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Too Much Traffic Causes Accidents

Posted on June 4, 2003


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Too Much Traffic Causes Accidents
By Rosalind Gardner

While reviewing my pay per click listing expenditures at Overture this past week, I was absolutely shocked to see that the cost of one account had more than quadrupled a few days earlier.

I didn't recall that my product sales were unusually high that day, however. On review, I saw that my sales were almost double the average number, but nothing extraordinary - and certainly not four times greater.

It took me a little while, but I finally figured out what happened to cause this huge spike in traffic and my advertising costs that day.

On one hugely popular keyword that receives several million searches at Overture in any given month, I usually try to maintain the third position, as opposed to the first. Past experience has taught me that the third position has a much better conversion to sales rate than the top spot.

In order to get and maintain a third place position, I bid 36 cents, which was just a penny lower than the second highest bidder.

Bidding in this manner flies in the face of conventional pay per click strategy, which suggests that I should bid one cent higher than the next lower bidder, or 24 cents in this case. However, the conventional strategy allows the competitor in the 4th spot to raise their bid by just 2 cents to regain his or her third place standing. Using my method, he'd have to bid thirteen cents more to gain placement above my listing.


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Also, by using Overture's Auto bid feature, my cost per click will only be one cent above the maximum bid of the next highest competitor. So, even with a maximum bid of 36 cents, I will only pay 24 cents per click as long as the guy in the fourth spot stays at 23 cents.

That's where my problem began. The other bidders didn't keep with my game plan.

Bidder Number Two dropped out of the game entirely, and Bidder Number One reduced his bid to 35 cents. This put me in first place, paying a hefty 36 cents per click.

That might have been OK if the number of clicks I received that day had remained the same. Assuming an average of 100 clicks per day, my cost to advertise would have gone from $24.00 to $36.00 for the day. A month as "Top Dog" would have cost me an additional $180.00. A good lesson - not to be repeated.

Unfortunately, in this case, all that talk you hear about the top position receiving considerably more traffic than those positioned lower down is true. Actually, the percentages bandied about in the pay per click promotional material is perhaps a little low.

I didn't receive just forty percent more traffic for the day, I got four hundred percent more traffic for the day.

Whether your advertising budget is tens, hundreds, thousands or even tens of thousands of dollars per month, errors like that can have a significant impact on your business if not caught in a timely manner.

I'm just lucky that the original top bidder missed his high traffic volume and took back his top spot, sending me back to my rightful, less expensive placement the very next day.

So, stay alert! While using pay per click engines is a great way to get traffic to your site, inattention could result in a costly 'traffic accident'.



About the Author

Rosalind is a recognized expert of affiliate marketing. Her recently released ebook, the "Super Affiliate Handbook: How I Made $736,797 Last Year Selling Other People's Products Online is receiving rave reviews throughout the I-marketing community. Check it out at: http://superaffiliatehandbook.com



 

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