PPC as an Economic Forecaster

[cline]

The long-run pattern I've seen in PPC is for the number of bidders to be ever increasing, and the amounts the bidders will pay to drift upwards.

However, last week I began to notice an opposite pattern in the PPC competitive activity for one of my clients, a UK B2B services company. This pattern has continued now for nearly a week.

Only once before have I seen a pattern like this. It was during the early months of 2001 with a campaign for a US-based staffing company. It coincided with a rapid downturn in their business, and a consequent termination of nearly all of their advertising activities (bye bye SEO guy :( ).

Since the PPC markets are very fast moving and sensitive to changes in business conditions, does anyone here think that they are a useful for business forecasting? My instincts say they are.

Is anyone else seeing a recent change in PPC competitive activity (esp. anybody dealing w/ B2B in the UK)?

[Mort]

Hey Cline,
Funny to see your comment... I just noticed the same thing this morning.

Many of the highest bids in my industry hover in the $8 - $15 range. However, when I came in this morning, 2nd place was a quarter of what it has been.

Is it economic uncertainty with the situation in Iraq? Or is it just a mid-week hiccup and everything will be back up in the usual range tomorrow?

Mort-

[Jeffgroovy]

I have seen a serious drop in what I'm paying for ppc services. It has been fluxuating up and down drastically over the last few weeks, but as of the last few days I've seen the price cut in half. Within the industry I deal with the most I ever pay for a top spot is about 2 bucks, and now I'm paying a buck or less for all my top terms.....very interesting indeed, but mostly all I can say is WAHOO!!!!!! I love it.

[SusyQ]

same thing happening in my world, most of my competitors have either dropped their prices down or just dropped off completely, which I like because now I actually have a chance in the most competitive keywords.

[cline]

I just reviewed the click counts and CPC figures. The effect is interesting. Clicks are definitely up due to reduced competition. But, counter-intuitively, CPC is up too! Why? The reductions in competitive activity are coming on the more-highly bid terms. Therefore the extra clicks are coming in on the more highly bid terms. Even though on average the bids on the most costly terms are down, they're still on average more expensive than the rest of the campaign.

So, counter-intuitively, less competition means higher advertising costs.

But you do get the traffic. :cool:

[SusyQ]

good analysis, puts things into perspective.

I still feel better at getting more traffic too :D

[esavvy]

I have noticed a drop across the board of PPC costs, also. Competition is down - but I am leary that this is not a good thing. This could be related to sales "closes" over the next few months. Traffic is great - but the bottom line is .. it has to convert.

[Jeffgroovy]

PLEASE IGNORE THIS REPSONSE IT WILL CAUSE ME TO PAY MORE:
I've been adding terms like crazy to overture accounts. I'm netting up a bunch of cheap traffic by finding the most relevent terms and all their variations. One day I tell you prices are cheap. I wake up Monday morning and they are high. I'm no longer going to make comments about PPC prices.

PLEASE DON'T READ THIS EXTRA SECTION IT WILL CAUSE YOU TO MAKE MORE MONEY WHICH WILL IN TURN CAUSE ME TO SPEND MORE:
A tip for the AdWords users. Create an add for each key word, that way you will have adds that are very very specific to your key words like you can do in Overture. It also has a side benefit of giving you the ability to control the maximum price your willing to pay per key word. It's takes some setting up investment of your time, but it's much more effective. I'm sure you all knew that already, and I'm preaching to the choir.

[cline]

Looks to me like this blip was due to uncertainty associated with the war. The competition has been resuming advertising. However, it seems that bidding is more conservative than it was before the war.

[Jeffgroovy]

I agree Cline, I have seen a significant drop in prices since the war ended, but my overture bill has been consistantly going up from what I believe is a surge in traffic caused by the time of year we are in. Which makes sense due to the nature of product sold from this particular site.

[PeopleSpaces]

This may have also been caused by budgets. Many PPC now permit you to set a monthly budget. When it's gone, you're gone. This happens frequently at month end.

[ihelpyou]

Or, surges in clicks may be because of fraud or Scumware that Overture partners with. :)

[Jeffgroovy]

I'm going to have to agree with you Doug. I recently wrote and email to overture and requested an investigation for what seemed to be massive amounts scummy clicks. The outcome was awesome. Overture refunded my client's account about a weeks worth of clicks.

[Webmaster T]

Yes doug, you're right on, but it doesn't seem to be just Overture all affiliates of the main distributors are, from what I've been finding, of dubiopus quality! The only real pre-requisite for becoming an affiliate is a warm body and I'll bet if you look closely some don't even have that!

Overtures targeting seems non existent. For instance the client has the word world in their name they are getting a number of clicks from affiliates of majors on these. Does anyone have any idea how to stop this other than dropping Overture all the smaller ones like sprinks have already been dumped.