Competition and Click Costs

October 1, 2008 on 12:13 am | In Questions and Comments | 1 Comment

Tony,

I have launched a few campaigns on Google by direct linking (no website of my own) and have targeted high volume keywords similar to the approach in your book.  I have focused on programs that pay per lead for users signing up to a free online website.  They only require minimal user info (i.e. email address) and no credit card is required.

While I have driven decent traffic with a good conversion rate, I am having issues making a profit due to my high costs per click.  For my keywords, Google is requiring minimum CPCs of >$3 to get on the first page which makes it extremely difficult to drive traffic while keeping costs down, even with CTRs that are high.  When Google was using the old quality score measure with minimum CPCs, my quality score was “great” and my minimum CPC was 0.03.  If I use a maximum CPC of $1 then Google barely shows my ad even though my quality score is high.  With a lead payout of $4 and these high CPCs, I need a very high conversion rate to make any profit.

Is this issue due to the immense number of people competing for the same keyword traffic?  Do you have any suggestions to help reduce my CPC other than improving CTR through better ad copy?  Is your recent recommendation to create a website related to huge competition and a cost per click issue?  Would you recommend that we don’t bother with any programs that still allow direct linking and if so then what are your specific reasons?

If making a profit through direct linking no longer works even for programs that allow it then it would be great to know so I can move on to another approach.

Any help is appreciated.

Thanks,

T

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  1. T,

    You say that your CTR is high, but it is important to remember that even if your CTR is as high as 50%, it doesn’t mean that other ads for that keyword aren’t generating CTRs in the 70% range (and as hard as that is to believe, I have had a small number of ads perform THAT well).

    Here is what I suggest. Turn off your ad for that keyword, and when your ad for that affiliates domain name disappears, take a look at the ad that takes its place (for the same domain name) and pay close attention to their ad text. Chances are, their ad is outperforming yours by a wide margin.

    You don’t want to copy their ad (its history is deeper, so it is going to win any ties), but you can take what you think are the best elements from their ad and your ad, and create a new ad which is hopefully better.

    You may have to do this a number of times to get the results you want, but you will know when you are beating (or at least competing better against) the other ad when your minimum CPC drops down… preferably to single digits. You may still have a little trouble with volume if their ad still slightly outperforms yours, so if you see your costs drop dramatically, but your volume doesn’t rise quite as dramatically, you are probably VERY close, but will still have some more work to do.

    Let me know how it turns out!

    Tony

    Comment by Administrator — October 3, 2008 #

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