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PPC prices creeping up

Posted by Michael Bloch in web marketing (Friday February 9, 2007 )

After a 16.5% increase in the third quarter last year, the average keyword price paid by pay per click advertisers rose just 2% percent in the fourth quarter of 2006 to $1.51. Just $1.51 huh? Youch.

Fathom Online said the huge rise in the third quarter was quite normal, given the shopping season around the corner. As the shopping season slows down a couple of weeks into December, so does competition for keywords and consequently the bidding wars cool down somewhat.

How high will average keyword prices go? I hate to think. I expect “youch” is what most small online business owners would say to even a dollar fifty, depending on their sector. There’s not too many little guys who are able to pay a couple of bucks a click given that it can sometimes take many clicks to translate to a sale.

One of the problems is very similar to the bricks and mortar retail sector – the bigger bidders are prepared to settle for a smaller margin, just to secure the sale and to squeeze out competitors. While PPC was the bastion of the entrepreneur and pure online business for quite some time; the mega-corps have woken up to the power of the web in the last couple of years and have hit it with wallets loaded and fully armed with all sorts of whizz-bang tools and PPC experts.

PPC in a highly competitive, low margin industry is certainly not for the faint-hearted and to be quite honest, I steer pretty much clear of it these days. I prefer margin to volume, although when you get a combination of the two, it’s very sweet indeed.

If you are venturing into Pay-Per-Click, make sure you do your homework and avail yourself to the many tools available from providers so you can maximize your investment – and then also add your own; such as your own click tracking software.

If the world of PPC is too much for you and you need some other ideas, this post may offer you some tips that can provide better bang for your buck and don’t forget, optimizing for organic search results can be very rewarding.

Related:

PPC – A beginners guide
PPC advertising – minimizing the cost
PPC fraud – detection and prevention strategies
Creating effective landing pages
Text Link Ads – to buy or not to buy?



 

 
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