I had a not so nice encounter with a paid search company called search rank results ( http://www.searchrankresults.co.uk ) next to the fact that these people are severely unpleasant to deal with, they try to trick small companies in paying way more for their advertising then needed. To challenge them I asked them to proof their case and yes they proofed that they can get someone at number 1 in Google’s Adwords (my nephew of 12 can do that as well) but they didn’t proof that they give a better alternative then doing the advertising yourself. The way that these people get you on number 1 in the adword list for 1 keyword or phrase is the following:
They charge between £300 and 800£ per month plus setup-fee for £99 to get you on number 1 … so what do they do?
Suppose you have a phrase like “buy flowers online” for which they wanted to charge £800. According to the Adwords interface you can get on number 1 for £1 and that will show you ad on Google search properties about 2900 times per day in the active month of February (in January it was around 1000). The average Click Through rate on Google is between 0.7% and 2.5% (Own observation). Lets take the positive number: 2.5%. That will deliver you 73 clicks. Most eCommerce sites have an conversion rate of about 2% but let us pretend we have a good site and we have a conversion rate of 3%. That means that you will make 2.1 sales per day. That ads up to 65 sales per month, assuming you sell every day of the month at the same rate. So you have to make at least £12,3 on each individual sale to break even.
In other words: when you have a very good site with extreme high conversion rates and Google has a high Click Trough Rates, then you might break even if you make £12.3 gross profit after you have packages and send the products.
When you use more realistic numbers the results even worse. If you have a CTR of 1% and a conversion of 2% (% which are common in ecommerce) then you end up with 0.6 sales a day, or 17 sales a month. You must have a profit of £47 per sale…. I don’t want to be negative but a profit of £12-47 only to break even is for most etailers a bridge too far.
So please please do your calcs before you say yes to traders like this.
Peter
Peter Bakker said,
May 27, 2010 @ 7:56 am
Update: After I informed Google about their practises Google withdrew the accreditation of this company
Update 2: After 3 weeks I received a letter that the “contract” between Search rank results and me was cancelled….end good all good, but I hope people are careful in choosing their SEO / adwords partners: there are a lot of sharks out there!