Pay Per Click Conundrum – Google Got Your Cash ?

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 why would anyone make a statement like this : Pay per click Advertising in Google is Dead!

In truth, nothing could be further from the truth. Pay per click advertising with Google Adwords is roaring ahead, much to the chagrin of Ask, Bing and the number 2 giant Yahoo. So, if this is truly the case, why how could there be any truth in this unsubstantiated rumor?

What’s good for the goose isn’t always good for the gander and in this case what is good for Google hasn’t always been good for the advertisers. For those without knowledge of how its done – Google’s advertising is done based on a highest bidder system.

If you normally have 1200 potential buyers at your Saturday afternoon car auction then one bright Saturday afternoon 40 additional bus loads of fun filled revelers with deep pockets stop by on their way to the casino, well are your cars going to be auctioned for higher or lower prices?

Perhaps the rumor of the demise of PPC really applies to the only group actually hurt by Google’s growing popularity – those that find themselves with twice as many angry competitors bidding for the same keyphrases.

If those cash rich players on the way to the local casino actually don’t spend all their time in the bathroom, they are likely to bid on a few cars just for the hell of joining a live gambling arena.

If more than a few of those guys don’t head right back for the bus, you and your bidding buddies are going to have some cash rich competition who won’t even listen and smell the exhaust or kick the tires a bit. They are simply going to stand there and bid.

This is exactly what happens when many corporate buyers run in and bid up keywords without taking the time to seriously learn the craft.

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.

Having fun yet?

You are not alone. In helping a friend with some PPC on Google, I noticed a curious phenomena. Over 40 brokers pushing up the price bidding on three phrases and just one lone broker in yahoo and nobody at all on msn.

By the end of the week, my Google Adwords account had recorded over nine thousand impressions on just 3 popular search terms. My yahoo account had barely cleared 1000.

Not only did the competing real estate agents bid the Google prices above the dollar mark, but they also clicked on each others ads by the thousands. I know this because several of them filled in my form after clicking on my ads too. In the meantime, my Yahoo costs stayed serenely under 15 cents per click.

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