While many users will be satisfied with getting
free clickthroughs from the search engines, for some people (myself included),
it pays to pay for traffic. There are many sources of paid traffic on the
internet, including banner ads, newsletter sponsorships, and so on, but this
article is devoted to two of the most "search-engine"ish sources,
Overture (formerly Goto.com) and RealNames. I also comment on the new DirectHit
sponsored listings and the many Overture clones - and the latest and potentially
most revolutionary entry into this arena, Sponsored Links on Yahoo.
Overture
Overture.com
(formerly Goto.com) is simply a search engine where you can bid for the top
positions for various search keywords. It cuts through all the "search
engine position" baloney, and simply says "put your money where your
mouth is."
The big news recently with Overture is their
partnership with Yahoo which puts the top 3 Overture results for a keyword near
the top of the page in Yahoo search results (positions 4&5 appear at the
bottom of the page, and lower positions sometimes appear on subsequent pages).
This will no doubt increase the traffic you get from them, but the usual
positioning rules (see below) still apply.
Overture was until
recently the best deal on the net for paid clicks, but recent changes
implemented by Overture have significantly reduced their value, and you now have
to be much more selective in your use of their service.
The changes at Overture are that they are
requiring a minimum monthly fee of $20, and a minimum bid amount of 0.05 per
click. Overture has been very vague about why they are doing this, but my
suspicions are that the minimum fee is being set to eliminate small customers
who aren't generating enough income for them to warrant servicing their
accounts, and the minimum bid has been implemented so they can guarantee their
major search engine partners (like Altavista, and more recently, Yahoo!) of a
minimum amount of income per click.
I personally have no problems with the minimum monthly fee; if you're not
spending more than $20 on Overture, you're probably not using it to your best
advantage. It's the minimum bid that I find very shortsighted. I bid on
hundreds of terms on Overture, and many of them are not worth 5 cents. In
particular, there are several very general, very high-traffic search terms
that generate a lot of clicks for me, even though my bid is only a cent or
two, and even though my bid position is very low (in the 15-20 range). 20-25%
of my Overture bill every month is a result of those bids.
Overture's major search engine partners only show the top 2 or 3 listings from
Overture, so my low bids will never appear on them -- only on the main
Overture site. Under the new policy, I'd have to remove all of those
high-traffic, low-cost search term bids (current accounts are grandfathered
indefinitely, as long as you don't change your bid, but if this changes, the
bids will come down). That's a total loss of income to Overture - even a penny
or two is better than nothing.
If Overture is raising the minimum bid in order to satisfy their partners --
which I have nothing against, by the way, because any search term for which
I'd want to be in the top 5 bids is going to be worth at least 5 cents -- then
the correct way to do it is to simply require that the top 3 or 5 bids must be
5 cents or more. That way the partners get their money, the advertisers can
still place low-cost, low-position bids on popular keywords, and Overture
optimizes their income. But currently, Overture isn't doing this, so my advice
on how to use them has to be based on their current rate structure.
In the past, I've found Overture to be incredibly
effective. For every $1 I spent with them, I typically got $3 in contributions
from new users. Under their new pricing system, I don't expect it to be that
good, but still worthwhile. In the early days, before there was much competition
for keywords, it was more like 10-15:1! Compared to banner ads, Overture tends
to deliver much more targeted and valuable clickthroughs. Even under the new
system, if you are serious about selling something, you should give them a try.
Overture now has a Full
Service Plan designed to help you get started. $149 gets you $50 worth of
clicks, plus some hand-holding to help you determine what keywords to target.
Of course, if you've read my
page about keyword selection, you can save yourself $49.00. Send half to
me (grin)!
How to use Overture
Rule #1: don't be obsessed with getting
the number 1 position on the search returns. It often isn't worth it.
My rule of thumb is that the more specific the keyword, the higher I want to
rank. For very specific keywords I want to be in the top 3, because then I'll
appear in Overture partner sites like Yahoo. But for general, nonspecific
keywords, I believe that positions 8-10 are more cost effective, because the
first few listings will tend to "filter" the clickthroughs you get.
After all, the more other listings the visitor passes up before getting to yours
and then clicking on it, the more likely he is going to be interested in what
your site is about. See rules #3 and #4 for amplifications on this.
Rule #2: monitor the effectiveness of
your clickthroughs. You can have each of your search terms click
through to a different URL if you want, and you can use this to track what
search terms are actually generating income for you. Some search terms are worth
only a few pennies, others might generate a dollar or more in income per click.
Bid accordingly. Overture has a basic
tutorial that demonstrates a couple of ways of making it easier to track the
results of your search terms.
Under the new pricing system, it is imperative
that you only bid on search terms that are specifically focused on your
product or service. The more specific the keyword, the better it is likely to
convert into a sale. Since you now have to pay at least 0.05 for a click, it
is usually no longer worthwhile sponsoring general keywords. Do the research
to figure out what specific search terms apply to you (read my preparing
your pages for the search engines article for tips on how to do this; in
particular, use the WordTracker service).
If you're a current Overture user who is
grandfathered, plan now on what search terms you'll cancel when/if the
grandfathering stops. Typically, you'll be getting rid of the low-cost,
low-position, high-volume bids, but the only way to know for sure which bids
are cost effective for you is to track your conversion results for each search
term you're bidding on. If you're not doing this now, you should be.
Rule #3: If you are bidding on a keyword
that isn't the prime focus of your site, my advice is, at first, simply bid
enough to get on the first page of search returns. Later, once you know
how much those clickthroughs are worth, you can raise your bid to get more
clickthroughs, but note that often, the higher up on the page your link appears,
the less valuable it becomes (because of the filter effect). Now that you have
to pay at least 5 cents, you have to be much more picky about even thinking of
sponsoring a general keyword!
For example, if you search for "yahoo"
on Overture, you'll find that I have a link to my Yahoo tips page. I used to
be bidding enough to get position 3, but found that dropping my bid to a mere
2 cents (position 6 at the time, position 15 or so now) only slightly reduced
the number of clickthroughs but increased the number of visitors who ended up
being contributors - the filter effect in action. Even so, I was considering
dropping my bid to 1 cent, because the keyword isn't closely focused on what
my site does, so my conversion rate from visitors to paying customers is much
lower on this keyword than, for example, "register website." When
grandfathering ends, I'll not be bidding on the Yahoo term and Overture will
be kissing $20 a month good-bye.
Rule #4: Consider bidding for one of the
first 3 positions, but only on very specific, very focused search terms that are
directly relevant to your site, but only if they are cheap. Overture is
now providing paid search listings for Yahoo!, America Online, Netscape Search,
Lycos, Hotbot and Altavista - but only the top listings will appear. Overture
search results also appear on many of the major metasearch sites.
This promises to generate a large amount of traffic, but because each of these
sites differs in how many Overture listings they display on their first page of
results, the "let the top positions act as a filter" advice may not be
the best approach because it means you won't appear on the other search engines,
many of which get a LOT more traffic than the main Overture site.
My gut feeling here is that if you're currently in the #4-6 position for a very
specific search term on Overture, and you can bump yourself to position 3 for
less than a 25-30% jump in your bid, it's probably worth doing. But here's an
important caveat; if you get outbid and drop to position 4, then you probably
should reduce your bid to put yourself back into the position 6-8 range.
Similarly, if you can get a #2 position cheaply, go for it.
Obviously, you should only do this on search terms that will only be searched
for by people who are clearly interested in what you're offering, and like any
other search term, you need to monitor how cost effective it is. You can't lose
a penny on every click and hope to make it up on the volume!
Because the new search engines have much more traffic than Overture, less
popular variants (and misspellings) of your keywords will become more important.
Consider increasing the number of keywords you sponsor to cover the
misspellings.
Wrapping it up
The whole point with pay-per-click is this: if the average visitor to your site
generates 10 cents of profit for you (after counting all your costs!), and you
can get the visitor for less than 10 cents, then you make money. So it's crucial
that you be able to track your visitors and determine how much they are worth to
you. For example, I know that the average visitor sent to me from Overture is
worth 18 cents. My average cost per click is around 6 cents, so I'm making a
nice profit on the investment. The new pricing system means you have to be more
careful and monitor your clickthrough conversions more closely.
Other Overture-like
services
There are tons of new services that use the
Overture model; in order of traffic they generate, the most popular are FindWhat,
Sprinks
(sponsored links on About.com), Kanoodle, and Bay9. None of them generate more
than a small fraction of the traffic that Overture will, but FindWhat is
probably worth looking at; it generates 10 times as much traffic as Kanoodle or
Bay9 and has been aggressively ramping up traffic recently. If you are spending
$50 a month or more with Overture, FindWhat may be worth doing as well.
Wondering why some of the sites don't have links? Read on!
Keep in mind that you need to track traffic from each of these search engines
separately, because the "quality" of their clicks varies. While the
average visitor from Overture is worth 16 cents to me, the average FindWhat
visitor generates only about 10.5 cents in income. Thus my bids on FindWhat are
considerably lower than my equivalent Overture bids. Here are the current
overall statistics on clickthroughs I've gotten from some of the major
pay-per-click engines; as you can plainly see, the quality of some of them is
abysmal and they should be avoided. At the present time, I can't recommend bids
of more than 1 cent on any pay-per-click engines other than Overture and
FindWhat -- and on Bay9 and NetFlip, I can't even recommend that! Espotting is a
special case, they are a UK-based pay-per-click engine with relatively low
traffic but decent results; you might consider them if your business is
international in scope. Espotting is affiliated with Bay9 but generates much
better results.
Whatever you do, avoid any pay-per-click service that pays surfers to click. The
quality of the clicks is very low, and clickfraud is rampant.
