Jump to content

Cre8asiteforums Internet Marketing
and Conversion Web Design


Photo

Overture bidding cap -- I wish they could remove it.


  • Please log in to reply
19 replies to this topic

#1 callback

callback

    Gravity Master Member

  • Members
  • 122 posts

Posted 11 August 2004 - 02:09 PM

Hi friends,

I intend to try Overture for a potential client of mine but I am hampered by Overture's cap of $100 for maximum bid. One of the keywords I have to bid has already been $100 and I can't bid higher to top my position because the cap. Have you guys ever been stopped by this cap doing your advertising? Do you agree Overture should remove this cap? Certainly it means more revenue for them and I just don't understand why Google never sets this type of restriction.

I'd like to collect your opinion of this issue and maybe I can find a way to get Overture to hear us.

Thanks,

#2 Black_Knight

Black_Knight

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 9339 posts

Posted 11 August 2004 - 04:07 PM

Assuming a 1% conversion rate (never assume you'll get more than that) you'll be spending $10,000 to make each sale. In actual fact, with very high ticket-price items, conversion rates tend to be lower than average for lower ticket items, so you could actually end up spending $15,000 and still not get a sale...

Can you afford that?

Spending more than $100 just for the click, without even knowing who is clicking or why (and you can absolutely guarantee that your competitors will click at least once or twice a week just to cost you a few hundred bucks) isn't necessarily a good idea. I have never needed to bid anywhere near even a tenth of that for any of my clients, but have instead used better keyword targetting to find the far cheaper terms (that are often indicative of a customer at a better/more-imminent part of the shopping process anyway).

#3 kensplace

kensplace

    Time Traveler Member

  • 1000 Post Club
  • 1497 posts

Posted 11 August 2004 - 06:47 PM

Ammon makes sense (as usual), what is it you are trying to sell? Why do you feel the need to spend so much on a click that means that someone opened a webpage, but nothing more is certain?

For that sort of money, if the client has it, would they not be better off using it to advertise on the radio, or on trains, buses etc, hoardings etc?

#4 Respree

Respree

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 5901 posts

Posted 11 August 2004 - 07:08 PM

I'm curious, what type of industry can support $100/click?

#5 Guest_rustybrick_*

Guest_rustybrick_*
  • Guests

Posted 11 August 2004 - 08:08 PM

Garrick, medical malpractice legal industry.

#6 liwenz

liwenz

    Whirl Wind Member

  • Members
  • 56 posts

Posted 11 August 2004 - 08:41 PM

I haven't started PPC yet and I will sometime later. I am wondering about this issue raised by Ammon

"you can absolutely guarantee that your competitors will click at least once or twice a week just to cost you a few hundred bucks"

Say, I spent money on PPC to attract unique/targeted visitors to my site. What if my competitors would click as many as they liked. Then all your money went to the drain for nothing. That sounded so risky. How would you solve the problem like that?

#7 Black_Knight

Black_Knight

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 9339 posts

Posted 11 August 2004 - 09:14 PM

The big players of the PPC search providers (Overture, Google, etc) all have systems that will discount multiple clicks from a single IP address within a relatively short period of time (be that hours, days a week) and some additionally use cookies too. All that kind of stuff prevents mass abuse, but small-scale is virtually impossible to prevent. The competitor who clicks on your listing only when it comes up in a genuine search, maybe once a week, maybe twice, really isn't going to be blocked. At 50c a click that's just one of the overheads you account for - idle surfers, just as your telesales have to account for some of your competitors ringing up for a quote just to compare how you handle things.

But at $100 per click you might find that these costs don't scale. More competitors might click - other unrelated SEOs looking up who has the highest per click bids might waste a click or two as well - and tyre-kickers and 'just dreaming' window shoppers are going to be a far higher percentage of clicks than normal too. The scale does change things.

#8 liwenz

liwenz

    Whirl Wind Member

  • Members
  • 56 posts

Posted 11 August 2004 - 11:05 PM

Thanks, Ammon, for your info. That has relieved my worries. It is just a normal part of the game, well, definitely not for $100 per click.

#9 Black_Knight

Black_Knight

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 9339 posts

Posted 12 August 2004 - 05:29 AM

You're welcome, liwenz :)

#10 Guest_rustybrick_*

Guest_rustybrick_*
  • Guests

Posted 12 August 2004 - 08:38 AM

I discussed the $100 per click keyword deal with someone who is willing to do it. He said that there are so few cases with such a short window of opportunity (feel bad saying that because these people have 8 months to live). But lawyers are willing to pay big money to get these cases.

#11 tonywright

tonywright

    Unlurked Energy

  • Members
  • 3 posts

Posted 13 August 2004 - 11:06 AM

I think you are all missing the point.

There are several places where a $100 bid would be appropriate - especially in a competitive market place, with a limited number of searchers where the profit margins could be large.

I think the point is - why is Overture (and Google for that matter) limiting what we as advertisers pay per click. Shouldn't this work alongside the law of supply and demand? If you are an idiot and want to spend your money unwisely, shouldn't some of Darwinian play come to fruition? After all, it's survival of the fittest, and if you don't convert, you will run out of money quickly. I just don't see ANY reason for bid caps. The only person they benefit is the bidder who is grandfathered in. If anyone else has a valid reason for bid caps, I'd like to hear it.

Full disclosure here - I know Callback and his situation, and in that situation it makes sense to bid more than $100 per click. You don't need to know the industry (but it wouldn't be that hard to figure out), but you do need to know that there already 5 people bidding max in this space - and making money off of it. The problem is, by bidding the max, the best position he can get is 5. That's not even good enough for syndication.

#12 Respree

Respree

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 5901 posts

Posted 13 August 2004 - 11:37 AM

This is my suggestion. Call Overture and just ask them - 888-811-4686.

Tell them you're a major corporation prepared to spend more than $100 a click and they will connect you with a sales ("Diamond") representative who should be able to help you. Apparently, they have two sales departments; one the small guys and one for the big boys.

I just spoke to them trying to find out the answer to your question, but was unfortunately connected to a $8/hr. clerk who was only guessing and speculating, like us.

#13 tonywright

tonywright

    Unlurked Energy

  • Members
  • 3 posts

Posted 13 August 2004 - 12:14 PM

Actually, talking to Overture has been done. Overture says it is an "upper management decision."

I think what Callback is trying to do is muster support from the SEM community for eliminating the bid cap . What I am seeing is that this is only an issue for a very small percentage of us - but in theory, I'd like to see the SEM community support the removal of bid caps. They don't seem to help anyone but the person in the top position.

The only other reason I see that Overture (or Google) would be reluctant to eliminate bid caps is that many SEMs will cry that this is a greedy move on the PPC engines part to get more money. I don't view it as that at all, but more along the lines of a service to advertisers and a way to even the playing field. I'd like to hear everyone else's thoughts.

#14 Respree

Respree

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 5901 posts

Posted 13 August 2004 - 12:22 PM

The impression I got from Overture was that there is only a miniscule percentage of customers who reach this cap, so they don't consider it an issue. Given their large customer base, I would imagine it would take thousands of unhappy customers to change their mind <speculation>.

#15 Black_Knight

Black_Knight

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 9339 posts

Posted 13 August 2004 - 01:23 PM

The impression I got from Overture was that there is only a miniscule percentage of customers who reach this cap, so they don't consider it an issue

It is certainly a tiny percentage - far less than 0.1 of a percentile point. The issues of fraud become a lot more serious at these high-spend levels too, meaning that there are extra concerns to be addressed, higher risks of being sued for even one fake click, etc.

I've worked in both the gambling and adult industries online and still have never seen a case where spending $100 per click was not missing the entire point of PPC. I got some great gambling terms only last month for under $2 per click, which are currently giving a 30 percent conversion rate.

Which of us is missing the point? Perhaps neither. Yes there are industries where you can still make great profit at $100 per click - but an expert in PPC could get the same traffic levels and quality for $10 in almost any case (I can only imagine cases where this might not be the case having never seen them). That's ten times higher ROI, and that's my point.

#16 tonywright

tonywright

    Unlurked Energy

  • Members
  • 3 posts

Posted 13 August 2004 - 01:34 PM

BlackKnight - while I understand what you are saying, let me be perfectly blunt - there is one keyword that will convert significantly. There are very words in the space. So while I respect your opinion, I still think you are missing the point.

#17 Respree

Respree

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 5901 posts

Posted 13 August 2004 - 02:06 PM

I can see both points. Let's look at Overture's for a moment.

What possible reason would they turn down revenue? Most people, looking at the surface, would conclude they're not very smart for putting a cap on bids.

The only logical business reason is risk. As Ammon mentioned, the probability of fraudulent clicks are very likely to be the risk factor here. Overture has almost certainly run the numbers of what it would cost to investigate the potential or develop systems that would aid in this investigation and have concluded that the risk of loss outweighs the potential for reward. That's how I would look at it if I were them.

#18 SpyderMan

SpyderMan

    Unlurked Energy

  • Members
  • 3 posts

Posted 14 August 2004 - 10:29 AM

Hi All

I'm new to this list, I usually never post on forums, but decided to share some experiences here.

At one stage, the Overture cap was $50/click and I was authorised to bid up to this level for my client.  We used to max out often, eventually Overture lifted the bid level to $100. If enough volume was placed at the $100 cap, then essentially they would increase.

The reason the cap is actually in place is to prevent customers from inadvertently bidding $500/click.  So within reason, they don't believe anyone will reach $100, if this becomes a common practice - it will be increased.

You might be asking how was it possible to pay this much per click?

Well, if you understand your traffic and are able to build targeted landing pages, conversion rates on certain words can be as high as 15-20%.  Sure, that is a customer acquisition cost of $250-$300, but there are some industries that operate within that band.

In addition, Overture's Diamond team are always happy to review your "suspicious clicks"and in some cases we received massive rebates for fraudulent clicks.

In short:

1.  Ensure that the traffic that you pay high prices on is very qualified, high converting and your landing page captivates your customer and he will intuitively understand how to purchase/become a customer with you in 1-2 clicks.  (i.e. Ensure a VERY short order/conversion path).

2.  Watch all your clicks closely and try to spot similar IP/Cookies/MAC addresess from users clicking your links.  User software from companies like Direct Response.

Regards

SpyderMan

#19 BillSlawski

BillSlawski

    Honored One Who Served Moderator Alumni

  • Hall Of Fame
  • 15644 posts

Posted 15 August 2004 - 07:47 AM

Hi SpyderMan,

Welcome to the fourms. We're glad that you decided to join in this conversation and share your experiences with us.

The historic look at overture's caps and the insight into how those higher bids should be viewed and monitored is very much appreciated. Thank you for those.

#20 AussieWebmaster

AussieWebmaster

    Ready To Fly Member

  • Members
  • 19 posts

Posted 16 August 2004 - 05:48 PM

I keep hearing this Diamond team... I am spending serious numbers and only am a Platinum customer... guess Diamond is for people who also want Overture to help with inplementation etc.



RSS Feed

0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users