In a recent analysis of keyword bidding practices, it was discovered that many advertisers are significantly overpaying for their keyword positions. This overpayment is not only unnecessary but also results in substantial financial losses. By simply outbidding competitors by a single cent, advertisers could save a significant amount of money and still maintain their desired keyword positions.
Using the GoodKeywords tool, a shocking discovery was made about the bidding practices of many advertisers. Despite the fact that it only takes a single cent to outbid a competitor, many are bidding far more than necessary to secure a higher position. This overpayment is not only unnecessary but also results in substantial financial losses.
To illustrate this point, let's examine the bidding practices for four specific keywords:
Domain Hosting: The top bid was $6.02, while the 40th bid was only $0.33. If everyone had bid just one cent more than their competitor, the top bid would have been $0.74. This means the top bidder overpaid by $5.28 per click, resulting in an overpayment to Overture of $111,038.40 per month based on 21030 clicks.
Bulk Email Marketing: The top bid was $2.34, while the 40th bid was only $0.05. If everyone had bid just one cent more than their competitor, the top bid would have been $0.46. This means the top bidder overpaid by $1.88 per click, resulting in an overpayment to Overture of $28,186.84 per month based on 14993 clicks.
Email Marketing: The top bid was $5.82, while the 40th bid was only $0.32. If everyone had bid just one cent more than their competitor, the top bid would have been $0.73. This means the top bidder overpaid by $5.09 per click, resulting in an overpayment to Overture of $164,386.64 per month based on 32296 clicks.
Bulk Email: The top bid was $4.99, while the 40th bid was only $0.14. If everyone had bid just one cent more than their competitor, the top bid would have been $0.55. This means the top bidder overpaid by $4.44 per click, resulting in an overpayment to Overture of $179,478.12 per month based on 40423 clicks.
In total, for just these four keywords, advertisers overpaid Overture by $483,090 in a single month.
This analysis clearly shows the need for smarter bidding practices. By using the right tools and applying common sense, advertisers can optimize their keywords without throwing money away. It's time to stop overpaying Overture and other pay-per-click search engines and start keeping more money in our pockets.
For more information on keyword bidding and optimization, check out these resources from Moz and WordStream.
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