I was playing with the google keyword tool today. Try writing "insurance" and then sort them by the "Estimated Avg. CPC" column I've got "21 auto insurance" on top with $83.81 per click on average. Which means that there are advertisers paying $83 per click for that keyword? A glitch maybe? Well i kept looking and there are plenty of words like that, the most of them highly unbelivable like "hoodia gordonii uk" for $77.56 per click on average and even more averaging about 40-50$ per click I remember that couple of years ago the mortgage and credit card related keywords were some of the most expensive ones, but even back then they were about 20-30$ per click and that was considered crazy. How do you explain the nowadays values? Some mass glitch or google keyword tool information doesn't mean much now? I'm really having hard time believing someone pays that much for such keywords. I've noted high difference and with the reported traffic as well.
Auto Insurance Companies make plenty of profit to pay $80 for a potential customer. Same would be true for the Mortgage and Credit Card companies.
When you have a business model that creates a long term relationship with a customer it's easier to pay a lot of money per click. Especially when the profit margin is high enough. Look at it this way. How much does an average person spend on in insurance in 3 years? Compare that to $80...
agreed, these companies that can afford to pay these high costs are building relationships with these customers over time. So it's not a one-shot deal. They're building relationships so that the lifetime value of their customer comes into play. If they sell a customer 20 policies over their lifetime imagine what their profits are. They're high enough to justify these insane cost per click. Bear in mind that these companies also run television ads and ads and all other types of media. Their pockets are very deep as their profit margin is very wide. To compete with them, takes a bit of ingenuity.
well even if it converts 1:10, that's $800 per customer which still might be believable for insurance but what about ""hoodia gordonii uk" p.s. on the other side though it shows much less CPC for "hoodia gordonii uk" today hmm p.p.s. what are the amounts it shows for you guys, and do you actually believe that's true data?
No, it doesn't mean that at all. It means that if you are a typical advertiser with an average QS, you will currently pay that much if you are in the top three positions. Position and costs are based on QS. The keyword tool doesn't know what your QS is or will be so it takes a middle of the road approach. An average QS might be 6, but if you achieve anything higher, your costs will go down. While it is possible that some are paying nearly that much, the higher quality ads certainly are not. For example, I have a client where a keyword is estimated to cost $8.14. However, he's paying only about $2 in the top positions. That's because I achieve a QS of 10 and paying only a quarter of the estimate. Typically, my actual costs are about half of the estimate and that's often with a QS of just 7. I therefore think that in the auto insurance industry, the top advertisers may be paying more like $40-50 per click. As mentioned by others, it likely is well worth it for them given the value of a customer.
thank you for the great explanation! Would you also share your observations about the accuracy of the monthly searches data? I'm asking cause i just got #1 for a phrase with 1300 searches per month, and i havent got a single click yet, and its been well over a week. p.s. another thing i noticed is that the estimated CPC shifts a lot! later yesterday i got about $3 for the same "hoodia gordonii uk" term, and today it shows $0.00 edit: right now im getting $29 for that term
How many actual impressions did you get for the keyword? 1300 searches a month is not necessarily a lot in many niches. Don't forget that Google "spreads your ads evenly" over time so that you can "take advantage" of traffic at different times. In such low search volume situations I recommend using accelerated delivery. There are many factors at play too - how "urgent" your keyword is to the user for example. Then of course, the strength of your ad counts. Estimates are just that -estimates. Use them as a rough guide but what you see on the ground is your reality. And that's what you work with.
By the way, it's possible to get to number 1 without the keyword being included in the title, text and display URL. However, when you do add your keyword in the above mentioned places you - increase your quality score - tend to increase your CTR - which in turn further helps to increase your quality score -which reduces you cost So if haven't done this already - do it now! This is the reason why it's really important to keep keywords in tightly themed adgroups. Especially the ones most likely to bring home the bacon.
i've got #1 for an organic listing. I'm using the adwords keyword tool just to research keywords and stuff. Dont really do much PPC nowadays yeah 1300 is not much, but is easy to get and should bring about 600-700 hits per month which might be 10-20 sales or so and that's good considering the time put to get it there
These rates are only for those publishers which drive niche related traffic to advertiser and also convert into sales . If you can drive high quality niche related traffic to company than they will always think about you for sure .
The number of searches is accurate. It is not an estimate but based on actual data which anyone with an Adwords account can verify. Given of course that your ads are showing 100% of the time which you may not be depending on various factors. You can see if you are with an Impression Share report. Of course, impressions does not equate clicks which depends on your ad's attractiveness. If you did get 1300 impressions on the search network with no clicks, you have a poor ad. But I wouldn't expect the 600-700 clicks either as you do. It still depends on your ad. A CTR of 20-25% in first position is excellent but you can get more, even the 50% you suggest. It's not easy to get higher rates but not impossible. I'd work on getting that conversion rate up some more.
Are you sure you don't have Google web history on? Sometimes google displays sites you've visited often higher than they are actually ranked. If you want to be sure you can check this tool: http://tools4google.com/search-google-position/keyword_tracking.php or try searching on a different computer.
It is absolutely crazy, thing is at the end they don't pay from their pocket , customer pays for it. As silly people compete with such cpc , they raise insurance prices. They would hesitate to pay a claim to $300 but gladly pay few thousands everyday in clicks, whereas if they were to pay claims more readily than they would likely have more long lasting customers but alas they are going cpc crazy.
Adwords only charge once for first time click. But if your client is happy with you and continue with your service then can make several thousands from a user.
That's the figure most people use (taken from one month's worth of data on AOL about four years ago) but that study had some flaws in it. When you remove the junk, the real number is more like 25%. And things could have changed in the four years since. I'm seeing a shift in searcher behavior in Adwords so there could be one for the SERPs too. You are also assuming that every one will get this click rate. Your organic listing's click rate still depends on what it says and how relevant it is to the search. It's your ad!
yeah true, it might vary a lot, but still i expect it to be in a reasonable manner. Getting 0 hits out of supposedly 45 searches per day, every day for 2 weeks, doesnt make sense. EVen with the worst ad copy and in my case its alright. I simply dont have idea what it imght be...