Average cost of ppc traffic from intermediaries

Hello Rich,

The cost of buying clicks from intermediaries varies greatly. Can I ask which industry you're looking at? If it's finance then the clicks from a site like moneysupermarket may cost in excess of £2 - £3 ppc.  If It's travel (my area os speciality) you can pay between £0.17 on Cheapflights to over £0.80 on Kelkoo.

Contact me on my email if you need more info regarding the online travel industry.

Best wishes

Alasdair Cross

www.adprecision.net

On 16:11:08 30 December 2004 RichA wrote:

I am trying to understand very approximate benchmark pay per click costs.   My understanding is that for search engines the average ppc value is somewhere around 50p at present.

For traffic from an intermediary, such as a shopping engine or price comparator, how much  is a retailer advertising on that intermediary likely to pay per click on average?  Am presuming it will be significantly higher than the average search engine value due to the higher quality traffic from intermediaries with a greater likelyhood of conversion?  Does this data exist?  Even a percentage mark up or difference would be helpful.

Would be grateful for any  clues/guidance!

Many thanks

Hi Alasdair

Many thanks for the info.  I am looking at the consumer electrical goods industry.  I managed to find some useful info on NextTag which looks like for items such as Digital Cameras, TVs, Camcorders etc, one can expect to pay somewhere between $0.5 and $1.00 for clicks.

All the best and happy new year

Rich

On 16:37:27 31 December 2004 Yodey1 wrote:

Hello Rich,

The cost of buying clicks from intermediaries varies greatly. Can I ask which industry you’re looking at? If it’s finance then the clicks from a site like moneysupermarket may cost in excess of £2 - £3 ppc.  If It’s travel (my area os speciality) you can pay between £0.17 on Cheapflights to over £0.80 on Kelkoo.

Contact me on my email if you need more info regarding the online travel industry.

Best wishes

Alasdair Cross

www.adprecision.net

On 16:11:08 30 December 2004 RichA wrote:

I am trying to understand very approximate benchmark pay per click costs.   My understanding is that for search engines the average ppc value is somewhere around 50p at present.

For traffic from an intermediary, such as a shopping engine or price comparator, how much  is a retailer advertising on that intermediary likely to pay per click on average?  Am presuming it will be significantly higher than the average search engine value due to the higher quality traffic from intermediaries with a greater likelyhood of conversion?  Does this data exist?  Even a percentage mark up or difference would be helpful.

Would be grateful for any  clues/guidance!

Many thanks

Hi Richard

As I'm sure you're aware the consumer electrical goods industry is quite mature, and very competitive, online with all the big high street players very much involved. Also, as many of the products are viewed as commodities by customers, there is a much higher degree of price competition and sensitivity.

As a result the kinds of average click costs you mention are, although quite high compared with some sectors, about right. There will come a point, which has happened already in some sectors (e.g. DVD rental, gambling), where merchants realise they cannot afford to pay continually higher click costs AND still make a healthy margin. In this case retailers either have to pull out or face a short term loss in the name of market share. Many are pulling out, or waiting for the (inevitable) market correction, or letting their affiliates take the PPC risk for them.

I'm interested that you say that traffic from intermediaries such as price comparison engines is "higher quality traffic with a greater likelihood of conversion". We've spoken to a lot of retailers who would disagree with this. Yes, the user is probably looking to buy in the end (i.e. convert at a site), but a user referred from a price comparison engine is also a) less likely to be loyal (and therefore profitable) in the long term and b) is also more likely to shop around and buy on price, so may visit your site but not convert unless you have the lowest price. Some retails (like John Lewis) have openly stated their intention to move away from the likes of Kelkoo as they've found the customers that they get from those sources to be unprofitable. It's the same in financial services ('rate tarts').

Have you also considered the various forms of online advertising whilst doing the same click cost / ROI calculations? You might find that the ROI is better in some cases? Everything from advertising in relevant newsletters (higher click costs but good quality customers and high conversions) to buying excess network ad inventory at low rates - e.g. if you could buy as low as £3 CPM and got 0.3% click through you'd be paying £1 per click.

Ideally, of course, you'll know what you can afford to pay per customer acquired depending on the profile of that customer (which would include the source of acquisition) and, using web analytics, you'll know what sources are delivering what value of customer at what cost.

We've certainly noticed that, because of intensifying and sophisticated competition in the areas outlined above, there is currently more of a focus on natural search engine optimisation, improving the site itself to improve conversion rates (thereby reducing costs per customer acquired), improving brand metrics (to get the right kinds of customer and reducing the requirement to have to pay for clicks as they come to you direct), and much more of a focus on customer retention.

Ashley

On 16:11:08 30 December 2004 RichA wrote:

I am trying to understand very approximate benchmark pay per click costs.   My understanding is that for search engines the average ppc value is somewhere around 50p at present.

For traffic from an intermediary, such as a shopping engine or price comparator, how much  is a retailer advertising on that intermediary likely to pay per click on average?  Am presuming it will be significantly higher than the average search engine value due to the higher quality traffic from intermediaries with a greater likelyhood of conversion?  Does this data exist?  Even a percentage mark up or difference would be helpful.

Would be grateful for any  clues/guidance!

Many thanks