Overture Names Authorized Bid Management Providers

When bid management programs started popping up last year, one of my key questions to Overture was, are these OK? Should advertisers using them worry that they'll be getting in trouble? Silence was the response.

The limbo about these programs has now ended. Overture has named seven companies as "authorized" third party bid management providers. These are BidRight, ClickPatrol, GoToast, PPCBidTracker, PPC Management, SavePerClick and Sure Hits. More may be named in the coming weeks.

"Over the past few weeks, we've been deep in the negotiations with the various players," said Erik Hovanec, an Overture vice president in the company's business development group, who has been overseeing the project. "We are pleased to report that we have a half-dozen or more folks out there signed on as licensees."

Overture has not revealed any of the terms involved in the deals, but Hovanec said that licensees will agree to "appropriate usage guidelines" in how they interact with the Overture service. One of the chief concerns Overture has had is over how often bid management programs are changing bids.

NOTE (Feb. 19, 2002): Since this was written, Overture has said that the tools are now limited to making bid changes only six times per day, though bids can be manually changed as often as desired. And so far, unauthorized tools have not been locked out. Overture is still negotiating with some of the makers of unauthorized tools, and the implication is that blocking won't happen while negotiations continue.

"A lot of the competition among the players has been among the frequency of bid changes," Hovanec said. When the programs first emerged, they might have changed bids every 2 hours, he explained. Then someone would raise the bar to changing every hour, and so on. "We're to the point where there are people out there offering sub one-minute bid changes," Hovanec said.

What's wrong with that? After all, if an advertiser wants to save money, they might need to check for emerging bid gaps all the time. Overture counters that such frequent changing can burden its system and not necessarily be a plus to advertisers.

"It's really unclear that the advertiser is really getting much of a benefit," Hovanec said. "If multiple players have bots operating on their behalf, it just repeats a pattern of bid changes."

The idea seems to be that by limiting such programs to a set frequency level, Overture can at least reduce the server burden without taking anything away from advertisers. The programs could still operate and on a equal playing field, in terms of bid frequency. In turn, that means the competition to be the "best" tool will be channeled into other areas, such as offering a good interface, competitive pricing or return-on-investment measuring tools.

"That innovation isn't going to be around brute force speed of bid changes," Hovanec said.

When I first spoke to Overture on the issue of authorized bid tools on Monday, it didn't reveal which companies had been approved nor what the what the frequency limit for approved programs would be.

After the interview, Overture provided the names of approved vendors in a follow-up email. I've since reviewed them quickly. Either there is no particular time or frequency limit that Overture has told them to follow or the companies have yet to make changes reflecting such limits to their web sites.

For example, BidRight says that you can make changes every minute and ClickPatrol, "as often as you choose." In contrast, GoToast and PPCBidTracker seem to have a 30 minute limit. If I had to guess, I suspect that 30 minutes may emerge as a time limit that vendors have to obey. This is all speculation, of course. I'll be following up to see what more details are available about limits from Overture and the vendors themselves, now that the approved companies have been named.

Overture did stress that advertisers will always be able to change their bids at any time, as frequently as they like, by using the online bid management center directly.

Overture had no comment about what is going to happen to unlicensed products. Will they be banned from Overture? Will Overture try to block them?

"We aren't going to do anything until we announce the program and the rollout," said Hovanec.

Hovanec made that statement before the approved companies were named to me in Overture's follow-up email. Now that the authorized vendors are known, I think it's fair to say the program has been announced. Given this, we may see Overture now begin to take action against unauthorized products.

Clearly Overture will have to do something about them. It can't set a level playing field for authorized products and then let unauthorized products have an advantage. To combat unauthorized products, it's likely the company will employ three major tools against them: blocking, legal action and altering its terms of use.

By blocking, Overture would constantly make small changes to its online bid management center, which in turn forces the third party bid management programs to alter how they works. Overture could also block by looking for IP addresses and preventing access.

By legal action, Overture could file suit against any third party company interacting with its service. The legalities are interesting, though. The closest comparison would be with the eBay-Bidder's Edge suit. In that, Bidder's Edge gathered eBay listings as part of its auction-comparison service. eBay successfully argued that Bidder's Edge was trespassing on its site, costing it server resources.

In the case with Overture, the third parties are interacting with Overture on behalf of Overture advertisers, who arguably have a right to access their accounts in any way they like. Trespass may even be hard to argue, if the companies gather current bid data by logging in on their clients' behalf, rather than scraping it from the public Overture results.

Of course, therein lies the third weapon Overture could employ: its terms of use. Advertisers might have to agree to use only authorized products to interact with Overture. Failure to do so could get an advertiser booted from the Overture network. Overture had no comment about whether such terms might be written into the advertiser agreement.

It's important to recognize that none of this has happened right now. Overture says it is not blocking unauthorized third party tools at all, for the moment. However, the company is preventing makers of unauthorized products from advertising on Overture.

"Due to the potential damage that unauthorized bid management tools may inflict on our systems, we will only approve Pay-For-Performance listings in this area submitted by authorized providers," said spokesperson Jim Olson.

This is disturbing, because Overture is protecting itself in a way that it does not protect others. For example, I found an ad for an email harvesting program by searching for "email harvesting" at Overture. Why is it not protecting scores of email servers from the harm these programs can cause? "DVD rippers" brings up programs that can copy DVD movies to CD-ROMs, perhaps (or perhaps not) violating the rights of movie studios. These are just two of no doubt many examples where Overture does not police listings against potential harm.

Overall, the authorization program is probably good news. The status of these programs needs to be cleared up, so that advertisers can feel comfortable using them. The programs also fill an important need, in making bid management less time-consuming.

What remains to be seen is how exactly the programs will be allowed to operate. There also remains one major concern. What if you have purchased a program or service before the authorization program existed, only to find that it is now unauthorized? Overture had no answer to this.


How Overture Works

A guide to bidding at Overture.

Bidding Managers

A rundown on major bid management programs. I've listed all those that are Overture approved with the exception of "PPC Management" and "Sure Hits." Overture didn't send URLs for these services, and it's difficult to tell exactly which company runs them. When I know, I'll post the URL.

PPC Bid Management Software Showdown
Kalena Jordan's put together a great chart listing various bid management programs and comparing their features, along with short reviews of each product.

Overture Dumps "Bid Management" Listings
Webmaster World, Jan. 14, 2002

Thread starts with excerpt of letter from Overture about the removal of terms and sites relating to bid management software.

SendTraffic: TrafficPatrol

Offers two new paid listings management tools: TrafficPatrol and TrafficPatrol ROI. The first monitors your bids and makes adjustments automatically, while the second adds return on investment calculation features. An Overture authorized product, though a partnership with ClickPatrol.

Tangare Pay Per Click Manager

A bid management tool I've previously listed that has released a new version with support for new paid listings search engines. In all, it optimizes bids on Overture, Overture UK, FindWhat, Kanoodle and Espotting. Not an Overture authorized product.

Search Engines and Legal Issues: Crawling & Linking
http://searchenginewatch.com/resources/legal.html#Crawling And Linking

Articles about the eBay-Bidder's Edge case can be found here.