Bid Jamming – Not So Sweet a Jam!

Bid Jamming refers to a practice that came to existence short after Overture offered its bid management tool. Now called YSM, Overture’s bid management tool shows online advertisers how much their competitors bid for a particular phrase. This tool soon proved to be a double-edged sword for search engine marketers.

Utilizing bid management tools, SEMs advertising on Overture, in contrast with Google AdWords, are able to set their ads' positions in the SERPs. A feature that can potentially be very desirable and straight forward. However, as the competitors also see your bid amount, they could simply change their bid to move their ads to their favorite position or even worse use the bid jamming tactic.

Bid jamming occurs when a competitor raises his/her bid amount to just a penny or so below your bid for a given phrase. This is possible if you have set your maximum bid as such that it has a huge gap with the next closest bidder underneath you. Your competitors, using this tactic, will force you to pay that max bid amount per click, whereas they only pay one penny more than the bidder underneath them.

Here, the competitors’ objectives are to increase your cost and make you burn your budget soon pushing you out of the auction. However, if they are not careful enough, you can reduce your bid one penny bellow theirs and jam them instead.

So, it is very important to pay close attention to your bids to make sure you are not jammed by your competitors and burn your valuable marketing budget. That is why I personally prefer a human touch on bidding as most of the current bid management tools available in the market might easily fall in the trap of bid jamming practitioners.

By Nima - Toronto SEM Expert