Posts Tagged CPA
Economics of PPC Pricing: Why Performance Deals Often Fail
Posted by Alan Mitchell in Techniques on February 11th, 2010
For a business looking to hire a pay per click (PPC) agency, cost-per-sale (CPS) performance models are great. The business pays the agency a set price for each sale, so fees are entirely based on the agency’s performance.
From a client’s point of view, this is great. There is little risk – agency fees are only payable once sales come in. Guaranteed profit!
From an agency’s point of view, it’s also great. Each extra sale is extra revenue, so an agency which is confident of its abilities to deliver value from paid search is rewarded heavily (and fairly) for their efforts. Performance-related pay creates an incentive for agencies to invest their best resources and expertise into making PPC campaigns a success for their client.
Researching cheaper and high-converting long-tail keywords, restructuring ad groups to improve relevancy and regularly carrying out landing page testing to increase conversion rate become all the more worthwhile when there’s a monetary incentive. If an agency only gets paid when they deliver sales, it is worth their time and effort to deliver sales.
Sounds too good to be true. Client risk is minimal. Agencies which perform are rewarded. Agencies which don’t perform…well they are forced to perform if they are to stay in business.
So you’ve decided you want to give performance pricing a go. But how exactly would a performance deal work? And how should you go about creating one for your PPC agency?
The 5 Benefits of Long-Tail Keywords
Posted by Alan Mitchell in Techniques on August 6th, 2009
There’s been a lot of talk about long-tail keywords in pay per click (PPC). You could say it started in the entertainment industry with Chris Anderson’s influential Long Tail article in 2004, but it wasn’t long before the concept became mainstream among search marketers.
Long-tail keywords are those low-volume, obscure, infrequently searched-for keywords that turn up in your search query reports. ‘Cheap remortgage for bad credit history’ is one example of a long-tail keyword. ‘Remortgages’ is not.
The theory goes like this:
- Long-tail keywords, en masse, can provide significant search volume (high impressions)
- Long-tail keywords have less competition than generic keywords (lower cost per click (CPC), higher click-through rate (CTR))
- Long-tail keywords are more specific than generic keywords, so ads can be better tailored to match the searcher’s needs (higher CTR, higher Quality Score, less wastage from irrelevant searches)
- People making long-tail searches are often further along in the buying cycle and more willing to buy than people making generic searches (higher conversion rate)
- These lower CPCs, higher CTRs and higher conversion rates mean long-tail keywords can be extremely profitable (lower cost per acquisition (CPA))
So are long-tail keywords all they are cracked up to be? Are they worth all the time, effort and commitment they require?