Does this mean that some of the big boys are actually looking at their ROI.
Can't wait for my competitors to catch on
(edited to preserve clarity after post split - 4Eyes)
[edited by: 4eyes at 8:13 pm (utc) on Aug. 23, 2002]
What happens is all the main players bunch together, occasionally someone goes rushing off the front and can't sustain it and the pack swallows them up.
Ocasionally a breakaway happens and someone steals the race.
We've just had a breakaway win for one of our clients.
We've delivered 800 visitors to their site and over £2000 in profit on 4 keywords and we never paid more than 9p for a visitor. This has been in the last 7 days.
So in the Tour De france analogy we struck for home, everyone else was watching everyone else and didn't see us go........
As the guy in the A team used to say.... I love it when a plan comes together!
You will find that periodically the bidding redreses itself and then people will get sucked into spiral bidding wars on the competitive keywords, but often they are competitive because they are trying to outdo each other and if you get 3 or 4 in competition, whoa, I'll stay out of those wars.
Most of the big boys wouldn't know ROI from a hole in the ground, if they did they wouldn't be bidding the money that they bid. A lot of them lock into the prices because they think that "customer loyalty" that they get offline will be the same online, but the end user is a fickle being and won't just buy from you, so the lifteime value of a customer is distorted, so bidding $5 for a product that only costs $3 because of the long term value of the client is madness.
I have a customer who is a leading player in his chosen market.
His prices are on the nail, and he knows he is getting the same price from the manufacturers as the competition.
When we looked at the bids on Overture UK and Espotting, he was shocked.
Some of the bids will definitely be making a loss, even if they have a 25% visitor conversion.
In his case, it seems like a few of his competitors got in a futile bidding war for the prestige of getting No.1 slot. They are not even targeting the hundreds of highly lucrative minimum bid phrases - just slugging it out for the big headline ones.
Perhaps the highly competitive areas are getting smarter,but I think the UK is still wide open in some markets, with participants just not 'getting' the correct strategy yet.
You can pick up so many visitors for minimum cost because the search terms are popular but not hammered.
One of the question we ask prospective clients already running PPC campaigns in the UK is how many keywords they are bidding on. The average number is less than 20 keywords, and they update their bids less than once a day.
Aside from the obvious saving of time, the keyword pool we build for them is usually 10 times as large, most of the bids are less than say 25p.
I'd be interested to know the effect Espottings new editorial ruling will have on the UK PPC market. Having to have the keyword in the title and a deep link will prove troublesome for many advertisers, but at least they had the sense to grandfather all exisiting ads.
I also submitted another 10 keywords most of which did not appear in the title and all of them were excepted ! Think I will continue as I was untill they start blocking them.
On keywords that are specific, with deep linking and the keyword in the title, conversion rates are really high for most of our client campaigns, so we are tending to move to that as a technique anyway.
I don't like the fact that it's mandated though. Surely, if it's my clients money they can chose to spend it promoting the message they want as long as it fits the category criteria can't they ?
There doesn't seem to be the same rules laid down for media owners and it's fast becoming a double standards issue.
We have enough evidence to indicate that the delivery method employed by some of Espottings advertising affiliates is not true search, but is being manufactured to boost their own income. It's tainting the impact that PPC should be having and I feel very sorry for the victims in this case, namely the poor unsuspecting advertisers.
