three" Google, Yahoo and Microsoft due to recent acquisitions.

Search Marketer Warns Of Insider Data Trading

Google will own DoubleClick’s online campaign management software DART; Yahoo grabbed Right Media’s software; Microsoft now has its hands on aQuantive’s Atlas.

So what? Well, Simon says that’s a recipe for keyword price hikes since the Big Three now have direct access campaign data on rival networks. If a keyword isn’t fetching the same price on MSN that it is on Google, for example, Microsoft could raise the price so that it does. Additionally, Google could use DART, with both conversion and bid price data, to "optimize upward" bid prices to maximize revenue.

All that data, combined with responsibility to shareholders to maximize revenue, Simon argues, means that price hikes are inevitable. And if you think laws protecting consumers from collusion will help, Simon says think again. A "morally neutral" machine is hard to drag into court.

I’m not sure of that last bit of logic. If you program a machine to kill without prejudice then you, as the programmer, should be liable. But he might be right. And if so, advertisers should be aware the ceiling’s about to raise in 2008. 

Check out Simon’s post at SearchInsider for more explanation.

Search Marketer Warns Of Insider Data Trading
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