Tuesday, December 2, 2008

Pay Per Click Conundrum - Google the cash hole ?

By Trevor Weir

Every month some prognosticator predicts yet again the demise of Google. It seems like a repeat of when they used to say the same about apple. So, what good is it to say that Pay Per Click advertising on Google is dead.

Google accountants, who cheer in glee, as Google revenue continues its relentless climb would not even dignify this with a response. And Yang over at Yahoo, who knows who is eating into his ad share revenue would glumly agree. Google's Adword advertising model is absolutely roaring along.

What is great for Google is always great for its customers too, right? Usually it is, but it's not the customers feeling the pinch here, its the advertisers like you and me. Google's adword system is based on a set of "highest bidder" algorithms.

For those not familiar with how this works, imagine that you typically waste your Saturday afternoons at the local car auctions hoping to pick up a great car for cheap. You know that the fewer people bidding is the better your chance of snaking a prime 4 year old vehicle for a few thousand dollars. On the last bidding day of the season, 10 busloads of rich gamblers stop by to use the bathroom.

And who was this good for? The auctioneers or the public attempting to steal a good car cheaply? If you answered the auctioneers, you are absolutely right.

So a couple hundred heavy pocketed corporate types on their way to the casino, who find themselves coming out of the bathroom and seeing good cars go cheaply might want to wallow in and join the bidding. Well, thats exactly what deep pocketed corporate has done.

So, perhaps the rumors of the death of Pay Per Click were justified? Google has already said that mom and pop bidders are the most careful and get the highest returns and best ROI.

Deep pocketed bidders without a sense of ROI can bid certain keywords to near unreasonable prices.

Would you pay 9 dollars for the keyword phrase Internet marketing? Most of us would say this is a little pricey. A hundred clicks later, and you are almost at a thousand dollars. With a 3% conversion rate, you would need to be selling a product for 600 dollars at 50% margin just to get close to break even.

Not funny right? But this scenario is being played out all over the pay per click world all day long.

You are not alone. A couple of guys just like you, started experimenting on a "fix" for this some months back. They went back to basics and ran over to the Yahoo network. They were having so much fun "fixing" that they forgot to stop and tell the rest of us - until they had amassed nearly half million in verifiable clickbank sales. Ok, I wont keep you in suspense, click on the Yahoo cash machine here. It's not quite what you may have been thinking, but watch the video. - 16463

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