November 14, 2003

In a rare sign of trouble for the booming search marketing business, Google is fending off complaints from angry customers who say recent changes to the company's advertising program are costing them sales.

The search engine giant tweaked its AdWords service in late October, saying it was making the move to better identify successful ads--those that get clicks--and to increase their visibility. It also took steps to reduce the number of unsuccessful ads that show up on its search results pages. A company representative said overall ad response rates have improved since the changes took effect.

But the new system hasn't improved results for everyone, leading to an outcry from those on the losing end. Disgruntled customers say the new system pits smaller companies against bigger ones, ultimately favoring deep-pocketed advertisers that can afford to outbid rivals for coveted keywords. In addition, some customers say the changes may be responsible for decreased conversion rates--the crucial sales that come after someone clicks on a Web advertisement.

"We would love to spend more with Google, but we're not going to overpay on (search) terms, when the surfer will click on terms and be frustrated and go elsewhere," said Daniel Mardorf, the Webmaster at Cellphonecarriers.com, who said he's seen response rates and sales from his Google ads drop since last month's changes took effect.

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