PPC costs going up?

[Brad Mc Bard]

Hi,
I use PPC on an large number of campaigns in different fields.

I usually buy premium spots (High 1st page only). During the last 2 years I saw PPC costs of "real" KWs go incredibly high. That's across the board - both on B2B ads and on ads directed to households/private buyers.

What's your experience? Have you seen this surge on your campaigns too? What's your way to deal with it?

[dburk]

Hi blackhatcodebreaker,

In the past when someone was looking to buy something they would look for ads in newspapers, listen to radio and TV spots, or pickup the Yellow Page Directory. Over the last few years the number of people that go first to Google when they are looking to make a purchase has increased dramatically, therefor the value of advertising in Google has increased.

The more businesses that move to advertising on Google, the more success shoppers have in finding exactly what they are looking for on Google. Therefor they look there even more frequently. More shoppers increase the value of advertising there, and this increased competition for ad space increases the cost of advertising.

As long as it's more cost effective to advertise on Google, ad revenue will continue to be shifted away from the more traditional advertising channels and into Google. It's likely that advertising on Google will get more expensive as this trend continues.

Eventually, we may see the cost of traditional ad channels drop until they are in relative equilibrium with ROI on Google's sponsored results. It seems that the internet is still having a major impact on business and considering the relatively large difference in ROI for this new medium, and the fact that traditional ad revenues still dwarf online advertising, it's likely to continue for some time.

As advertisers become more sophisticated, you must enhance your own performance to remain competitive. One of the most amazing things about this medium of advertising is the ability to get results in near real-time and easily adapt your strategy.

When there was little competition, and most were still learning how to use this new ad channel, it was easy to throw up almost anything and get results. Now you must optimize your keyword selection, account structure, ad text, landing pages and actively manage bidding strategies to remain cost effective. If you are not experimenting and adapting as rapidly as the rest of your market, you will soon be priced out of this new ad channel.

[jharwv]

Yeah, PPC costs are going up pretty much across the board, due to a lot of reasons:

1. businesses are demanding more control on ROI in their marketing due to the recession, which means more people are advertising online as the ROI is usally much better than 'other' methods

2. expanded b road match means more people now bid on your KWs 'without knowing about it' - therefore increasing the cost

3. more people understand QS, so the market place is getting more competitive

etc etc

[metafever]

I have seen almost the opposite in the Niche's that I target.

I had assumed that with the failing economy a lot of advertisers were getting out of the game. Thus dropping bid prices.

[Brad Mc Bard]

Originally Posted by metafever

I have seen almost the opposite in the Niche's that I target.

I had assumed that with the failing economy a lot of advertisers were getting out of the game. Thus dropping bid prices.

That's the kind of feedback I was looking for...

Yeah, I know everybody's going online and I should keep close watch of my ads. But there's more to that. For example - due to the economy so many are trying their luck in online marketing, and PPC is the easiest way to start - that's certainly driving costs up. Checked the ads in some niches I target, and sure enough - several were from New Affiliates. This means - higher costs for everybody around.

But your feedback regarding lower costs is interesting.
Can you give an idea (without disclosing any secrets, of course) what kind of niche this is?