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Anyone abandoning PPC Yet?
Article from CNet

 6:50 pm on Jan 13, 2004 (gmt 0)

I'm very wary of anything other than overture/google.



 7:00 pm on Jan 13, 2004 (gmt 0)

Yes. I have stopped using Adwords because of too little ROI and I am in the process of taking off my Adsense ads. The % of clicks on Adsense ads has dropped by only .2% but the payout has dropped 75%.


 7:19 pm on Jan 13, 2004 (gmt 0)

It seems that ad click traffic is continuing to grow, but fewer visitors are clicking through to either take some kind of meaningful action or actually transact business. In other words, clicks are increasing, but conversion percentages are declining.

Really? And how does the author know this?

Someone should tell this guy that Content Matching is optional on both Overture and Adwords.


 7:26 pm on Jan 13, 2004 (gmt 0)

I loved how he tries to create some buzz with his Storm 3 example.... Didn't even ask either Overture or Google for their comments...

It comes down to measuring ROAS at the keyword level. Our clients saw seasonal records during the Christmas crunch weeks, many with ROAS at 700% of spend or better!


 8:10 pm on Jan 13, 2004 (gmt 0)

He didn't really say anything new. We already know that if there is fraud and abuse of the system then it could fail. And, depending on who you talk to you will hear that it works and doesn't work. I just see it as if he didn't write something he wouldn't get published.



 7:48 pm on Jan 14, 2004 (gmt 0)

In the last few months we've had Florida, Broad Match, and Adsense. No doubt without proper management these could make many campaigns look very weak.


 7:59 pm on Jan 14, 2004 (gmt 0)

No way. If anything, we're moving more of our offline ad budget to PPC and IYPs. Our PPC ROI for last year was higher than traditional marketing. I think that as PPC becomes more well known, a lot of businesses think their offline media people (or the business owner/employees) can run the campaigns without understanding the complexity involved and ruin their ROI, which makes them think it's not a good investment rather than looking for ways to increase their conversion rates.


 8:05 pm on Jan 14, 2004 (gmt 0)


I think it has a lot less to do with that than the space that one is in. When it comes to marketing and ads, one size does not fit all.


 8:17 pm on Jan 14, 2004 (gmt 0)

Agreed one size does not fit all - however, I've not seen a properly managed online campaign not be profitable.

Online campaigns do come in many shapes, and PPC is just one of those. There are some companies that won't gain by PPC (i.e. Coke - why pay per click when they are a branding based company and would do better with banner ads).

There are many companies who could gain with PPC who don't properly take advantage of how the system works - and yet blame the system as being unprofitable instead of understanding how to properly run such a campaign - which in turn creates negative articles about PPC failure when it's their company that failed in the campaign, not vice versa.


 8:24 pm on Jan 14, 2004 (gmt 0)

I don't do PPC, but Adsense buys me lunch every day.


 8:28 pm on Jan 14, 2004 (gmt 0)


Here is an example…

Business plan calls for Widget Company to product cheapest widgets possible. Very little profit margin for each widget. In turn, this opens up world markets to compete in due to currency exchanges and labor costs and sales are based on volume. In the same space and for the same 2 KWs, are Fortune 25 companies, and highly profitable companies selling training to the Fortune 1000. So bids are high. Too high without the widget company rising their prices, thus defeating their business plan. Has nothing to do with managing a campaign.

<edit> typo </edit>
<edit> more typos </edit>

[edited by: jim_w at 8:35 pm (utc) on Jan. 14, 2004]


 8:28 pm on Jan 14, 2004 (gmt 0)

A totally fact-free article, completely based on the author's assertion that IT SEEMS THAT traffic is rising while conversions are declining. Maybe, maybe not, maybe just for some people.

I'm not necessarily saying the author is wrong (although the "Perfect Storm" analogy is clearly an exaggeration). But the article is what Donald Rumsfeld would call a "thumbsucker".


 8:37 pm on Jan 14, 2004 (gmt 0)


In that type of business, I'd agree you are correct. On average you need to be able to convert 2% of 0.05$/clicks (might not get a lot in the last position - but you can still be profitable), and have a profit margin of $3/sale, and be able to make enough sales to cover the salary of whoever is managing your campaign and overhead costs, to be able to run a successful PPC campaign.

If a company can't meet that profit/sale - or the minimum sales/month - then you're completely correct that they can't run a successful PPC campaign. If they can meet those criteria, then with effective management of bids and quality ads - they can run a successful campaign.


 8:44 pm on Jan 14, 2004 (gmt 0)

>>SEEMS THAT traffic is rising while conversions are declining.<<

That was the other thing that happen to us, while we sell one product, with another in development, most clicks were people just looking for information on 'how to' without paying lots-‘o’- dollars to training companies. And we do have about 60 pages of information to teach our potential future customers.

We were serving up Adsense to compensate for these people, but G stoped serving ads to us that made it worth our time to run them. So we have taken off 50% of them and will get the rest off by Monday. We have replaced Adsense with something we can atleast break even with.


 9:32 pm on Jan 14, 2004 (gmt 0)

Isn't this making an issue out of nothing.The article is not substantiated by any data.The claims are "trend claims" which are quite obvious ones given the rising popularity of PPC SEs.Lets take a piece of data that shows whether there is cause for concern or not... the CPA.

I am doing fine on that.


 11:12 pm on Jan 19, 2004 (gmt 0)

Wow, fairly negative reaction here, to this article, which I actually found to be interesting. Unfortunately I cannot
corroborate nor dispute his position from my own PPC efforts as my shopping cart does not support an ROI measurement tool, but I don't think I would brush off his comments as totally out of line. Same type thing happened with banner advertising back in '99.


 11:20 pm on Jan 19, 2004 (gmt 0)

Banner advertising and PPC advertising are two completely seperate worlds.

Clicks from Banner ads, are what we term as "accidental traffic".. The user clicked on "spur of the moment interest". The banner ad presented a Call To Action, that generated enough interest to generate the click through.


 12:51 am on Jan 20, 2004 (gmt 0)

>Banner advertising and PPC advertising are two completely seperate worlds, etc<

I agree, except for this observation: banner ads were first, and they were seen at the time as a "Great thing" -- all those eyeballsin the early days of ecommerce on the web, looking at your ad, etc, and maybe clicking through. Like having a billboard on the Interstate Highway, advertising your product.

Very different from PPC. But they went bust, around '99, along with many dotcoms counting on them, when consumers grew used to them, and no longer clicked through.

PPC was not even "invented" until around '99 and then in a very small way with the original (what the heck was their name? Direct Hit? which was one of the first to sell cost per click based on a link; and they sold to OV? I think around '99).

But, have to say, PPC has lasted quite some time. Maybe it is coming of age now. PPC grew slowly but it may now be "of age," in Internet terms -- frankly -- a ripe old age. So maybe now it is overused, (or more correctly overabused) and subject to much fraudulent clicking by competitors, or those who "sub-lease" (if that is a good term) from OV and AdWords, FindWhat and etc. and want $ from their affiliate status, so they manufacture clicks on their affiliate sites.

To sum up: I think the author of that article has some legitimate points. But those who are wise enough, and/or fortunate enough to be able to measure ROI will be able to tell us if he has judged correctly and predicted correctly. Unfortunately I cannot, as i cannot measure ROI, but I read all the posts (or most here) that talk about it and report on it. So far PPC still returns ROI --- especially AdWords and OV. The rest (Find What and Ah-Ha, and etc) can be argued about, and are argued here in various posts all the time. But the one common theme seems to be that Google Adwords and OV do return decent ROI.


 4:45 am on Jan 20, 2004 (gmt 0)

There definitely are problems with the way PPC is going. I won't go near content advertising because about half of the sites I see with Adwords on them are pathetic or auto generated. And now, some dumb search engine call Search Sc**** pops under my main screen whenever I do a search serving up OT results. Is this a search engine or content.

While there may be no data in his article, I think his point is valid. On the positive side, it does help us Search Engine Marketing consultants who understand that you don't want content matching for many terms.


 5:08 am on Jan 20, 2004 (gmt 0)


I'm not sure where you got your history lesson, but DirectHit was not the first PPC engine, nor do I remember them resembling any form of PPC engine.

They were a background system that rated site popularity, feeding off of click through data from portal/search partners such as MSN.

Here's an article written by Brett in '99 about their technology.. www.searchengineworld.com/engine/directhit.htm

And it was AskJeeves that bought DH, not Overture.

Overture is the original, launched in April, 1998 as Goto.com by IdeaLab...

Advertisers could buy banners for specific keywords as early as '99, and that still didn't result in positive ROI for advertisers in the majority of buys. Comparing banners to sponsored text ads, is apples to oranges. If it looks, smells, and tastes like an Advertisement, it can't be anything else. That is why Consumers got turned off by banners, and embraced textual sponsored links (Even if they didn't understand they were advertisements... :)

The article simply lacked any relevant data. There is a reason that GAW and Overture are as popular as they are, they show positive ROI, in many vertical markets. Now, with web analytics advancing to provide ROAS measurement at the keyword level, PPC engines should be even more profitable for advertisers.


 5:46 pm on Jan 20, 2004 (gmt 0)

Off topic but a clarification.

Overture is the original, launched in April, 1998 as Goto.com by IdeaLab...

Advertisers could buy banners for specific keywords as early as '99

I know the programmer who wrote the code to do this for Lycos when he worked for them around 95 or early 96 :-)

Back to original show already in progress....



 5:15 am on Jan 21, 2004 (gmt 0)

Has anyone compared adwords and overture ROI performance lately for same keywords and copy matter?
Adwords have been consistently performing for me with about 80%ROI while overture has gone down in performance.

Any comments-observations?


 1:41 am on Feb 4, 2004 (gmt 0)

The link to the article in question here (in the first post of this thread) seems not to outdated.

Can someone point me to the article?

Thanks much.


 5:31 am on Feb 4, 2004 (gmt 0)

Somewhat OT, but in defense of WebStart, I think there was a PPC before GoTo, or at least it was more popular early on than GoTo was.

It was widely criticized for bids being invisible to the user, i.e. you could "pay your way to the top." And it fell out of favor in a hurry because of that.

As I recall, what GoTo did differently was make the bids visible (at least on GoTo). This was before GoTo results were served bigtime on other engines, so you really only saw GoTo serps on GoTo (with bids), and thus it was seen as a more open, honest system.

Ironically, OV results served elsewhere, as they are now, is pretty much the same model that this particular PPC was criticized to the point of its death for. Sorry, I cannot think of the name of the SE, but it was a big deal at the time.


 11:13 pm on Feb 4, 2004 (gmt 0)

Thanks for the defense. Direct Hit did have a PPC model. It was not widely used, it was in the days when banner advertising was seeing its initial demise. About the same time I think msn.com's search function picked up a PPC capability, maybe it was the same one serving Direct Hit. I used both, as I recall (though memory fades with time), and one of them sold out to GoTo and my existing account dollars were transferred to GoTo (later OV). I continued using GoTo, and still do, but I do have problems with it and others re: fraudlent clicks. Most recently on FW. The FW case was so obviously bogus as to be ridiculous: a 2000% jump in one day on one term. FW did refund my money. But a more clever competitor I think can bogus click your site and get away with it.


 12:00 am on Feb 5, 2004 (gmt 0)

When you get people saying search volume is going up, that clearly is true, it's probably double from last December to the one before.

Fact. Broadband is gaining in popularity, so more search can be done as a casual thing, no more powering up, logging on etc..

There will come a tipping point where PPC will become just one of the gang with other traditional marketing distribution channels, indeed we always talk to companies about the integration rather than the separation.

It may be that positive ROI erodes over time as awareness of PPC increases, but that's when the skill of marketers in turning lookers into bookers becomes critical.

PPC will always be a much more cost effective route to market, and when local search makes it into mainstream PPC it will open up the high street to companies that would not want to advertise nationally, so avoid PPC.

Content matching is one of those tough calls, if your not getting many clicks but lots of impressions, surely that's cost effective brand awareness? Now that Overture have introduced seperate bidding prices for content match, it's worth a look if nothing else.

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