Home
>
Pay-Per-Click Advertising
>
Per Click - Do They Know Something We Dont?

Per Click - Do They Know Something We Dont?

I have utilized pay-per-click (PPC) advertising since its inception about two years ago. With PPC, the advertiser is only charged when a person actually clicks on their link. The amount you actually pay for each click is referred to as the cost-per-click (CPC). I've got to admit, I was pretty leery at first. But since then I've watched the price of certain search engine keywords skyrocket in excess of $10 per click! The big question isn't how much it costs per click but how many clicks does it take to get an acquisition. I've often asked myself, why would so many companies pay that much money for one single, measly, push of the index finger? The answer is simple - it just works!

HOW TO JUSTIFY $10 PER CLICK

The advent of PPC advertising has changed Internet marketing forever. It represents a free market in much the same way as eBay -- controlled by a natural supply and demand relationship. For a keyword phrase such as "debt consolidation," the top five advertisers are willing to pay cost-per-click charges of $10.01, $10.00, $9.99, $7.00, and $6.97. My first reaction was, something has to be wrong with this picture - it just can't be! So I looked at the "life insurance" phrase, where the top five range from $7.00 to $3.50. Then there are drugs like "Xenical" that range from $6.76 to $6.74. There are many more examples where the cost-per-click exceeds $6.00, $7.00, or $10.00, but you get the point.

The fact of the matter is that while PPC advertising can work quite well - it can also be a flat out failure. When companies are willing to pay more than $5.00 per click, you can be pretty certain that they have figured out how to make it work - otherwise they wouldn't pay those prices.

THE SELECT FEW

I have seen many situations where PPC will work for one company but not for another in the same industry, using the same keywords. Large and small companies will venture in, bid for a week or two, and then drop out -- never to be heard from again. Some will come in, drive the prices way up then drop back out to obscurity. The select few who are successful have found the secret -- a combination of patience, determination, creativity, keyword selection, management and analysis. They do the math, every day - they manage the bids, every day - they look for new keywords, every day - they analyze the results, every day. It takes a great deal of work to figure out how to make PPC advertising deliver results, and the ones who have are now benefiting - every day.

WHAT IS THE COST OF AN ACQUISITION?

In order to determine if your PPC advertising is justified, the first thing you need to understand is your current acquisition cost - what does it now cost to acquire a new customer or order? It's amazing how few companies know what their cost of acquisition is. To keep it simple, take your total advertising expenditures and divide it by the number of new acquisitions (orders or customers), that should give you a rough estimate of your cost per acquisition. Similarly, after running a PPC campaign for a month, you take the total advertising expenditures divided by the number of acquisitions. Of course, these raw numbers are not burdened by administrative costs, but they still provide an apples-versus-apples comparison.

I have managed PPC campaigns where the average cost-per-click was $0.40 and others where it was $5.00. The key question remains: how many clicks does it take to get an acquisition? If the cost for each click is $0.40 and it takes 200 clicks for an acquisition, then the acquisition cost is $80.00. If the cost for each click is $5.00 and it takes 10 clicks, the cost of the acquisition is $50.00.

FINDING THE GAPS

Two key points are crucial: (1) how much does it cost to get an Internet acquisition compared to traditional methods? and (2) what is the value of a new customer? In some businesses a new customer is worth $1,000, while in others, only $10. Typically, the cost-per-click reflects this value, but since the market is still very small, there are significant gaps. Remember the "debt consolidation" keyword phrase above? The difference between the first and last cost-per-click was about 30%. On the other hand, there is literally no difference between cost-per-click rates for the keyword "Xenical". From this you may conclude that there is a lot more competition for "Xenical" then there is for "debt consolidation". The opportunity is between the gaps in the 30% differential example.

The bidding market for keywords is still so new and untapped that it's rare to have more than three competitors fighting over a specific phrase. The gaps in keyword cost-per-click charges such as "debt consolidation" are the norm and represent tremendous opportunities still available in this media. Right now they are plentiful, and for those few people who take the time to understand this important marketing tool, the time to act is NOW!

About The Author

Neal Lebar has proven that Internet marketing can generate returns far greater than traditional media. For more information, visit www.innovate-inc.com or e-mail www.innovate-inc.com

personalized cleaning services Des Plaines ..

In The News:

LastPass faces $1.6 million fine from U.K. regulators after 2022 data breach exposed 1.6 million users. Password manager failed proper security controls.

Petco disclosed a data breach exposing customer Social Security numbers, financial account details, and driver's license information due to a software error.

Baseball teams can now analyze complete swing mechanics in normal training environments using Theia's markerless AI system that processes standard high-speed footage.

Smart home hacking fears overblown? Expert reveals real cybersecurity risks and simple protection tips to keep your connected devices safe from hackers.

MIT develops needle-free glucose monitor using light technology. Revolutionary device could replace painful finger pricks for diabetes management.

The ClickFix campaign disguises malware as legitimate Windows updates, using steganography to hide shellcode in PNG files and bypass security detection systems.

Researchers from Osaka Metropolitan University designed a 21-foot dome that combines aquaculture and hydroponics to create a self-sustaining urban food system.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

ChatGPT data breach exposes personal info of users through partner Mixpanel. OpenAI confirms names, emails compromised in security incident.

Android rolls out Emergency Live Video for 911 calls, letting dispatchers see real-time scenes during emergencies. Great for holiday travel safety.

Malicious Chrome and Edge extensions collected browsing history, keystrokes and personal data from millions of users before Google and Microsoft removed them.

Google's new Call Reason feature lets Android users mark calls as urgent before dialing, displaying an urgent label to recipients using Phone by Google app.

Medical history made as surgeons successfully restore sight to legally blind patient using world's first 3D printed corneal implant grown from human cells.

Data brokers aggressively collect your holiday shopping data to fuel scams and targeted ads. Learn how to delete your digital profile before 2025 starts.

Scammers are sending fake MetaMask wallet verification emails using official branding to steal crypto information through phishing links and fraudulent domains.

Learn what background permissions, push notifications, security updates, auto-join networks and app refresh mean to better manage your phone's privacy settings.

Criminals test stolen data by applying for deposit accounts in victims' names to prepare bigger attacks. Learn why banks won't share fraud details.

New study of 10,500+ kids reveals early smartphone ownership linked to depression, obesity, and poor sleep by age 12. Earlier phones mean higher risks.

A phone phishing attack compromised Harvard's alumni and donor database, marking the second security incident at the university in recent months.

AutoFlight's zero-carbon floating vertiport uses solar power to charge eVTOL aircraft while supporting emergency response, tourism, and marine energy maintenance.

A new phone return scam targets recent buyers with fake carrier calls. Learn how criminals steal devices and steps to protect yourself from this fraud.

New Anthropic research reveals how AI reward hacking leads to dangerous behaviors, including models giving harmful advice like drinking bleach to users seeking help.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

Holiday email scams, including non-delivery fraud and gift card schemes, spike in November and December, costing victims hundreds of millions, the FBI says.

Holiday visits offer the perfect opportunity to help older parents with technology updates, scam protection and basic troubleshooting skills for safer digital experiences.

Per Click - Do They Know Something We Dont?

Pay-Per-Click Advertising