Apart of buyers who will make a second purchase later on...

It depends on the marketing plan, budgets of the advertiser. Not all advertisers having the benefit, even though they have offered a high pay per click. However, it actually a marketing strategy or a deep plan to move forward with the profits. And i have tried a lot to find such high paying keywords but finally found some keywords related to eCommerce which pays me more.

It's supply and demand. It's the cost of acquiring a customer. This is different in different industries.

For example, lawyers pay big bucks to attract new clients. They advertise on radio and TV. How much do you think they pay per client with these methods? In this case, a few dollars per click is nothing and it's more targeted. I know, I have a couple of clients who are lawyers and they pay $5 and up without blinking an eye. Why? Because it's profitable for them. Same for a couple other clients paying $1 to $3 per click. It's not the CPC that's important, it's the revenues generated from those clicks. As long as the returns are good, they'll pay whatever it takes to get those customers. Because their competitors are doing the same.

It depends on the offer, if it's a monthly thing you may find that the average users stays subscribed for 8 months with a monthly fee of ($50) meaning each customer is actually worth $400 to the business.

That's just a random example but shows how sometimes it's easily worth $2 a click

The ones paying high cpc are proper/big businesses with great products and services, an optimized sales funnel and an array of back-end products. In most competitive industries, advertisers are either breaking even or making a loss upfront through ppc. However, since their customer retention rate and average customer lifetime value is high, they can pay good money for a click because once the customer enters their sales funnel they will be milked for a long time to come. In short these advertisers are not affiliates and are looking for long term profits NOT for a quick sale.

dont believe me? try this
1) enter the query 'sell structured settlements' into google.com (US search results)
2) click on Peach tree financial's ad. the actual cpc for this keyword is $50+ for the top 3 spots. I have done adwords in this market.
3) check out the sexy landing page. Notice the banner just above the form. They are offering a $50 gift card if you have proper documentation.

For softwares and other digital products, there are little to no overheads so you the margins are very high making it possible for software companies to bid high on relevant keywords.

Cup,

I don't think that you are missing anything necessarily. It is quite a lot of money to pay. However, most of these people, as mentioned above, are paying for customer acquisition over the long haul.

For example, I have noticed one prominent SEO company advertising everywhere lately? The term "SEO" on adwords costs about $10 per click. So, they are paying quite a bundle to get a customer because they get them over the long haul and in the end the customer is paying them $99/month.

Clearly, they have deemed it worth it but it takes some deep pocket initial investment though!

You think $2 is alot?

http://www.wordstream.com/articles/m...nsive-keywords

It's called 'recurring revenue' in many cases.

I would also point out that while Google may quote you $10, $2, whatever per click - if you have a high quality score and a great click through rate you can get those same clicks for significantly less: 20% or 30% on what the standard CPC is.

It's all a matter of math and whether the ultimate revenue exceeds to ppc costs.

.

[DELETED]

[DELETED]