LucidSW - 9:31 pm on Dec 15, 2009 (gmt 0)

trinorthlighting:
>> We worked very had on that the past two years and this year we have not spent one cent in advertising in this year Adwords.

Yeah, but how much have you spent on resources these last two years to achieve this? $50k? $100k? How much per click will it come out to in the next two years? This assumes no more spending on maintaining that position. So if you spend $50,000 to get 50,000 clicks in two years, that's $1 per click. If PPC costs $2 per click, that's a good thing. But if a click costs less than $1, your efforts were not cheaper.

Not saying not to do SEO, just that there is a cost and not everyone is able or gets to be number one or even in the top four.

Digmen:
>> I think that all people are paying far too much just for a click

It would be great if every click cost only a few cents. However, costs are based on the principles of supply and demand and what advertisers are ready and willing to pay for a lead.

It's no different in the offline world. Last summer I looked into selling an air filtering system. Part of the sales pitch is to get a prospect to fill out names of friends, family and neighbors for which the company pays $2 for each name. They pay $5 if the person agrees to a home demonstration. Let's say 7 names (they said that was average) which is $14 and two demos (again, about average) is $10 for a total of $24 for two leads or $12 each. I think that's a lot of money but that's the value to them. It's actually much higher when taking into account other incentives to demonstrators. So if they ever decide to do PPC, $2-3 per click will be peanuts to them and many other industries too like real estate and insurance.