Issue 13: Why Pay-per-click is a Sucker’s Game

Did you miss Issue 12? Titled: A Response Boosting Secret
Click here to read.

In the March 6, 2006 issue of DM News, the lead article at the top of the page carried the headline, “Fluctuating Algorithms, Technology Keep Search Marketers Spinning”. The point of the article was major marketers are complaining that the Big 3 pay-per-click marketing sources — Google, Yahoo, and MSN — are making it increasingly difficult to predict the effectiveness of your search engine marketing.

No kidding! They just realized this now?

This has been going on since pay-per-click began. You see, the search engines DON’T WANT you to maintain your high rankings. If you could lock in a high position, the top 10 or 20 slots would always be the same. And sameness is death to search engines. They depend on your searches turning up fresh results every couple of days. If not, people will stop searching.

So to make sure this never happens, the search engines change their rules all the time. Worse yet, they won’t tell you what the rules are! This forces you to put undue amounts of time and effort into trying to keep up with all the rule changes, modify your campaigns, and make this bizarre process work in your favor.

Yet people keep paying for their clicks every day, despite the fact that the very source you’re paying is trying to knock you out of contention at every turn. That’s like paying for a space ad in a magazine and not knowing what month your ad will run or if it will ever run at all. Would you be willing to pay for space advertising on those terms? Of course not.

That’s the first reason why pay-per-click is the biggest sucker game going.

But hold on, it gets even worse.

Paying for your competitors’ success

If you think what the search engines do with their constantly changing algorithms and hidden rules are bad, try this on for size: they also encourage your competitors to succeed at your expense! You see, your competitors can purchase terms that include your company name, your products’ names, key employees’ names if they’re well known, and anything else they want having to do with your company.

So everything you’ve worked so hard to build — and invested your hard-earned money in — now becomes an asset for your competition. This means you’re directly financing your competitors’ success.

Plus, it’s even worse if your competitors have lots of affiliates. Because many of those affiliates will also bid on keywords that contain your proprietary information, driving up your costs for those same terms and using them to steal business from you.

Your competitors and their affiliates will also carefully watch what you’re bidding on and poach those terms as well. It isn’t uncommon for a company to be priced out of some of their best keywords when a competitor’s affiliates start bidding in mass on those terms.

There’s also the issue of click fraud. Let’s say you’re paying $5 per click on your most coveted keyword. Then one of your competitors affiliate networks decides to do you in and starts clicking on your ad over and over again. Yep, hundreds of people clicking your ad a couple times a day each — and every click gets billed to your account.

If a competitor wants to do you in, think about what 1,000 fraudulent clicks per month would do to you at $5 a pop! Now, in fairness, the big search engines go to tremendous lengths to prevent click fraud. But even so, some industry studies have shown that as much as 25% of all clicks are fraudulent. So it isn’t a pretty picture.

Now it’s interesting to me that the marketing trade journals, such as DM News, are starting to report on these horrendous facts. I’ve been preaching about them for years.

Even so, there is still a huge secret – the dirtiest secret of them all — that the trade magazines don’t dare touch. But you know I will.

I’ll tell you what it is in just a minute. But first…

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But here’s the interesting part. As good as those results have been, I recently stumbled on a new “stealth marketing” system for creating and selling information products that is dramatically outperforming everything else I’ve ever used. And I’ve just put the finishing touches on a home study program that lays out the entire system for people who are serious about making a fortune with information products.

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The dirty pay-per-click secret no one talks about

As bad as the news I’ve just told you about pay-per-click is, there’s one issue that the marketing trade journals won’t touch with the proverbial 10-foot pole. Why? Because they carry a lot of advertising from companies that offer PPC marketing services and they don’t want to offend them.

Since the marketing trade journals won’t tell you, and none of the PPC marketing experts seem to be willing to talk about this, I’m more than happy to blow the lid off this dirty secret. So here’s the biggest reason why pay-per-click marketing performs so poorly that no one will tell you…

Almost every person who clicks on your ad is an unqualified prospect with little or no interest in buying your product or service.

How can this be true — have I lost my marbles? Not at all. Just think about this for a minute. Let’s use one of my favorite marketing concepts, which I call “Marketing to yourself”.

What this means is that you are the yardstick to measure your marketing against. So let’s use you in this example. Now think about this – how many searches do you conduct on a daily basis? Five, ten, twenty or more?

For the sake of this example, let’s say you conduct ten searches per day. So that would be roughly 300 searches per month. Now how many items do you actually buy per month based on these searches?

When I recently posed this question to the members of one of my mentoring programs, the answer was a resounding silence. To make sure I was getting the right feedback, I asked the question again. More silence. So this group of very web-savvy business owners and entrepreneurs told me, that on average, they don’t buy anything as a result of all their searches. For the most part, they’re just gathering information.

Now consider the search patterns of a huge segment of the population. They’re at work, bored, or looking to kill a little time. So they go online and surf around. Maybe they go to Google, Yahoo, or MSN. Maybe they just click your ad that gets served up on some other site. Either way, they get directed to your site and you get charged for the click.

But what are they really doing? They’re just looking. They have no intention of buying anything. Plus, they may toggle back and forth between the search engine page, your ad and your competitors’ ads many times, clicking on your ad multiple times. Each click rings up another charge to your account, as many times as they click. Yet they still never have any intention of buying.

Conclusion

So here’s what it boils down to. The search engines do everything they can to take your money and prevent you from getting the position you want on their search pages. Your competitors and their armies of affiliates can buy terms based on your proprietary information — your company name, your product names and brands, your employees’ names, and more. They can also poach the terms that are most effective for you and price you out of contention. And click fraud wastes your money and your time when you ask for a refund and have to prove that fraud has actually occurred. Plus, the vast majority of people who click on your ads have no interest in buying your product or service.

Still think pay-per-click is marketing’s holy grail? Or is it really the Emperor’s New Clothes?

I say it’s nothing but a sucker’s play.

I know this issue is going to make a number of people angry. I’ll get a few emails from people telling me that they’ve made money with pay-per-click. And it’s true – some people do make money with it. But the vast majority of my clients tell me that they’re losing, or at best breaking even, with pay-per-click. And they’ve pretty much given up on it.

But to me, the more important point is that there are so many other ways to make money with your marketing that are more user-friendly and require far less time and effort — and that just flat out perform better — that pay-per-click turns out to be the biggest sucker play in marketing.

Copyright © 2006 by Bob Serling All rights reserved