Now, this price run-up in the short term may have dragged the 100's of purveyors of this product up in cpc for their kwds. BUT,(and it is a big BUT), paying $.50 - $1.00 per click for a 1-2% conversion rate is just not sustainable. (The profit margin on a single item is less than $75.00) My guess is that within the next 60 days, many of those who ramped up their min cpc (per google's insistence) are going to look at their google bill - compare it with actual sales - and drop way down.
The big guys like "Dull Computer" can afford this. The marginal distribution guys can not. It simply does not make business sense.
I do not sell these marginal product items, but rather a service relating to it. The horrific kwd cpc increases, have taken me out of the search results game. I am now dependent on content ads with very low conversion (or non-existent).
Does anybody else see this in their area? [That the prices asked do not make simple business sense.]
I have moved on to more profitable ad venues, but at a substantial hit to volume.
Perhaps the move worked out in Google's favor short term, but I have to think that long term, searchers will get bored of seeing the same auction site and the same 3 comparison shopping sites on every single search. By killing selection, Google killed the goose that lays the golden eggs, IMO.
With SEO, especially on Google, so damn shakey and unpredictable at the moment Adwords still provides a solid, entirely predictable source of customers for me. I know roughly how much I need to spend (considerable more than your CPC, lucky sod!) to get roughly the amount of visitors I want through.
PPC is just a nessessary evil, and one no matter how much we hate it sometimes we will all continue to use.
One can only hope that an increase in competition, even though the adCenter trial sounds like its rubbish at the moment, might force Google to offer a little more to its paying customers.
no matter how much we hate it sometimes we will all continue to use.
Not exactly true. We will only use it as long as it's profitable. As Google restricts prices from floating freely and continues to push minimum bids skyward, more and more of us will be dropping out...and many of the dropouts will be the type of businesses that the searcher really wants to find. This isn't simply an issue with prices going up with demand. This is a price control, and its ill effects are typical of what happens when you tinker with free markets.
Plus, people who are trying to run businesses don't like to see their ROI jumping all over the place day-to-day because a company is playing games with price controls. It's exhausting and eventually becomes more trouble than it's worth.
Plus, people who are trying to run businesses don't like to see their ROI jumping all over the place day-to-day because a company is playing games with price controls. It's exhausting and eventually becomes more trouble than it's worth.
Perhaps true of some industries. I see Adwords becoming far less useful to people who sell "things" but still being very useful to people who sell services, especially professional services.
Though to be fair to Google, they did all but invent this market. Conventional marketing evolved over centuries, Adwords is still pretty fresh. I have faith that things will come together eventually, more so now that we are starting to see some real competition.
Either way, in my industry its a kind of like it or lump it situation. Everyone else is doing this and if we fail to join them, we get left behind. Due to certain regulations that I wont bore you with, Adwords really is one of the only ways to go for a little freedom.
This is incorrect - Goto.com/Overture was way ahead of AdWords in terms of original PPC 'invention'.
In fact AdWords was CPM for a very long time before converting over to a PPC business model.
