Feb
27
Does Pay-Per-Click Have A Future?
Filed Under PPC | Leave a Comment
Reading the Google hit piece that appeared in Barron’s this week got me thinking about the whole pay-per-click model. Pay-per-click (PPC) has been around for more a decade, and while Google has made some positive changes to it, it’s showing its age.
If you think of the Internet advertising process as a series of actions, it would go like this:
Impression -> Click -> Action
Back in the old days the metric was CPM (cost per thousand), and advertisers paid per impression (getting the ad on the screen). CPM favored the publisher over the advertiser, as the publisher’s responsibility ended at the first part of the process. DoubleClick, an early ad serving company, came up with their DART system to match the right advertiser with the right screen in order to maximize the return on CPM.
PPC moved the metric forward in the process, measuring success (and payment) based not on how many times the ad was served, but how many times it was actually clicked. When most people think of PPC they think of Adsense, Google’s contextual advertising engine. But PPC is employed in banner advertising, on big ad farms like Doubleclick and other companies, and in some affiliate programs, though the number seems to be waning.
The latest incarnation of search engine based PPC (thanks to Google), works like this: you select keywords that you think people will use to search for stuff related to what you sell. For example, if you sell pretzel dough you might want to advertise under pretzels or making pretzels or something along those lines. Selecting keywords is way beyond the scope of this article, but there are plenty of companies out there that make a living helping you pick keywords. Anyway, you then bid on those keywords and your ad is shown on the page with the search results.
With Adsense Google moved the context from the search engine results page to your web site content. It reads your site and decides what keywords to use to display advertising on your site, just as it would with a Google search.
For affiliate programs it’s a little different, but the concept is the same. You choose the ads (or pay someone a piece of the action to choose the ads for you), and they get displayed on your pages. Rather than selecting the keywords explicitly, you are selecting the ads based on what you (or your agent) thinks people who have chosen to read your content may have an interest in seeing.
When someone clicks on the ad, you get paid. It’s that simple.
For Adsense, appearing first on the list makes all the difference. A study suggests that being the #1 choice increases your chance of being clicked by up to 40%, because a lot of people don’t look past the first entry (I always check the first few). The difference in bids between the first position and second position could be staggering. For example, 1900 people searched Google for the word tax yesterday. The top spot in Adsense would have cost you $25.12. Positions 2 and 3 drop to $6.96, and 4 and 5 would have cost you $4.24.
My experience with Adsense tells me that in this case the first position would probably pay Google close to $10.
As the publisher, this is a home run. Every time the person clicks I get a $5 bill. God, what a country!
As the advertiser, $10 to get the person in the door seems like a lot of money to me. If I’m selling a high margin item (like maybe tax software or one of those quickie tax loans), it seems like it may be okay.
But I still have to get them to buy. Conversion rates (getting the person to take some action once they’ve clicked on the ad and gone to your site) vary wildly, but I always use 1.5 – 3% of those who click on an ad. That means that 97 – 98.5% of the people who click on the ad do not buy. Let’s use 2% as an example. That means that for all the five dollar bills flying into the publisher’s pocket, only about 2 people out of every hundred will buy anything. So for every $1000 I spend I get 20 sales. That means that every sale costs me $50. Your results will vary, of course, depending on how targeted your keywords are and your industry and offer. Get the conversion up to 5%, for example, and you will be down to $20 per sale, which is a little better. I am designing a what-if tool to help with this, and I’ll post it when it’s ready.
One of the reasons for low conversion is probably click fraud. If an unscrupulous person wants to make money in PPC, all he needs to do is find a bunch of people (or computers) to click on the ads on his website continually, and he’ll reap the rewards.
Barron’s believes that the smart money is getting out of PPC. They cite FTD as an example:
Flower giant FTD Group (FTD) recently complained about the high price of search advertising. “During the Christmas season, certain online search engine costs increased significantly over the prior year, and as such we made the decision not to pursue the resulting high-cost order volume,” said Michael Soenen, chief executive officer.
First off, let me just say that as an advertising exec I pitched FTD, and they didn’t strike me as the brightest bulbs in the chandelier. That being said, it’s easy to see why FTD wants out. Being #1 or #2 in the keyword Flowers around Valentine’s Day would have cost between $6.25 and $10.00. There were 100,000 searches on the days close to VD on that keyword, and 11,500 on Flowers Delivered, which would have cost between $5.03 and $6.72.
Some simple arithmetic shows me that FTD nets about $6.20 per transaction across its network. So the transaction is either a wash or a loss. FTD is the number 1 ad on Google for their keywords, so I guess they decided to eat that first transaction, counting on continuity to save them. According to Barron’s this isn’t going to work either:
One industry executive noted that the lifetime value of a customer acquired through Google for his/her business had approached zero. Oops. So much for that theory.
So the answer seems to be that the big guys are getting out. Using the flowers example, though, the top 5 ads are FTD, ProFlowers, Hallmark, 1-800-Flowers and Teleflora. So I guess it’s going to happen over time.
So where is the future? According to the inventor of pay-per-click himself, Bill Gross (formerly of GoTo.com), the future is in pay-per-action, which moves the metric down to the final part of the Internet advertising transaction, where we think it belongs. There’s a terrific article on Seochat.com that has more information on this.
Pay-per-action is simple…both parties have a stake in the outcome of the click, whether that is a sale, a lead, or even an instant telephone call (more on that in part 2). We think this is going to be the next big thing, and it’s already happening.
We are a dedicated team of Affiliates who wants you to succeed online. Come and visit us at Wealthy Affiliate University.
Check out Wealthy Affiliate Information Now.
Find timely info in the topic of web traffic – this is your own guide.
Feb
27
From the Wealthy Affiliates, comes Beating Adwords, a remarkable ebook, which is in my opinion, the most useful and most up-to-date AdWords guide available to date. Published by the amazing Carson and Kyle, successful internet marketing entrepreneurs in their own right and respected owners of WealthyAffiliate.com, Beating Adwords is the ‘superior AdWords guide’, providing an expert look at Google AdWords and simplifying the whole notion of earning significant and residual online income as an Affiliate Marketer from a Google AdWords campaign or other Pay Per Click (PPC) advertising campaign.
It is written in an easy narrative that the newest newbie or beginner can understand and yet is jam-packed with unique and advanced strategies for experienced internet marketers alike, Beating Adwords takes you by the hand and leads you step by step through the process of affiliate marketing, showing you in easy to follow steps how to set up a Google AdWords account and campaign correctly and efficiently to generate a much higher income and return on investment (ROI) with lower CPC expenses.
These Wealthy Affiliates are AdWords ‘experts’ who are already earn an incredible income promoting affiliate products with PPC campaigns. I have personally utilized the techniques taught in all my campaigns and seen a dramatic improvement to my quality score, CTR and thus lower Cost per Click (CPC). By buying Beating Adwords and putting the ideas to work, you will not only recoup the price but also you should rapidly see a dramatic improvement in your campaigns and your AdWords income and ROI will start increasing dramatically.
To give you a feel for the depth of coverage in this definitive guide, here is the books contents:
To give you a feel for the depth of coverage in this definitive guide, here is the ebook’s main contents:
Section 1 – Introduction
Welcome to Beating Adwords
About the Authors
Making Money Online
Affiliate Marketing
Pay Per Click Advertising
Section 2 – Getting Started
Google Adwords
Setting up Your Account
Section 3 – Affiliate Programs
Finding Affiliate Programs
Using Clickbank.com
Profitable Keywords
Section 4 – Advertise Your Product
Starting a New Adwords Campaign
Adgroups
Writing Effective Adcopy
Adcopy that Sells
Section 5 – Outsmart Your Competition
Quality Score
Effective Bidding Techniques
Traffic and Cost
Being Profitable
Section 6 Adwords Optimization
Inactive Keywords
What can you afford?
Split Testing
Dynamic Keyword Insertion
CTR and Match Types
Content Network
Section 7 – Web Pages that Sell
Direct Linking vs. Landing Page
Creating Relevant Web Pages
The Power of a Review
Review Pages for the Advanced Marketer
Dynamic Page Optimization
Sample Landing Pages
Section 8 – Success
Staying Focused
Section 9 – Bonus
Low Cost Advertising Techniques
Promoting Beating Adwords
Section 10 – Resources
Glossary
If you use, or are thinking of using PPC in your Internet Marketing efforts, Beating Adwords is the one and only product you need for Google AdWords success and PPC success generally and I have no hesitation in recommending it to any newbie or veteran alike who is serious about taming adwords and following the Way of the Wealthy Affiliate.
It also has a 60 day 100% money-back guarantee! So you have nothing to lose.
Instructive, Informative and Superior, do good market and keyword research, apply the techniques and The Possibilities are Endless!
We are a dedicated team of Affiliates who wants you to succeed online. Come and visit us at Wealthy Affiliate University.
Check out Wealthy Affiliate Membership Now.
Access practical suggestions in the sphere of free traffic – welcome to your personal knowledge pack.
Feb
27
Wealthy Affiliates Taking PPC To New Heights
Filed Under SEO | Leave a Comment
Following my recent article “Using PPC and SEO in harmony” I will now look deeper into exploring the various ways PPC can be used for niche market research.
Google’s Adsense is probably the best way for using a PPC campaign due to its high traffic volume, but not because of its Adsense system. No, indeed similar systems can be found at abundance throughout the web. Google hosts millions of searches each day, meaning that any PPC campaign is bound to find a few customers amongst such numbers.
The chronological way for using such system would be to bid for your primary keyword, specially if your site isn’t organically in the first page of Google and I can be certain that indeed most of you aren’t even close, which is why you are using PPC. Using PPC for your primary keyword is all good and well, but have you noticed how many other websites are bidding in vein for the exact same keyword? You are not the only one using PPC and if you don’t have a certain strategy in doing so you might not even get any results from such system, even though you are paying!
The most popular keywords for a given theme are competed for fiercely. So how do you go about bidding low and minimizing competition for maximum results? Well, you need to focus your campaign on niche keywords.
What do I mean by “niche keywords”? Niche keywords are words and phrases that relate to your site but are undisputed for because they are very specific. For example, if you had a website that sold second-hand furniture in New York City, instead of bidding for “second-hand furniture” or “used furniture” you can be more specific by using “second hand furniture in New York” and even “furniture New York”. How about “New York furniture” or “furniture delivery in New York”? These keywords are very specific and will generate fewer clicks, but they are QUALITY clicks. These clicks are far more likely to turn into paying customers than people who click on “used furniture”, because people who search for such general phrases could be anywhere in the world and are out of your business range, but they could also just be fishing for prices or undergoing some research. Competing for very general keywords is unwise and unprofitable.
When someone searches for “second-hand furniture New York” you immediately know they are within business range because they live in New York. Making this person far more probable of being a potential customer. Not only are they in New York but they are looking for second-hand furniture within their city, bingo!
Finding the right key phrases are not hard, you just need to really think about what a local customer might type into the search box to find you. The more specific, the better. And you will surprisingly find that with such specific keywords competition will be reduced to almost zero, because your competitors are too busy bidding for popular words! Not only will these keywords provide you with golden clicks but also you are the only choice they will have from these keywords! How better can it get?
Bidding for words that are popular is a waste of time and effort. The key to PPC is knowing when and how to use specific keywords to maximum effect by a careful combination of educated guesses and informed decisions.
We are a dedicated team of Affiliates who wants you to succeed online. Come and visit us at Wealthy Affiliate University.
Check out Wealthy Affiliate Membership Now.
Read useful points of view in the sphere of web traffic – welcome to your own guide.