Issue 15: Another Crucial Reason Why Pay-Per-Click is Bad Business

Did you miss Issue 14? Titled: The Secret to Becoming Your Own Copywriting Factory
Click here to read.

Well, folks, the news continues to get worse and worse about pay-per-click marketing being a viable method for making sales and building your business. Before I get to a crucial new piece of information that should rock anyone considering using pay-per-click, here’s a quick recap of the shortcomings of PPC I’ve covered in earlier issues:

bullet PPC campaigns are extremely time-consuming to run properly. That’s why many companies use a service to run their campaigns — but that can be pricey.
bullet The rules keep changing — and the search engines don’t want you to know what those rule changes are. If you could lock in top positions, all searches for a given key word would always produce the same results. That would be death for the search engines, as they must keep things fresh in order to keep people coming back.
bullet The rules are different for each search engine. Think you’ve mastered Google’s rules? It won’t help you with Yahoo, MSN, or any of the other search engines. If you enjoy tearing your hair out in clumps, you’re a natural for enjoying PPC marketing.
bullet The biggest drawback of all — the leads you get are as unqualified as they come. So you’ve paid top dollar for keywords, written some killer ads (sure, if you think you can write a killer ad in about 15 to 20 words, I’ve got some lovely swamp land to sell you), and created dynamite landing pages. What do you get for all this time, effort, and expense? Very little. Because people who click rarely buy.

Think about this, using a technique I call “Marketing to Yourself”. How many searches do you conduct in an average day? Let’s estimate 10 searches. Multiply that times 30 days in a month, and conservatively, you’re searching 300 times each month. Now — how many times out of those 300 searches do you actually buy something? If you’re like most people, the answer is very few or none. So what makes you think that all that traffic clicking on your PPC links is any different than you?

Another crucial reason why PPC marketing is bad business

Another compelling reason you might want to reconsider using PPC is the “400 pound gorilla in the room” that none of the PPC experts seem to want to talk about. I’m referring to click fraud — a massive problem that is on the rise and can’t be stopped.

In the May 11, 2006 edition of Technology Review, the ugly facts are laid bare for all to see. Among these crucial facts is the report that Google just agreed to pay $60 million to settle a click fraud lawsuit.

That amounts to $4.50 for every $1,000 Google took in on PPC in the past four and a half years. I’ll come back to this figure in a moment and show you why this is so important.

The fact that Google is even admitting that click fraud is rampant, in fact uncontrollable, is huge. For years, Google and all the other major search engines have essentially turned a blind eye to the issue. The article even quotes sources who feel that the search engines are less than helpful in getting click fraud issues resolved and payments refunded. It quotes one major user’s description of a vague message he received from Google telling him that their internal investigation showed that the click fraud didn’t exist and he wasn’t billed for it. However, they provided no data to back up their findings.

Here’s an important point. I’m not singling out Google and that wasn’t the intent of the article in Technology Review either. The fact is, Yahoo is being sued in the same court as Google and click fraud is out of control on every search engine. The article focuses on Google simply because it commands the lion’s share of PPC revenues.

Now, let’s get back to why the refund of $4.50 for every $1,000 PPC revenue generated is so important. There’s a disturbing secret built into this figure. I’m going to reveal this secret in just a moment, but first…

You’ve got to hear this if you’d like to profit with information products

If you’ve ever considered creating and marketing your own information products, you’ve got to hear an 8-minute interview I just did with one of the members of my info products mentoring program.

His name is Graham McGregor, and with hardly any experience, he sold over 9500 copies of his first information product within a few weeks of completing my materials. He already has even more orders and is using a very simple twist to boost his sales to 100,000 copies or more.

Don’t miss this remarkable 8-minute interview. You can listen to it — and get more details on my Information Products Master Course if you’d like — at:

The real facts on click fraud — it gets even uglier

So let’s get back to that figure that Google has agreed to pay out — $60 million to settle the lawsuit, which amounts to $4.50 for every $1,000 its customers spent on PPC. If you convert that to a percentage, that means Google is admitting that click fraud occurs on less than one-half of one percent of all clicks.

However, independent studies quoted in the Technology Review article assert that click fraud occurs for between $100 to $400 of every dollar spent on PPC marketing.

Do you understand the magnitude of that statement! What it tells you is that 10% to 40% of all the clicks you get are bogus. When you factor in the cost for all the time it takes to develop and manage your PPC campaigns — along with the fact that the vast majority of the traffic you get is completely unqualified — you can begin to see why I don’t advocate using PPC at all. Not for my own business, not for my clients, and not for you.

What can you do about click fraud? Nothing!

There are a lot of people who feel that the search engines aren’t exactly bending over backwards to eliminate click fraud. After all, as the Technology Review article states, “The shady activity produces revenue for Google, Yahoo and a long list of Web sites that display the ads because the clicks trigger sales commissions even if a referral does not produce a sale.”

I can’t say that I really agree with this line of thinking. After all, if PPC is deemed to be plagued with fraud, it would only hurt the search engines. Once people decide their billings are unreliable — that is, if they ever decide this — a lot of PPC revenue will dry up. The damage would be so extensive that there can’t be any reason for the search engines to want click fraud to continue.

The greater problem, and what makes this unsolvable, is that click fraud is much like spam. The people perpetrating the fraud are profiting from it, and they’re very clever about it.

Your competitors may click your links hundreds of times in an attempt to raise your costs and drive you out of the market. Companies that make their money through Adsense and similar programs from the other search engines can click their links on other sites in order to boost their revenue. And these activities can be easily cloaked.

Like spam, click fraud isn’t about to go away soon — if ever. There are far more reliable ways to drive traffic to your site. And when you factor in the rising cost of good key words along with click fraud, there are many more cost-effective ways to drive traffic to your site.

My conclusion is that PPC is simply bad business. Use it at your own risk.

Copyright © 2006 by Bob Serling All rights reserved