Standard economics. As you start penetrating potential audience its going to get saturated after some point until you reach all of the audience. As impressions to get one more click are needed more, google needs to exhaust their inventory more. Apparently CTR is going to degrade, and google will start increasing marginal cost per click. Cost per click is curve is often going to be marginal cost curve, where maximum profitability is at lowest point on the curve. Its not about profitability of google adwords but the profitability of the media you're bidding for. When saturated you can always expand your potential market (audience) by adding more keywords/placements.
The declining profitability of Google Adwords
61–70 of 104 posts
Re: The declining profitability of Google Adwords
#62Please bury articles where people claim facts without providing a single number. We don't know how many total clicks this involves, did the clickthrough rate drop 1%, 5%, 90%? Was the traffic search, search syndication, content? Where there content text ads, image ads, flash ads? Did he ever add new keywords, ads, geographic markets? Did he ever change the landing page design? I would be very embarrassed if I wrote t…
I'm entirely ok with this. He really doesn't want his competitors knowing the numeric details of his business.
He explained his methods and gave useful graphs.
Yes, the article could have been more useful. But the way to make that happen in the future isn't to bitch endlessly about people not doing enough free work for you. It's to thank them for the good you got out of it, and politely suggest next time that their article could be even more valuable if they did X.
Re: The declining profitability of Google Adwords
#63Seems like the article is only showing half the story. Costs are going up which means increased competition. Increased competition will mean your ads are running against more competitors. Reason for fall in click-throughs could be under-optimized ad's losing out to competition's ads. As for conversions. Looking at the table plan site I feel overwhelmed. If this is where the ad's are taking users I think it is fairly…
I agree; the site for the software looks terribly out of date, which in turn doesn't instill confidence in potential customers. Updating the site would be his best investment.
Updating site wouldn't make a dent. You seen Cragilist recently? or even Google homepage for the last 10 years??
People go to his website for a certain product. They couldn't care less how the site looks. Does crappy look of Apache software website turns you down from getting the newest download? How about PHP site not updated since 1999. Does their crappy site means they don't know their craft?
After checking couple tabs (that are easily accessible) and being convinced he knows his business, there is nothing more to do than either pull the trigger and buy a product/try it, or leave the site. No fancy graphics or frameworks will change users' mind. And they shouldn't. In fact, if that site would be up to date designed website all nice and clear, I would immediately think its a scam or probably software with built in backdoor, etc.
His site is fine. He is selling table planning software (that looks decent), not a web design lessons.
Re: The declining profitability of Google Adwords
#64The OP probably needs to optimize his ads (i.e. tune them) and the conversion funnel. In my five years of working at Google as an AdWords manager (I don't work there anymore), I've seen cost-per-click and bids rise consistently especially for Google search. This has a lot to do with competition and limited real estate. However, Google maintains something called Quality Score which is analogous to page-rank that deter…
Can you give an idea of how much lower the cost per click could be with a very high quality score (ie 5% of Googles suggested cost per click)?
"With a high Quality Score you can get clicks for a much lower cost. Some experiments put this at about 5% per unit of quality score change (Quality score is on a scale of 1 to 10)."
Re: The declining profitability of Google Adwords
#65There is a very simple reason for this happening - Google needs to keep making more money, so over time they need to raise advertising prices or increase click volume. There isn't going to be a dramatic increase in click volume anytime soon, so for Google to grow at 20%+ a year, they need to raise prices over time, which they do via quality score and social engineering. I've watched Google do this relentlessly since…
That's regrettable.
One of the things that Google seems to generally understand is that a good business is built on delivering ever-higher value.
But depending for growth on getting an ever-higher percentage of the total value generated, rather than generating ever-more value, is the road to ruin. Happy customers rarely switch, even if somebody else is offering an as-good or somewhat-better deal. But having a bunch of mildly irritated customers is a massive opportunity for a competitor who isn't trying to hit an arbitrary set of revenue targets.
Re: The declining profitability of Google Adwords
#66I'm actually quite impressed that people earn money from these advertisements. I have never clicked one of the adverts, unless it was the top result on a Google search for the thing I was actually looking for. It's like a natural instinct to ignore the ads. With the rise of addons like AdBlock Plus, I think it's inevitable that this Ad-venture (pun intended :P) will decline, and cease to work, until a new medium or m…
Watch an average user browse the web and use Google to make a search. They will click on the top ad result returned if it is vaguely relevant and not bat an eyelid. Average users do not even know those yellow sections or the right hand section are ads. The natural instincts of geeks The natural instincts of average users
Yep. My cofounder did a ton of user testing. One guy, as he was doing a shopping-related search on Google, said, "You want to know the secret of Google? Ignore the left side of the page. The good stuff is the little things over on the right."
Re: The declining profitability of Google Adwords
#67Please bury articles where people claim facts without providing a single number. We don't know how many total clicks this involves, did the clickthrough rate drop 1%, 5%, 90%? Was the traffic search, search syndication, content? Where there content text ads, image ads, flash ads? Did he ever add new keywords, ads, geographic markets? Did he ever change the landing page design? I would be very embarrassed if I wrote t…
I'm entirely ok with this. He really doesn't want his competitors knowing the numeric details of his business. He explained his methods and gave useful graphs. Yes, the article could have been more useful. But the way to make that happen in the future isn't to bitch endlessly about people not doing enough free work for you. It's to thank them for the good you got out of it, and politely suggest next time that their a…
However we could still discern a great deal from the data given in the graph.
http://www.evanmiller.org/how-to-read-an-unlabeled-sales-cha...
Re: The declining profitability of Google Adwords
#68Earlier quoted context omitted.
I agree; the site for the software looks terribly out of date, which in turn doesn't instill confidence in potential customers. Updating the site would be his best investment.
Updating site wouldn't make a dent. You seen Cragilist recently? or even Google homepage for the last 10 years?? People go to his website for a certain product. They couldn't care less how the site looks. Does crappy look of Apache software website turns you down from getting the newest download? How about PHP site not updated since 1999. Does their crappy site means they don't know their craft? After checking couple…
This is not how the vast majority of people shop. It seems like you are arguing that changes to a site's design will rarely result in a significant increase to their bottom line, but there are countless case studies that prove the opposite.[1]
Re: The declining profitability of Google Adwords
#69Earlier quoted context omitted.
I agree; the site for the software looks terribly out of date, which in turn doesn't instill confidence in potential customers. Updating the site would be his best investment.
Although I agree updating the site would be good, that's not really to the point of the post, which is about click-throughs _to_ the site.
The point of the post is about overall profitability of adwords. An ad's CTR is important to drive as much traffic as possible and also to keep a high quality score, but you arent directly paying for people who do not click your links. However, you are paying for all the people that click your links and do not convert, so focusing on improving your conversion rate is one of the best ways to improve the profitability of an adwords campaign
Re: The declining profitability of Google Adwords
#70Please bury articles where people claim facts without providing a single number. We don't know how many total clicks this involves, did the clickthrough rate drop 1%, 5%, 90%? Was the traffic search, search syndication, content? Where there content text ads, image ads, flash ads? Did he ever add new keywords, ads, geographic markets? Did he ever change the landing page design? I would be very embarrassed if I wrote t…
I'm entirely ok with this. He really doesn't want his competitors knowing the numeric details of his business. He explained his methods and gave useful graphs. Yes, the article could have been more useful. But the way to make that happen in the future isn't to bitch endlessly about people not doing enough free work for you. It's to thank them for the good you got out of it, and politely suggest next time that their a…
there's plenty of ways to make a useful graph without giving exact numbers. and if he really didn't want to give information away to his customers, he'd not write the blog post in the first place.
Blog posts are marketing, he's driving traffic to his site with this blog. and his "facts" amount to squiggly lines. he doesn't deserve to get traffic from this.