Reading a blog post from Kevin May of Travolution on the Tips from the T-List webiste about an original post by guest Travolution blogger Alex Bainbridge, Musings on travel ecommerce blogger (see how content travels?), I got confirmation on Google's CPC bid price inflation (I see it more as appreciation) in the travel space. "CPC is in substantial growth. They are nearing total coverage of queries - and as a result in Q1 08 there has been 20% CPC bid price inflation. This inflation is not to do with anything that Google is doing but just the nature of competition. Also websites are getting better at converting visitors hence are willing to bid higher prices."
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I recently did a small Google AdWords to promote tour packages on my www.demexicoacanada.ca website. It's been months since I did a campaign on Google Adwords and I did notice that bid prices had gone up substantially. Some keywords were up over 50% from the last time I used AdWords. This means I get less clickthrus for the same money, and it also means that many more travel organizations are bidding for keywords about Canada in Spanish targeting Mexican online users. Fortunately for me, I don't have to spend too much on AdWords ads because my sites do very well in organic results. For example www.demexicoacanada.ca ranks number one with the query "viajes a canada" (trips to canada) in Google Mexico.
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CPC appreciation, as Alex pointed out, is a result of competition, i.e. more companies bidding for the keywords. Google should not be chastised for this fact. It's their business model, and unlike unregulated mortgage lenders, it works very well. Besides it (high bid prices) should make my websites' ad rates more attractive to Canadian tourism organizations, so I'm cool with it.
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Regards,
Jaime Horwitz MBA
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