Too Much Traffic Causes Accidents
While reviewing my pay per click listing
expenditures at
Overture this past week, I was absolutely
shocked to see
that the cost of one account had more than
quadrupled a few
days earlier.
I didn't recall that my product sales were
unusually high
that day, however. On review, I saw that my
sales
were almost double the average number, but
nothing
extraordinary - and certainly not four
times greater.
It took me a little while, but I finally
figured out what
happened to cause this huge spike in
traffic and my
advertising costs that day.
On one hugely popular keyword that receives
several million
searches at Overture in any given month, I
usually try to
maintain the third position, as opposed to
the first. Past
experience has taught me that the third
position has a much
better conversion to sales rate than the
top spot.
In order to get and maintain a third place
position, I bid
36 cents, which was just a penny lower than
the second
highest bidder.
Bidding in this manner flies in the face of
conventional pay
per click strategy, which suggests that I
should bid one
cent higher than the next LOWER bidder, or
24 cents in this
case. However, the conventional strategy
allows the
competitor in the 4th spot to raise their
bid by just 2
cents to regain his or her third place
standing. Using my
method, he'd have to bid thirteen cents
more to gain
placement above my listing.
Also, by using Overture's Auto bid feature,
my cost per
click will only be one cent above the
maximum bid of the
next highest competitor. So, even with a
maximum bid of 36
cents, I will only pay 24 cents per click
as long as the guy
in the fourth spot stays at 23 cents.
That's where my problem began. The other
bidders didn't keep
with my game plan.
Bidder Number Two dropped out of the
game entirely,
and Bidder Number One reduced his bid to 35
cents. This put me
in first place, paying a hefty 36 cents per
click.
That might have been OK if the number of
clicks I received
that day had remained the same. Assuming an
average of 100
clicks per day, my cost to advertise would
have gone from
$24.00 to $36.00 for the day. A month as
"Top Dog" would
have cost me an additional $180.00. A good
lesson - not to
be repeated.
Unfortunately, in this case, all that talk
you hear about
the top position receiving considerably
more traffic than
those positioned lower down is true.
Actually, the
percentages bandied about in the pay per
click promotional
material is perhaps a little low.
I didn't receive just FORTY percent more
traffic for the day,
I got FOUR HUNDRED percent more traffic for
the day.
Whether your advertising budget is tens,
hundreds, thousands
or even tens of thousands of dollars per
month, errors like
that can have a significant impact on your
business if not
caught in a timely manner.
I'm just lucky that the original top bidder
missed his high
traffic volume and took back his top spot,
sending me back
to my rightful, less expensive placement
the very next day.
So, stay alert! While using pay per click
engines is a great
way to get traffic to your site,
inattention could result in
a costly 'traffic accident'.
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