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PPC – Paying for Instant Success
The rapid growth of PPC has brought with it an influx of different markets and industries looking to get a piece of the action. Unfortunately with this increase in competition, like any industry, costs will go up to secure the prime advertising positions. CPC's are going up and campaigns now more than ever need to have increasing quality score to counter these growths. Quality score is googles reward for advertisers. They want users to be served for exactly what they are looking for. The more relevant your ad text and landing page to you keywords the better quality score your keywords will achieve over time In the battle for ad position, newcomers are pitted against their competition that already have established campaigns. Starting from scratch means no quality score, this takes time to increase and build as the campaign becomes more established. Therefore if an advertiser wants to appear at the top of the rankings then they are going to have to pay through the nose for it. For an established accounts that mite be paying 10p a click to achieve top 3 positions, a newcomer may have to pay more than double to achieve the same. This means a higher budget commitment for the company. In essence, it’s important for newcomers to PPC to understand that being able to reach top positions on a consistent basis requires time and a little patience. The only real quick route to the top is to pay way over your competitor’s bids. The build up of quality score is something that shouldn’t be underestimated, however, it’s estimated that this can take up to 2 weeks to start having an effect on the cpc’s. At Click Consult, we estimate to be able to reduce your cpc’s by 20% after two weeks of the quality score being built up.
It’s Official – Google Is A Cannibal!
Cannibalisation (as a business strategy!) has many success stories. Nestle cannibalised sales of their original Kit Kat chocolate bars when they launched Kit Kat Chunky. Gillette cannibalised an entire range of shaving products when they launched the Mach 3 brand. Starbucks, McDonalds, Burger King, Subway and many more all cannibalise their own franchises when they open a new outlet within 100 metres of an existing one. So why are so many multinational corporations fine young cannibals? Surely 1 fast food restaurant or coffee house would be more cost effective than 2 every 100m. Why buy twice as much land in expensive urban areas? And why buy twice as much machinery and hire twice as many staff? Chief Executes haven’t gone mad. Under the umbrella of one company name, new brands/franchises eat into the revenues of old brands/franchises, knowing that overall – and ‘overall’ is the key word here – sales will increase. For example, out of 100 loyal Kit Kat customers, 50 people prefer to eat a Kit Kat Chunky. By itself, Kit Kat Chunky sells 100 bars. Although 50 fewer old Kit Kats were sold, Nestle sold 150 chocolate bars overall – 50 more than if the original Kit Kat had been the only item on sale. So how is Google feasting on the flesh of its own? You may have seen the Ask (formerly Ask Jeeves) adverts on television recently. Ask is a rival search engine to Google, so you may ask (no pun intended) two questions: (1) Why is Ask part of Google’s search network at all? (2) Why is Google spending millions promoting Ask on TV? Again, the answer lies with the Kit Kat maths. Let’s say Google has a 65% market share for all online searches. After its expensive ad campaign, Ask steals 5% of this, but commands 10% of the market in total. This gives Google and Ask combined 75% of the market. By itself, Google would have only had 65%. Its official – Google is a cannibal!
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