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Old 08-22-2017, 03:05 AM
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Adwords PPC competition

Just an observation I have made recently...

It appears that many of the larger companies in the industry I work in (mortgage) are spending more on clicks right now than they take in from revenue generated from the clicks.

Contacts that I have made at some of these companies that are telling me what the conversion rate is and I know roughly what each conversion is worth to the companies.

It appears they make it back from their rankings in the naturals and from repeat business (they could possibly even be operating at a loss) just to gain market share and stomp out those with lower naturals ranking.

My question is this, have you guys seen anything similar to this in your respective industries? Seems crazy to me that it works this way...

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Old 08-22-2017, 11:13 AM
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Losses are the name of the game in the startup community. Pretty much every funded startup overspends on PPC & ends up making a loss. Uber, Tesla, Netflix all have made huge losses at some point of time.
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Old 08-22-2017, 12:40 PM
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Originally Posted by jstevenzz View Post
My question is this, have you guys seen anything similar to this in your respective industries? Seems crazy to me that it works this way...
I can't see anyone operating any portion of a marketing plan at a loss unless said loss is somehow facilitating gains in other areas. Or, as you have put it, maybe blocking out the competition.
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Old 08-22-2017, 01:18 PM
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Its strategic genius really. I guarantee you others are doing it. This is how multi bullion dollar companies take market share.
 
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Old 08-23-2017, 10:19 AM
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Its strategic genius really. I guarantee you others are doing it. This is how multi bullion dollar companies take market share.
It's hope rather than genius really. You hope that market share today will translate into profits in the future. But not everyone succeeds. Most companies fail. Otherwise all startups would have been a roaring success. But they're not.
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Old 08-30-2017, 12:30 AM
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My question is this, have you guys seen anything similar to this in your respective industries? Seems crazy to me that it works this way...
Indeed, Web hosting industry (the one I'm currently in) is completely dominated by the Endurance Group since they are the only ones who have enough resources to sustain such aggressive marketing strategies.

By doing so, they don't really need to improve their product because people will not even see any alternatives without specifically looking for them.

As far as I'm aware, this overpaying strategy only works for the leaders of the industry. Or perhaps you would only need a lot of money in order to achieve it...
 
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Old 08-30-2017, 09:51 PM
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Indeed, Web hosting industry (the one I'm currently in) is completely dominated by the Endurance Group since they are the only ones who have enough resources to sustain such aggressive marketing strategies.

By doing so, they don't really need to improve their product because people will not even see any alternatives without specifically looking for them.

As far as I'm aware, this overpaying strategy only works for the leaders of the industry. Or perhaps you would only need a lot of money in order to achieve it...
Does the endurance group make profits or losses? Aggressive approach is justifiable as long as you're making profits.
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