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

same day cleaning service Des Plaines ..

In The News:

New Android banking trojan Sturnus steals credentials, reads encrypted messages and controls devices.

Denmark's 3D-printed student village proves automation builds 36 apartments faster than traditional methods. Skovsporet project shows housing future.

Discover Android's new Sound Notifications feature that alerts you to smoke alarms, doorbells, and baby cries even when wearing headphones.

New SantaStealer malware reportedly threatens holiday shoppers with password theft. This Christmas-themed info-stealer targets browsers and crypto wallets.

The Christmas season brings a surge in Netflix phishing scams targeting shoppers with fake emails. Stacey P received convincing scam but verified account first.

San Francisco Giants invite Jamie Grohsong to throw ceremonial first pitch at Oracle Park after he learned to play baseball with a bionic hand following an injury.

FBI warns cybercriminals are stealing family photos from social media to create fake proof of life images in virtual kidnapping scams targeting victims.

Instagram's new 'Your Algorithm' tool lets you control your Reels feed in real time. The app now gives you power to customize what videos you see.

Major Marquis fintech breach exposes 400,000-plus Americans' data through unpatched SonicWall vulnerability, with Texas hardest hit at 354,000 affected.

Free up iPhone storage fast by clearing large photos and videos from Messages app. Simple steps for iOS users to delete attachments without losing chats.

Scammers are flooding inboxes with fake tracking alerts that mimic real carriers, exploiting the holiday rush to steal logins and personal data.

The Fox News AI Newsletter brings you the latest news on AI technology advancements and the challenges and opportunities AI presents now and for the future.

Texas family reunites with missing 11-year-old cat Grayson after 103 days using Petco Love Lost's AI photo matching technology and community help.

Tired of AI customer service loops? These insider tricks help you escape "frustration AI" and get real human help when you need it most for urgent issues.

Unlock richer audio from your streaming apps with simple tweaks to volume normalization, equalizer settings, and quality preferences for cleaner sound.

Scammers are sending fake Facebook settlement payout emails that mimic legitimate notices from the privacy settlement administrator to deceive users.

Holiday shopping scams surge as fake refund emails target distracted consumers during Black Friday and holiday seasons, costing Americans billions annually.

The AI-powered IRMO M1 exoskeleton features four modes, including turbo, eco, training and rest for hiking, running, cycling and sports with eight-hour battery life.

OpenAI announced upgrades for its ChatGPT Images platform on Tuesday, saying the program can now make more precise edits and produce images more quickly.

Chrome for Android now turns web articles into AI-powered podcast conversations. Get hands-free browsing with Google Gemini's natural audio summaries.

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.

Per Click - Do They Know Something We Dont?

Pay-Per-Click Advertising