When PPC Bid Prices Get Out Of Control
By Neal Lebar
Expert Author
Article Date: 2003-04-08
Hi Neal:
We advertise on Overture. However, three of our competitors make sure that stay in the top 4 spots by automated bid increases, which raises our bids to $6.00 - $10.00 per click through, until we give up and drop down to the 5th spot. Then they lower their bids and it starts all over again. We have gotten bills from Overture for 3 days over $3,000.00. Due to competitor clicks. Needless to say, we stopped trying to bid. I have contacted Overture, and have presented them with log files on who is clicking on us, but there is nothing they will do.
I would appreciate any help you can give me.
Christine Kossman
http://www.vacandsew.com
Hi Chris:
I've had the same situation with one of my companies in the diabetes business. We had 3 competitors going at it and out bidding each other -- they pushed the per click cost of the word "diabetes" up to $12 per click. They were killing each other. I elected not to go there and stepped back to the #3, #4 & #5 positions where I paid $0.50 or less per click. It's infuriating but it's also how competition works - there's not much you can do about it. Complaining to any of these companies will get a cold shoulder -- after all, who's gaining the most - Overture - they absolutely love it when competitors try to one up each other.
Here's how to combat it:
1) If you don't already have them, you need many…many keywords. I have several keywords that few of my competitors have. You need to make this your first priority. I believe that a click is a click and it doesn't matter what keyword they are clicking on. In your business you should have 100 - 200 keywords.
2) Advertise in places your competitors are not. Use the other PPC providers, www.findwhat.com, www.sprinks.com, www.ah-ha.com, www.kanoodle.com. Here, your click costs will be much lower and most of your competitors are probably not there.
3) Try some alternatives channels. AltaVista sells the #1 position on a search called an FSU - they have also come out with a new product called an RSU that shows up at the bottom of the listings with a logo. You can get exclusivity on your keywords. By getting a contract for a year you can lock up all or some of your keywords -- and you own the real estate.
4) Check out InfoSpace - they own dogpile, excite and a few others. You can purchase banners at a very good price and once again lock in your position and cost.
5) Yahoo also sells banners -- last I heard @ $3 per thousand. If your click rate is 1%, your per click cost would be $0.33 -- a far cry from $5.00.
Chris, there are many things you can do to overcome competition. One thing to also remember, make your competitors pay. On Overture make sure you set your bid at $0.01 below your competitor -- make them pay for their position.
By the way -- the word "diabetes" now goes for about $1.50 -- I dropped to the #5 position at $0.48 and still get quite a few clicks. Let the competitors beat themselves up - they'll go away after they find it's costing them a great deal and they're losing money. But don't forget -- help them to lose money by sticking tight to their tail.
If I can be of any assistance in help you any further, please feel free to contact me.
Neal:
Thank you so much for the information..This is the first time someone has helped me out without asking for money! I am very grateful..I will keep your page bookmarked. If we can help you with anything in the future at vacandsew.com...just let me know.
Christine
About the Author:
Neal Lebar has been building and managing Internet campaigns since 1996. He has proven that Internet marketing absolutely works and can generate returns far greater than traditional media. Visit - www.innovate-inc.com, www.extenderware.com or nlebar@innovate-inc.com.
Neal Lebar answers Internet Marketing and Pay-Per-Click Questions: Click Here For Free Answers
Submit Your Article
Public Relations
Networking
Techniques