What is the average clickthrough rate for PPC ads on Google, Yahoo, Microsoft Search?
I'm trying to forecast revenue for an online business supported by search engine advertising and contextual advertising with a pay per click model. I have the average keyword prices broken down by vertical but I would like to know the average clickthrough rates to model the potential revenue.
- memetraderLv 61 decade agoFavorite Answer
It is not possible to model the CTR because it can be any value from a low of less than 1% to as high as 30%.
It will vary on many factors like the sector and the creative (ad) itself.
Not only that but if you have a CTR of 2% with a converstion rate of 10% it is better than a higher CTR of 3% with a conversion rate of 5%.
- Wise_ElderLv 41 decade ago
This is too broad a question as click through rates depend on a wide variety of factors, none of which can be measured independently on each search engine. However the conversion rates have been studied and a recent study showed that AOL has the highest conversion rate followed by MSN, Yahoo, then Google. Maybe this is what you are looking for.
- SarahLv 44 years ago
- 1 decade ago
To Place Ads, Google Searches For Best Bidders
How fitting that Google is considering selling stock to the public in an Internet auction.
Google, you see, isn't just a search engine. It is also a giant, around-the-clock Internet auction, selling advertising on its own pages and on thousands of other Web sites to the highest bidders.
The ad auctions conducted by Google and its chief rival, Yahoo's Overture division, are the biggest story of the year in Internet advertising, helping revive an industry that some had left for dead after the dot-com bust of 2000.
"From almost nothing two years ago, search [advertising] is now a $1.5 billion-a-year industry, growing to $7 billion by 2007," Safa Rashtchy, an analyst at U.S. Bancorp Piper Jaffray, said at an advertising conference in Alexandria last week.
Google and Overture took a big leap this year, transforming themselves into ad agencies when they extended their auctions for ads appearing in search results to include -- for the first time -- ads appearing at the bottom of news and feature stories. In its "AdSense" program, Google auctions advertising space on large Web sites run by The Washington Post, the New York Times, USA Today, National Geographic and a ton of smaller publishers. Overture launched a similar program it calls "Content Match."
The system works like this: Advertisers bid the maximum amount they are willing to pay to have their ads appear beside search results, news stories or other kinds of Web pages related to keywords -- "Hawaii vacation," say, or "cashmere sweater." Only the top three or four bidders get their ads shown in premium spots.
The jury is still out on whether these "contextual" ads will be as successful as ads married to Web queries. With both kinds, advertisers pay only when someone clicks on the ad. With contextual ads, the search services share revenue with the Web sites on which the ads appear.
Industry analysts have been skeptical of contextual ads, noting that fewer people appear to be clicking on Google's ads when they appear, say, at the bottom of a USA Today story than when they appear next to search results. That may be because Web surfers tend to have a tighter focus when they're searching for something than when they're reading news.
Yet publishers are enthusiastic about Google's tiny text ads because they say more people seem to be clicking on them than on flashy Internet banner and button-size ads.
Perhaps one in 300 people who see a traditional banner ad click on it, and more often it's one in 1,000. By contrast, popular Google ads can trigger one in 20 people to click, though more typically, it's one in 100, according to publishers.
"We are making twice as much money on the Google ads as we did on any other advertising we ran in the [same] slot," said Erin Martin, who oversees Google's ads at Web reference site Infoplease.com, the online version of the "Time Almanac."
Robert Hoskins, who runs a site in Gilbert, Ariz., focused on the high-speed wireless-data industry, said Google's AdSense program has allowed his site to rake in an extra $3,000 a month. He spends a lot of time selling other kinds of ads, too, which generate about $6,000 to $12,000 a month.
By contrast, Google's ad program is labor-free. "It takes us five minutes to add a script and Google does the rest while we sleep," said Hoskins. "The Google script automatically populates the pages with the right type of advertising."
Michael Sullivan buys Google and Overture keyword ads to promote his Internet furniture site, RiverHouseTraders.com. Since he started buying the ads two years ago, he said, traffic has quadrupled. He credited his nearly $1 million in sales last year to the success of the 300 or so "keywords" he has purchased at Google and Overture -- including "wrought iron bar stools" and "wrought iron beds." For "wall mirror," a term he often bids on, Sullivan said he usually has to pay 25 to 30 cents per click to achieve premium placement.
That's typical, according to a report prepared by Piper Jaffray's Rashtchy that estimated the average cost-per-click paid by advertisers is 29 cents.
Prices are rising as more advertisers sign up. Google reports it has 150,000 advertisers on board, while Overture has more than 100,000. Yahoo recently bought Overture, which pioneered the sponsored-search model, for $1.7 billion.
One big worry for participating publishers is mismatches between stories and ads. On washingtonpost.com this week, a sponsored Google link that said "Sell your San Diego home" appeared below a story about the California wildfires.
"I personally watch for this all of the time," said Christopher M. Schroeder, chief executive and publisher of The Washington Post's Internet subsidiary, adding that the staff removes inappropriate matches when they see them.
But Schroeder said more often than not, the sponsored links Google shows are relevant, such as ads for tickets to the U.S. Open matched with stories about Wimbledon.
Sheryl Sandberg, vice president of global sales and operations for Google, said the company worries about mismatches resulting from its automated targeting system. Google staffers write special filters, she said, to block offensive ads and keep advertisers from trying to capitalize on, say, stories about airplane crashes.
Another glitch has risen over trademarks. Google said it is appealing a ruling this month by a French court ordering it to block ads that exploit trademarked "keywords" that an advertiser doesn't own. The case arose when several companies, including airline EasyJet, bid on the trademarks of two French travel firms, including the phrase "Bourse des Vols." Google is facing a similar lawsuit from handbag maker Louis Vuitton.
The search advertising market, meanwhile, is heating up. Last week, Google bought a rival ad-targeting system, called Sprinks, from Primedia. It targets ads by predesignated categories. Both Google and Yahoo are experimenting with ways to map ads based on geographic data, too.
Last Thursday Google started offering advertisers the option of targeting ads by state or region, including the 210 designated marketing areas in the United States. Google's regional system, still in trial form, identifies location by looking at where a Web surfer is accessing the Internet, relying on each computer's Internet protocol address.
Already, rivals are scrambling to catch up. Microsoft Corp. announced this year that it is developing its own Web search technology, IBM Corp. has developed Web search for the business market that could prove to be a sleeper, and Amazon.com recently kick-started a subsidiary dubbed "A9" to develop its own Web search tools.
As Google prepares to become a public company next year, there is no telling which competitor might be lurking at the back of the Internet auction market, preparing to snipe a piece of its success.