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

apartment cleaning near Arlington Heights ...

In The News:

Americans average 10-plus hours online daily, according to recent survey, splitting time between streaming shows on TV and browsing websites on multiple devices.

Boost your smartphone privacy instantly with these security tweaks for iPhone and Android that limit ad tracking, hide notifications and prevent unauthorized access.

Platforms like Hoax Tech and JS Click Cloaker help cybercriminals bypass detection systems using machine learning to selectively display scam content to victims.

A new battery recycling technique transforms old lithium-ion batteries into high-performance components that retain 88% capacity after 500 cycles with minimal waste.

Google's Android operating system can warn users about earthquakes before the shaking even begins – and there are ways to do it on your iPhone, too.

Meta's new gesture control wristband might just be the most seamless way to control a computer yet. And no, it doesn't require surgery, a camera, or even a touchscreen. All it needs is your wrist.

Long-haul trucks are now being upgraded with a surprising twist, thanks to California-based startup Revoy. Their electric boost doesn't replace diesel but works alongside it to cut emissions and fuel costs without major disruption.

PayPal and Venmo just rolled out something big: AI-powered scam alerts for Friends and Family payments.

As data centers multiply across the United States, energy demand is increasing at a rapid pace. This has not escaped the notice of large investment firms from Wall Street.

The Unicode Consortium, the nonprofit organization that maintains the Unicode Standard to ensure emojis work across devices, has announced Unicode 17.0, which includes nine new emojis slated for release this fall, in September 2025.

OpenAI is one of the world's leading AI research labs. Founded in 2015, it's behind some of today's most talked-about tools, including GPT, DALL·E, and ChatGPT.

Ever catch your dog staring at the screen during movie night and wonder if they're actually watching? Turns out, they might be. A new scientific study from Auburn University found that many dogs really do engage with television, and not all pups react the same way.

Stop the scammers from making contact in the first place. They're getting your parents' contact information and much more personal data besides, from somewhere.

The Walker S2 robot from UBTech autonomously exchanges its batteries in just three minutes, allowing continuous operation in car factories operated by BYD, Nio and Zeekr.

The FX Super One electric MPV from Faraday Future offers flexible seating, zero-gravity recliners and an AI system that creates a personal connection between driver and vehicle.

Practical solutions for reducing unwanted charity mail, political texts and email spam by opting out of shared lists, replying "STOP" and using data removal services.

Delta's new AI pricing system eliminates static airfares for personalized rates based on individual data, raising questions about fairness while promising optimized revenue.

AI data centers are straining the power grid across 13 states, contributing to a $9 billion increase in electricity costs, and PJM customers face monthly bill increases of $25 or more.

Artificial intelligence is transforming the music industry as AI-generated bands like The Velvet Sundown earn substantial streaming revenue, prompting lawsuits from major record labels.

Microsoft phishing scams use fake security alerts and links that redirect to credential-stealing pages with warning signs, including urgent language and unusual senders.

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

Tesla vehicles manufactured since mid-2021 with AMD Ryzen processors can now access Grok 4, xAI's witty conversational assistant designed to make drives more engaging.

Understand how technology affects mental health through five concepts, including blue light exposure, screen time management and algorithmic bias.

Electric vehicle maker Lucid adds hands-free driving through an over-the-air update for Air sedan owners with the DreamDrive Pro package and Gravity SUV support coming later.

Protect your home network from hidden dangers, including router vulnerabilities, ISP tracking and smart device weaknesses with proper encryption, firmware updates and VPN technology.

Per Click - Do They Know Something We Dont?

Pay-Per-Click Advertising