Home
>
Pay-Per-Click Advertising
>
Secret Reasons Why Some Businesses Can Afford to Bid Ridiculous, Amounts On Pay-Per-Click Keywords

Secret Reasons Why Some Businesses Can Afford to Bid Ridiculous, Amounts On Pay-Per-Click Keywords

The other day I was talking to one of my consulting clients on the phone about the return on investment from his Google Adwords campaign. And, he asked me a question that I get several times a week from clients and other online marketers.

His question was?

"Eric, how on earth can my competitors afford to bid over $4 per click for the number one position on the top keywords for my niche?! I can't make a profit on those keywords at just $2.00 per click!"

His concern is a common one among businesses that use pay-per-click advertising to generate traffic. It seems that the top positions in most competitive markets are reserved for businesses with more money than sense.

I explained to him that short term his best strategy is to just cast a broader net with his keywords by expanding his keyword list to include thousands of less competitive, yet still targeted phrases, by using tools like WordTracker or Ad Word Analyzer.

However, to remain competitive long term he needs to address the real reason that his competition can afford to bid $4 per click and still make a profit?

There are only 4 reasons that another business can bid higher than you on pay-per-click ads.

They have very deep pockets and very dumb marketing managers. You usually find this in businesses that are used to blowing their offline marketing budget on unaccountable "image advertising". While there are a few like this in every market, these are not the ones you need to be concerned with. The dangerous competitors are the next two?

They earn more profit from each sale than you. If you are making a $10 profit selling an ebook, yet your competition is earning a $100 profit selling a set of DVDs and a printed manual, then (all else being equal) your competition should be able to afford to bid 10 times what you can per click.

For example:

Site "A" is making a profit of $10 per sale and converts 1 out of every 100 visitors. This site can afford to bid only $0.10 per click to just break even.

Site "B" is making a profit of $100 per sale. If they also convert 1 out of 100 visitors, then this site can afford to bid $1.00 per click to break even. (Better yet, they can bid $0.50 per click and earn a 100% return on investment!)

They are making their real money on the "back end". It is not uncommon for savvy marketers to sell a lower ticket item up front, and only break even or sometimes even take a loss, when they know that they can then upsell a good percentage of those customers on a higher ticket item later. Using pay-per-click advertising as a lead generation or list building method for future follow up is actually one of the most effective uses for this method of marketing.

They convert more of their traffic into buyers than you do. Even if you are both selling the exact same item at the exact same price, if your competition converts 5% of their traffic into sales and you only convert 1%? Well, it's no wonder that they can afford a $5 bid on "blue widget" when you are loosing money bidding $1.25.

You can get a pretty good idea who has the best converting website in any given market by watching the Google Adwords listings in that particular keyword niche for a few weeks. Unless they are one of those "more dollars than brains" marketers, the sites that constantly stay near the top long term are the ones that are generating the highest value per visitor.

The only way to compete long term on the super expensive keywords is to maintain a continuous focus on improving both conversion rates and average profit per sale.

Want to improve your conversion rates? Eric Graham is the CEO of several successful online companies. Internationally recognized as a top authority on eCommerce, Website Conversion & Internet Marketing, he's an in-demand speaker & consultant.

Visit http://www.web-site-evaluations.com today for an in-depth evaluation to boost YOUR websites conversion rate!

Get expert tips, advice, news and commentary on improving conversion rates, split testing, web usability, copywriting, internet marketing and more. Just visit Eric's popular Blog: http://www.web-site-evaluations.com

Ford Excursion rentals Bolingbrook ..

In The News:

Artificial intelligence has made social engineering scams more sophisticated. They are scams by which criminals exploit trust for money or information.

Quadroin AUV is an underwater research robot that mimics penguins' graceful and swift swimming, descending to depths of 492 feet at speeds up to 11.5 mph.

Will fake movie trailers made with AI become real enough to take over Hollywood? Kurt “CyberGuy" Knutsson discusses more about spotting AI movie trailers and how they work.

Kurt “CyberGuy" Knutsson discusses how Triton Submarines redefines the underwater experience with the Triton 660/9 AVA, which offers panoramic views and unparalleled ocean access.

If your Facebook account has been hacked and you're having trouble logging back in, Kurt “CyberGuy" Knutsson shows you some steps to recover your account.

Kurt “CyberGuy" Knutsson reveals how the Aloha Unleashed project showcases a dual-arm robot system that autonomously performs tasks, demonstrating remarkable precision in robotics.

Air Force Secretary Frank Kendall boarded the cockpit of an F-16 controlled by artificial intelligence on Friday, before the plane entered a dogfight with a human-controlled plane.

Using a virtual private network to seach the internet has its pros and cons. It can provide more security and privacy. But users can be blocked from websites.

Dragon 12 is an underwater kite manufactured by Swedish company Minesto that promises to generate clean electricity deep under the sea.

The Federal Communications Commission slapped the nation's four biggest mobile carriers with fines totaling $200 million for unauthorized sharing of customer location information.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

The fully electric Atlas 2.0 robot was designed for real-world applications, and it is capable of lifting and maneuvering heavy, irregular objects.

Rather than spending time searching for the right buttons, here are a variety of keyboard shortcuts to make your workflow easier, faster and with less clutter.

High tech video cameras seem to find their way into the hands of Peeping Toms in hotels, dressing rooms and rental properties. Here's how to keep yourself safe.

If you consider Facebook's "People You May Know" section distracting, there's a way to temporarily remove it. There is no permanent way to eliminated it.

ChatGPT is an industry game-changer — here are a few simple prompts that can easily come in handy as personal and professional life hacks.

IPhones have several voice assist options available — like Siri and VoiceOver — that can help users search the web and read articles by voice.

The X1 exoskeleton is a motorized artificial intelligence-powered all-terrain device that straps to your waist and thighs for hiking climbing and running.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Hackers and scammers portray themselves as legitimate businesses or people with urgent propositions to entice victims to open compromising documents.

A decommissioned Boeing 737 that operated in Indonesia is now a luxurious private villa about 492 feet above the sea in Bali.

If you can't log in to your email account, you might want to try one of these methods to get yourself back in. Kurt “CyberGuy" Knutsson shows you how.

Kurt “CyberGuy" Knutsson introduces you to HERO-BLUE, a biomimetic, multimodal locomotion robot poised to transform underwater exploration and maintenance.

Kurt “CyberGuy" Knutsson reveals how the "Yahoo Boys" scam utilizes deepfake and face-swapping technology to trick people who believe they are in a romantic relationship.

Kurt “CyberGuy" Knutsson: Video shows Tesla Semi can navigate icy conditions, potentially offering a sustainable, all-weather, heavy-duty transport solution amid emissions concerns.

Secret Reasons Why Some Businesses Can Afford to Bid Ridiculous, Amounts On Pay-Per-Click Keywords

Pay-Per-Click Advertising