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Here's an interesting piece in Wired News about the very real impact of ranking higher in search engine placement. It's mostly about optimization, but the same goes true for SEM. There's lots of data that show CTRs drop off significantly after the first set of results. As we've discussed before this creates an "inventory problem." (Search engines are trying to grow their networks to boost CTRs generally and create more "first page" inventory.)

Notwithstanding the recent, apparent drop off in the price of keywords, I believe that, given inventory shortages, over time most SMEs will be unable to compete with large enterprises that want to lock up and own "generic" or category-based keywords (read: branding), where most of the traffic is.

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