Is PPC dieing?

[Windsun]

We are taking a 2nd look at this whole pay for click thing, since the returns just don't seem to be there anymore. Overture has been really bad lately (aside from their numerous other problems), and Google is not doing for us what it used to do either - by a large margin.

A problem that seems to have appeared recently is that people are ignoring the Ads now - with so many of the Ads that show up being totally non-relevant - like from eBay, Amazon, shopping.com, and similar - people just don't pay attention to them any more. Ads get lost in the noise.

I just did a random search on Google for "digital phones". Nine Ads came up. Of those, only 4 were for digital phones - the rest were from eBay, Amazon, BizRate, Shopping.com, etc etc.

Sorry, but I just don't have time to search through all the crap ads when I am shopping - and I suspect that OUR ads are being hit the same way.

MSN search was a little better - 7 of the 12 were at least actually selling phones. But there again, the number of Ads on each page has gone from 3 to 5, up to as many as 16. The more Ads there are on a page, the more they ALL tend to get ignored.

I am still watching the results closely, but at this point I am strongly suspecting that our PPC spending this year will drop 90% or more.

[seomike]

We hired a copywriter to redo our PPC adds and landing page copy. She also suggested a few layout changes here and there on the site, nothing drastic. We went from a 5% to a 13% conversion rate on our core site for Overture.

I was a skeptic but now I see the light :D

[Windsun]

Our conversion rate on Overture has been really poor lately - some terms that were as high as 20% are now under 1%. And many terms have none at all.

And we have had many many problems with the editorial fubars at Overture also - like recently 400+ keywords rejected for site not found - yet the site has been at the same URL for 6+ years, with less than 4 hours total downtime in that time period.

We have kind of stuck with Overture so far to see if the new MSN search makes any difference, but so far we are not seeing it.

[Anthony Parsons]

I think there are to many variables to just say, yuk. As mike gave his opinion above, some simple changes made a world of difference. For how long? Who knows.

Things that affect your conversion:

# Headings
# Descriptions
# Landing page
# Product
# Product market size
# Is it an expendible item (will they continue buying)
# Quality of the product
# Ease of site use
# etc etc etc.... the list is long.

Any of these things + lots more, could be affecting your conversion rate, even though it was high, then low. Are people happy with your product / service? The list is long and this is where analytics plays an important role in any good advertising campaign.

[hardball]

Good points Windsun, PPC is not a guaranteed straight up vehicle, larger companies are reacting as well.

"Bill Cobb, the president of North America at eBay Inc., said the company has seen "bubble-like" price increases for the key words that drive Web search advertising popularized by Google Inc. and Yahoo Inc."

http://money.cnn.com/2005/02/10/technology/ebay.reut/

I believe a lot of companies are in "experiment" mode, not to be confused with "written in stone PPC budget".

[Mikkel deMib Svendsen]

I agree that a continuing degrade in quality of ads could very well lead to less people watching them. And perhaps this is already starting to happend in some markets and industries. However, I don't think you can say that it dosn't work anymore or PPC is dieing in general.

It's a ballancing act for the PPC-engines. I do agree that they seem a little greedy at times when they allow ads that are clearly not helping the users listings that we all know would be booted from the organic index if found there. ut I also know that there are many good people at the same PPC-engines fighting for better qulity. You know, they don't allways agree internally either :)

[Windsun]

I doubt very much that we will drop PPC, but we are going to be a LOT more selective, and concentrate on proven "niche" keywords with proven returns.

I have noticed there is a lot less spam with those keywords also - if I do a keyword on "green widgets", I get 90% junk, but if I do "Acme (model number) widget I get far less clicks but much better conversion.

One of the things we sell is 12 volt lights for RV's etc - but the price of keywords there has gotten rediculous for most. Some as high as $2 each - for a $30 item, with a 1.2% conversion rate - that does not compute for us.

I think the PPC companies are going to drop a lot in revenue this year as people see back off from the glitter. I could be wrong, but I sense some disillusionment with PPC ads. EBay must spend millions - it is almost impossible to type in any search term where their ad does not come up - I wonder what their real ROI is .....

[andrewgoodman]

I see a wide cross-section of campaigns, and while there are increasing challenges in some of them, I'm witnessing plenty of opportunities unfolding. I'll take your bet. The majors' PPC revenues will continue to increase at a steady clip for the next three years.

As for the "eBay problem" -- this too shall pass. What eBay knows is that an aggressive spend today means a better ROI than an aggressive spend five years from now, when further inflation has taken place.

Advertisers are seeing costs rising and taking the temperature of how this "feels" to them. But larger ones understand that offline campaigns cost them much more, so they aren't about to back off or throw up their hands in despair just because PPC "seems" prohibitive. Based on what yardstick?

Anyway, if everyone but my clients wants to complain about bubble-like pricing and leave the auction, we'll be fine with that. :)