In very competitive search terms....like -mortgage rates -insurance rates -credit debt -dui lawyers etc. You have "lead companies" that do PPC ads and agregate the info. They then sell the info to end users. QUESTION(s): - Does anyone have an idea how much the markup is per lead? - How do these lead companies make money on Extremely competitive kw's? ~thanks
posted by acw: I have experience with real estate relocation leads and a few other highly competitive niches. In my experience -- 1) There is no fixed markup; you're selling the lead at a market competitive rate and trying like hell to get costs under that rate. As a result sometimes you might make wide double-digit returns on cost, and sometimes you might go into the red on a specific campaign. In that sense it's not really different from any other kind of PPC campaigning, whether you're promoting CPA, affiliate products, etc. 2) Competitive niches are expensive because there's money to be made. The dollar margin on a $1 kw is not too much different from the margin on a $10 kw, because the only reason that any given kw has activity on it from lead generation operations in the first place is because it's producing. In real estate, individual markets are cyclical, so it's normal for there to be broad variation in the CPC for ads run on "[cityname] real estate" or "relocate to [cityname]" over the course of a given year. As long as it's producing, we'll tend to just ride out the price variations, even though the higher prices cut into the profits (since we can only charge so much for the leads.) The important thing about a high-cost lead generation process, especially in a cyclical market like real estate, is to be aware of the market itself, not just the CPC and sales figures. You need to be aware of general conditions relating to the market, so you can pull out when the leads dry up. (ie. there are only a very small number of people seriously planning to move to say Orlando sometime during the course of this year, and half the planet is trying to get their telephone number to pitch a house to them -- the truly relevant and valuable leads can dry up very quickly if you don't pay attention to market stats outside of your own bottom line numbers.) Frank
I run a B2B lead generation company (not mortgages or debt) and I can tell you that the most IMPORTANT thing is to have high converting landing pages. Your aim should be to convert 100% of visitors to your website and the majority of your effort should be on analyising and refining your landing pages.
Thanks Guys. I think....The objective is to get a Bonified lead. A Bonified lead would be a Filled in Form....or a Phone Call. I think that some who runs a Lead Generation Site would be able to answer the real question...Which is "what is the average amount of clicks you get before getting a Bonfied Lead" Hell...if you are paying $10 per click...and you only convert 1 out of 10 visitors....you are going to have to sell that lead 10 times to break even. ~T
posted by acw: Well, that "real question" doesn't have a lot to do with the other two, but the answer is: however many it takes. As I said, you make money on some campaigns and you lose money on some. As tryme1 pointed out, conversion is critical -- so you want to avoid getting your ads in places where they aren't being seen by actual relevant eyeballs, and make sure that people are actually tempted to fill out the lead form. In the case of relo leads, it's an information pack put together by the Chamber of Commerce, local realtor's association etc. People seriously considering moving to a given city need the sort of information that is there, and it's free -- they're hardly going to use a fake address, since it's a mail in form, and the e-mail address has to be good because it's required to confirm the request for information. That makes the lead about as qualified as it can get for that market. As far as selling a lead ten times, some places do that and some places do exclusive leads (in real estate and in other businesses.) Price competition makes the expensive kw leads less profitable as a % but they can still be sold for reasonable $ measured profit. Frank