Ill be honest, the thought had never crossed my mind, after all, the financial comparison sites are some of the biggest spenders with Google and so contribute a large chunk to Google’s Adwords revenues each year. But it was mentioned in a conversation the other day with Richard Gregory, Latitude’s Chief Operations Officer, and it actually adds up.
Car Insurance is one of Google’s biggest markets with the number 1 PPC position commanding CPC’s in excess of £10 and thousands of searches each month. So you would think that these comparison sites, who at the time of writing hold 2 of the top 3 PPC positions, would be adding to, not taking away from, Google’s revenue growth targets. But when you look at the trend for car insurance searches on Google over the past few years you will see a steady decline since mid 2006.
And if you plot that against searches for the brand names of the major insurance comparison sites you can see that the growth in their search volume could be the cause of this.
Prior to the emergence of comparison sites, if you wanted a quick an easy list of insurers online, what did you do? You searched for car insurance on Google. But with the amount of branding activity these sites do offline and the awareness it has generated, people are fully aware of the places they need ot go to compare car insurance offers and providers. So they are now going direct to their site of choice, or performing a brand search for that site instead. Therefore whilst the comparison sites are spending a large amount on Google Adwords, they are taking away a large chunk of its revenues from this market through their very presence. And you have to say, as people look to save every penny in difficult times, this trend is only going to continue, and car insurance will become a less and less lucrative market for Google and they will have to find a replacement cash cow for the future.
Maybe this trend was a contributing factor to the decision to allow gambling advertiser on Adwords? And this is their replacement revenue source, that is of course until someone finds an effective way of comparing odds on the leading gambling sites and we are back where we started!