Google's Premium Sponsorships On The Way Out

Google has yet to make an official announcement, but the signs are clear — its CPM-based Premium Sponsorships are to be retired.

ClickZ columnist Kevin Lee has a good article mentioning plans to phase out Premium Sponsorships, while WebmasterWorld has a thread on the topic suggesting that the AdWords program will begin to fill the former Premium Sponsorships spots in the near future.

For almost a year now, some unsold Premium Sponsorship spots have already been “backfilled” in cases by CPC-based AdWords listings. However, the change would apparently eliminate the CPM-based Premium Sponsorships ads entirely.

Comments from the WebmasterWorld thread suggest that the move won’t happen until 2004 and that a “Premium AdWords” program might fill the former Premium Sponsorships spots but on a CPC basis. So how would this differ from AdWords? The minimum CPC rate would likely be much higher.

The WebmasterWorld comments are all based on information passed along second-hand from Google ad reps. I’ve also had readers sending me similar comments that they’ve heard from ad reps, confirming the idea that Premium Sponsorships as they currently exist will only last through the end of the year.

“I was informed by our Google rep last week that Premium ads are being ‘merged’ into AdWords. Premium Ads will not disappear until January 1, 2004. However, if we want to continue more than 25 percent of our current campaign in Premium Ads (as opposed to switching to Adwords), we have to pay a new ‘market rate’ that is double the $40/1,000 impressions we have paid in the past,” one reader wrote.

For the time being, Google will only confirm that it is considering a number of options to mature its advertising programs. I expect to have more details for the following newsletter, after a planned visit to Google next week.