Mar 04 2008
The Cost of Clicks Are Rising… But Don’t Complain
Recent statistics show that the number of paid clicks (on Google) is going down, but the prices for those clicks are going up. The numbers show that paid clicks were down by 5% from last year but advertiser spend on Google was actually up about 7%. The overall click through rate (CTR) was up by 10%. What to make of these numbers? Lets try to put them into perspective for you…
Google has made some changes to their ad serving techniques that has decreased the overall numbers of clicks, while web surfers are also becoming desensitized to sponsored advertising on many websites. This seems like a negative for Google, but realize this was most likely their plan.
This is Googles way of being able to charge more per click, but give their advertisers better conversion rates and sales. So while clicks are down overall, Google has managed to improve their ad serving technologies. Now more then ever, you are likley to see ads that pertain to your searches. They know if you see a relevant ad, you are likely to click on it.
For many years Google has been critised for a lack of quality ads on their search engines. They have heard all to many complaints of people saying their ads are not showing in the right places. This has lead them to refine their engine to serve up what the viewers want. Their overall theory follows this example…
Which model is better
Model A-
Spend $100
Receive 50 clicks
Achive 1 sale
Model B
Spend $100
Receive 15 clicks
Achieve 5 sales
Obviously Model B is better. The overall number of clicks is becoming irrelevant in search, while people are focusing on overall ad quality and campaign ROI. This is how it should be, and Google is the first search engine to realize this and make it happen. So when you see that clicks are down and spend is up, just be happy that this is due to a recent increase in quality advertising. If you are having trouble with your campaigns and spending more and getting less, you may want to look into a SEM firm to help optimize your campaigns.
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