|Guaranteed Click vs. Traditional PPC Models|
The catch 22 in selling the mom-and-pop marketplace
| 6:54 pm on Jun 23, 2005 (gmt 0)|
In a ClickZ article [clickz.com], Chicago discusses the issues surrounding the proliferation of guaranteed clicks model versus the traditional PPC model when selling to the low spend SME base.
While it is very easy to jump to the conclusion that guaranteed click packages are inherently flawed, one can't dismiss the appeal of their simplicity and ease of understanding by the mom-and-pop local merchant.
Therein lies the catch 22. Guaranteed click model allows you to sell to the SME base in mass with ease. This is essential given the margins necessary to make it profitable for the large reseller. Yet we all know the guaranteed click model is far from the best option in purchasing PPC.
I'm curious hear thoughts on this subject.
| 12:08 am on Jun 24, 2005 (gmt 0)|
The Guaranteed Click model is not a topic that has been discussed at depth at WebmasterWorld.
This will not be the case for long ~ because two worlds are colliding and the two parties involved barely notice it right now.
Two months ago I got back from the Kelsey Conference on Local Search. This is the preeminent conference on all things local, interactive, and directional. Jake and I (bakedjake) sat on a panel together at Kelsey, as we did again at WebmasterWorld this week. At Kelsey, however, we were one of only a handful of pure SEOs around. We were one of only a few WebmasterWorld people around.
Instead it was an establishment of New-Venture-Backed Local-Search or Old-Directional-Media-Now-Local-Seach Providers.
You can not draw a deeper contrast between this group and the WebmasterWorld audiences. The irony is both groups are after the same things. But we are currently going about it in very different ways.
The market is plentiful now. But as time goes on, the consolidation of customer marketing dollars through traditional service providers will become an invariable obstacle for most. The chosen search marketing model of these traditional service providers right now is guaranteed clicks.
Organic providers will continue to make their living from quality and service and cutting edge knowledge. The traditional providers will continue to do it in a mass replicating and simplistic model while trying to maximize revenue and (finally) customer value.
The guaranteed clicks model is being sold by the tens of thousands in 2004. Get ready, because next will SEO. (And dare I say even standards). A new wave of mass SEO products is comin’ along with web site building solutions that will be fed into SE.
The Monied are trying to understand us. Our space. They are after the marketplace.
They look different and act different. And they sell $2 guaranteed clicks.
| 10:41 pm on Jun 25, 2005 (gmt 0)|
It does not seem like the guaranteed clicks model is very quality product, yet some of the major web development firms are selling a large number of the packages becasue the margins they get are so high. What ever happend to making a little profit and ensuring the client gets the highest quality traffic they can from online ad dollars. If businesses don't get more educated with exactly what they are getting and someone doesnt step in the space with a quality scalable platform, then business will keep buying the "bucket of clicks" or guaranteed clicks.
| 11:15 pm on Jun 25, 2005 (gmt 0)|
|"Well, you're getting the clicks." |
Maybe seeing your ad on the Internet is magic after all.
Seeing your own ad appear almost anywhere you consider worth having it appear probably is a bit of a magical moment for many, if not most small businesses. Getting around the "if you don't see it, is it really there" issue pops up pretty easily.
It seems to me that having a website visitor, or an email or phone call come in that is easily tied to that ad is the issue.
"Easily tied" doesn't mean "easily tied" in the mind of some web promoter or advertising media, it means in the mind of the small business owner.
When we're talking about guaranteed clicks, I sure hope we're talking about qualified clicks.
| 9:33 pm on Jul 2, 2005 (gmt 0)|
I work in the local space, doing organic seo and traditional ppc that I set up myself. I am very "hands on" with my small business clients.
I could use a primer on how these guaranteed clicks packages work. It's my understanding that if company X offers $2 clicks guaranteed, it is basically averaging out the ups and downs of the costs, and taking their own cut. In other words, they are betting that they will have more customers whose click really should only cost $1, let's say, than customers who cost $3. Is that about it?
Or is there more going on? Either way, it seems the ultimate loser here is the customer -- I can't see any quality control here, which is crucial to PPC.
| 1:47 pm on Jul 3, 2005 (gmt 0)|
|yet some of the major web development firms are selling a large number of the packages becasue the margins they get are so high. |
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.
| 6:49 pm on Jul 5, 2005 (gmt 0)|
Sounds like your a man with experience, eWhisper:) Thanks for the first hand insight.
| 2:48 pm on Jul 7, 2005 (gmt 0)|
Just have to know how each form of marketing on the web works to make informed decisions on which direction various endeavors should take.