This sounds like a reasonable assumption….
However, I have heard, and this is most likely pure speculation, that Overture has deals with high profile web properties where these web properties will outbit all competitors thus driving the per click price through the roof. Then, as part of the agreement, Overture then pays them a % of their marketing spend back.
It this arrangement actually exists, then the top bids are at a much lower cost than indicated, the overall price per click is artificially driven up, and on paper the whole process is perfectly legitimate. Why not reward high profile websites with a “kick back” at the end of the day if they are spending enough money?
This process, although nearing on what I would call conspiracy theory, would certainly explain how some websites can afford these astronomical bid prices.
I find it very hard to believe that advertisers would choose to continually lose money. I find it hard to believe that some advertisers can afford to pay 5 times of what I can afford even when my company has similiar profit margins, conversions etc.
Think what you will, but I would not be totally suprised if price fixing was a part of this….
Kevin 11 – Some food for thought