Microsoft Vista Software | Microsoft Vista Books | Linux Books | Ubuntu Books | Ruby On Rails Books

Thursday, December 15, 2005

Google Adwords

This article describes an interesting experiment with the Google Adwords service; in an effort to fine-tune the price per word, a mirror site was set up, paying a different price per word. I turns out the second site had to pay more in order to reach a similar click-through rate
From the article:
His old site with the same ads had been running successfully for a year paying at the relatively low rate of $0.10 per word (the AdWords minimum is $0.05 per word) and generating about 15,000 clicks-through per day. But for the new site, he started out paying $1.00 per word for exactly the same words. Based on everything he had read about AdWords (remember nobody actually SPEAKS to Google about these things -- the service is totally automated from Google's end), he expected his ad to move higher in the rankings and, hopefully, to make more sales as a result. And that's exactly what happened, though not to the extent that he would have liked.
Buying AdWords at $1.00 versus $0.10, his ads DID move higher on the page and his revenue was increased, though not by enough to justify going all the way to $1.00 with its associated higher cost basis.
All the while, of course, the essentially identical original web site was churning along, still entirely dependent on AdWords, still carrying identical ads for identical products as the test site, and still generating an average of 15,000 click-throughs per day.
Now it was time to drop the per-word price a bit on the test site to see whether he could increase his profit margins after paying too much at $1.00. So he set the new per-word price at $0.40 -- still four times as much as he was paying per word through his main site.
And his clicks-through dropped from 15,000+ to 1,200 per day

Read the whole article here

1 comment:

Anonymous said...

Cringley was contacted by Google who pointed out that the original site had a much longer and more established history and that would be the cause of the discouraging results.

True or False. I don't know, but it would make sense given that the black box that is google is better at placing ads for a site that it has a history on vs a site that it is still figuring out.