The margins for guaranteed clicks varies widely with each guaranteed click provider. There are some companies who are spending upto 50% of the guaranteed click cost on the actual bidding. In many cases, this is enough for local businesses to receive some quality tier 1 traffic. For these companies, often the margins are very slim, the budget control systems very advanced, and the quality is directly related to PPC analyst setting up the account.
In other cases, the companies in question are spending less than 25% of the click price on the actual bid. This can lead to positions on tier 1 providers which never receive an impression, and the budgets must be rolled into tier 2 or 3 inventory.
When talking about guaranteed clicks, there's a few things to keep in mind:
1. What % of the price is being spent on the click?
2. Is tier 1 or tier 2 (or 3) being utilized.
3. Who writes the ad? (analyst, junior analyst, business owner, telemarketer).
4. How does the company 'roll over' the budgets if tier 1 inventory isn't available. (other tier 1 packages, tier 2-3, company owned tier 2-3).
5. How many keywords are being utilized?
6. How are these keywords being created (site spidered, hand generated by analyst, industry keyword mapping, etc).
7. What reports can the purchaser see? (clicks & impressions account wide, clicks only, keyword lvl data)
8. Who handles support (call center, analyst, email only)
When guaranteed clicks are actually useful:
1. Click provider starts with all tier 1 properties, and attempts to fill on these properties.
2. Click provider doesn't own or have behind the scenes agreements with a tier 3 provider.
3. Low - semi competive online industry.
4. Local businesses in low - semi competive geographies
5. Professional writing the ad
6. Low budgets (many small businesses only want to spend $50-$300 in ppc - many agencies fees are higher than this - if the guaranteed click package is spending 50% of the budget on clicks - then they can be quality clicks if the above criteria is met).
When to stay away from guaranteed clicks:
1. If your average keyword is $5 or more for top position.
2. When the provider owns their own network.
3. As soon as you say the word 'finance or the 3Ps (pills, poker, porn).
4. When you want to talk to an alayst on a regular basis.
5. If your budget is more than $500-$1000 per month.
Guaranteed clicks is yet another form of advertising. All forms have positive and negative aspects. It's the matter of enhancing the positives and controlling the negatives which matter the most. This is possible in some guaranteed click packages, it's a matter of goals, competion, budgetary concerns, and level of expertise.
As with everything you buy, determine what you want for your money, and make an informed determination if you feel your money will be well spent before you write a check.