Pay-Per-Click Search Engines: A Really Bad Investment

What was once such a good thing is now a rip-off and a sham!

Im talking about pay-per-click search engines, and how theyve become a really bad investment!

There are two reasons for the deterioration of pay-per-click search engines: high bid prices and out of control click fraud.

A few years back, you could get popular keywords at a halfway decent bid price. Nowadays, even moderately popular keywords are ridiculously high.

How high Well, let me give you an example, using the most popular pay-per-click search engine: Overture.

Lets take the popular keyword phrase, "home business."

At the time this article was written, Overtures top bid for the keyword phrase "home business" was an exorbitantly high $2.28. Just to get on the first page, it would cost you $0.61, which would place you last at number forty.

Now lets just delve inside the numbers for a moment, shall we Im not going to even bother breaking down the number one bid price, because quite frankly, its obvious the top spot is reserved for and controlled by the high-rollers.

So, lets break down bid number forty. The bid price of $0.61 means that for every 100 visitors Overture sends to your website, its going to cost you $61.00. Now, heres where the numbers really get interesting.

According to the so-called experts, a decent conversion ratio is right around one percent. In other words, one out of every one hundred visitors to your website converts to a sale. I happen to know for a fact that most websites dont even come close to converting one percent. However, thats a subject for another day.

Using the very generous one percent conversion ratio, heres the problem. Unless youre selling a big-ticket item and making $100 or more per sale, its impossible to make any real money with pay-per-click search engines. You just cant do it!

For example, if youre selling a $20 e-book and youre paying $61 to get one hundred visitors to your website, with a one percent conversion ratio, that means your website is making a measly $20 for every one hundred visitors. That leaves you $41 in the hole. Even, if you were selling a $50 product, youd still be $11 in the negative.

And even if you cut the bid price in half and made it $0.30, theres still another problem. Its called click fraud and its a major problem among all of the pay-per-click search engines.

In a nutshell, click fraud is what occurs when someone fraudently clicks on your ad over and over again, without any intention of responding to your offer. Click fraud hurts advertisers by driving up the cost of each click because many online advertising programs adjust the price of each click based on the popularity of a particular keyword and the number of competing advertisers.

And depending on how popular your keyword is, it can take just a few minutes to register hundreds or even thousands of clicks. Click fraud can quickly deplete your pay-per-click account and leave you with nothing to show for your expentiture.

At the present time, the pay-per-click search engines seem to be powerless to stop click fraud. To their credit, Google even admitted as such.

In a recent filing to the Securities and Exchange Commission, Google acknowledged, "We are exposed to the risk of fraudulent clicks on our ads. We have regularly paid refunds related to fraudulent clicks and expect to do so in the future. If we are unable to stop this fraudulent activity, these refunds may increase. If we find new evidence of past fraudulent clicks, we may have to issue refunds retroactively of amounts previously paid to our Google Network members."

In conclusion, because of unreasonably high bid prices and rampant, out of control click fraud, I consider pay-per- click search engines a really bad investment, and recommend you stay away from them!