$15 per click is madness!

[Artashes]

I've noticed the rate for being listed as the number one search result for certain keywords on Overture reach $15 per click.

For example, the top 5 advertisers for "web hosting" keyword pay up to $7-8 per click - how is that EVER profitable or at least ever going to be even with revenues?

Best,

[William]

I don't think they are thinking, that could never pay off. That is a ton money wasted I think.

[kunta]

I think so to.. There is no point paying $7 per click especially since people will click on it.. then click on someone elses.. Its just throwing money down the drain.

[Christian_SEO]

Actually, there are those to whom it seems to be worth it. Those are companies that have large advertising budgets to burn. If they can get a good conversion rate, it can pay off for them.

It just depends on how many clicks get them a customer and what that customer is worth to them. How much is a hosting customer worth to you per year?

Well, if a hosting account is $6.95 a month and it takes 10 clicks to get one customer, then it's going to take 10 months just to break even.

However, if you get $29.95 a month for hosting, it's going to take less than 3 months to break even. This of course is not taking into account any other overhead for having the customer.

Yes, it's insane to me to, but you can see how it can make sense to some people. But also if you look at Overture and compare it to other forms of advertising where you have to spend money, it may actually be cheaper overall in the cost-of-aquisition...

Thanks,
Christian

[seobook]

it is all about cost per customer acquisition and the value of a customer. I have seen mesothelioma at $100 on Overture.

[Christian_SEO]

I can confirn the $100 a click insanity at Overture. I have a client that is in that game...!

I also found that Google has removed their $50 bid limit as well. I'm not sure what the top end is but it may also be $100 if not more.

[newsguy]

There are hundreds of keywords that go well beyond $15 per click. :) Overture has at least 5 keywords that are going for $100 a click.

It might seem insane, but think about it from the "total value" standpoint. If, on average, $10,000 dollars is profited over the life of a customer, then paying $100 a click is well worth the money if the conversion rate is good.