PPC Prices Dropping

**John Scott** · 11-27-2005, 02:41 PM

I've noticed that PPC prices for many words have dropped surprisingly low at Google and Overture. Web Hosting keywords, drugs, everything got cheaper. I believe this is normal market normalization. It was just plain stupid to see people paying $12 a click for "web hosting".

I'll bet it continues to get cheaper over the next couple years.

gorillaboy · 11-27-2005, 02:53 PM

For the six accounts I manage, CPC has dropped dramatically over the last year.

Especially on Yahoo! (Overture). Almost a 15% drop in CPC while maintaining the same positions.

bcombs · 11-28-2005, 09:31 AM

I suspect that advertisers are becoming more educated about the value of paid search advertising, and are now actually calculating bid limits, rather than just managing to position and monthly budget.

Brian

**John Scott** · 11-28-2005, 10:51 AM

Back when I was promoting our first site, a contractor directory, I used to get into stupid bidding wars with ServiceMagic for the top keywords like "contractor", paying $3 a click even when we both knew it was just throwing money away. Just stupid pride, I guess, but it worked out okay - they got tired of the bidding war and bought the site.

wobseek · 12-05-2005, 12:33 AM

when advertisers miss a lot of money on PPC,
they will switch to something more practical, pay per action.

MaxForce · 12-05-2005, 02:02 AM

Is there a PPA - Pay Per Action scheme?

Ferre · 12-05-2005, 07:41 AM

Quote:

Originally Posted by MaxForce

Is there a PPA - Pay Per Action scheme?

I guess affiliate programs are PPA schemes?

sem4u · 12-05-2005, 07:53 AM

Yes they are Ferre. Also Pay Per Call is becoming more popular.

**John Scott** · 12-05-2005, 09:57 AM

As an advertiser, I generally don't like PPA. On the contractor directory I mentioned before, we had an offer from a contractor referral service for $100 per contractor sign up.

Now, we could show that banner day in and day out and track hundreds of click throughs, but no sign ups, not by contractors at least.

Is that our fault? Is their product (or presentation of the product) is weak, we can't force people to sign up. In the mean time, they are getting tens of thousands of free (brand building) impressions and thousands of free click-throughs.

MaxForce · 12-05-2005, 07:33 PM

But if they pay so much for those clicks and does not convert the sales, it does not make much point right?
Also, personally I think PPC is open to abuse.

**John Scott** · 12-05-2005, 07:42 PM

I don't like PPC either. Impressions build brands, and that's how most advertising works offline. That's how it should work online, too, IMO.

MaxForce · 12-05-2005, 09:54 PM

Agreed, but how do we measure number of impressions made?

**John Scott** · 12-05-2005, 10:49 PM

You can always serve the ad from your own server, if you don't trust the advertiser's stats.

MaxForce · 12-06-2005, 12:25 AM

Nay, I mean how do we measure the impressions we actually made into the customer's mind? Click through does not mean the impression has been made. While Sales Conversion probably means that too many impressions has already been made.
btw, John, don't you ever sleep?

**John Scott** · 12-06-2005, 12:57 AM

LOL. I took a nap today.

It's impossible to measure impressions in the way that you suggest, but I do believe that advertising, depending on the way it's done, does build your brand value.

Buskerdoo · 12-06-2005, 06:26 PM

I've noticed a lot of price drops starting in October. Coincides with Google allowing people to turn off content site searches?