The PPC Guy Who Saw The Credit Crunch Coming In September 2007
December 10th, 2008 by Click Consult
I remember the world of Pay-Per-Click (PPC) for keywords like “bad credit remortgage”, “loans for people with CCJs” and “IVA” about a year ago. I was the Account Manager at Click Consult who specialised in PPC campaigns for debt help companies. Back then, there was always some guy with a bit of money and a shoddy website who wanted to a PPC campaign to capture leads from people with poor credit.
As I wrote on the 25th of September 2007 …
It takes an average cost per click (CPC) of £2.56 to £3.84 to be in position 1 to 3 for the keyword “mortgages”. Add two letters to this word – “Re” – and you are going to need deeper pockets. For the keyword “Remortgages”, it takes an average CPC of £9.71 to £14.57 to get your ads in positions 1 to 3. Add two words in front of “Remortgages” and your wallet will really feel the strain. For the keyword “Bad Credit Remortgages”, average cost per clicks for the top three ads are between £17.28 to £25.93.
I also mused …
Could “IVA” be the most costly keyword in the UK? IVA is an abbreviation for Individual Voluntary Arrangement and is nothing more complicated than a person offering their creditors a repayment proposal that would enable the creditors to recover more money than if they chose to petition for bankruptcy. On the August 20th 2007, a click on the keyword “IVAs” with an ‘OK’ quality score rating cost £33.88 to be in an average position of 9.3 on Google.co.uk.
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At the time, I just couldn’t understand it. There was no logic to it. The more debt you were in; the more financial service companies were willing to pay for your clicks. To qualify for an IVA, you need to be in at least £15,000 worth of debt – and ‘IVA’ was the most expensive keyword of all! The more flimsy and precarious your mortgage plan, the higher the CPCs went. No one was interested in Google browsers with a steady income and a sound credit history, but rather everyone was clamouring for clicks from the irresponsible subprime crowd – deep in the red individuals on their third remortgage and with enough credit cards to play solitaire.
So as the credit crunch bites and the banking crisis spreads to the rest of the world economy, I think back to those clients – long gone now – who jumped on the “I want bad credit leads!” bandwagon. It’s simple common sense. Why did they throw so much money at people who had no money? What other outcome could they have possibly expected? Of course, at the time they were motivated by greed and the promise of riches from making poor people suffer as they struggled to pay astronomical interest rates. And now, through a recession … through rising unemployment … through higher taxes to fund billion pound bank bail outs … we are all suffering for their greed.
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Nice post. Finance keywords have definitely gone down in price, as to the most expensive keyword ever – “IVA” is certainly up there.
One point you raise…
“At the time, I just couldn’t understand it. There was no logic to it. The more debt you were in; the more financial service companies were willing to pay for your clicks”
This is because the reward for the advertiser is so great and the conversion rate so high. If I am looking for an average mortgage and I am good creditor I have a large choice over who I choose to borrow from – therefore the compulsion to convert is lower and I will shop around. A person seeking an IVA will be more keen to resolve the situation quickly and will have less choice over who lends them capital. Also the commission for the advertisers is very high.
I aagree with the notion that lending more money to people who owe exuberant amounts of money is counter intuitive and unproductive.
I wrote a post about high CPC’s here that might interest you…
http://www.ppcmanchester.co.uk/index.php/2008/11/the-most-7-expensive-ppc-keywords/