Digital Point Forums are a lot like the Mos Eisley Cantina, and in the words of Obi Wan Kenobi:
You will never find a more wretched hive of scum and villainy.
Sure, Han Solo is occasionally going to be hanging around, but on the whole, you’re more likely to meet Greedo or Jabba the Hutt. You’re also always going to see a lot of posts like this one that exemplify the naivete of a lot of people starting out in SEO, but assuming that they know enough to make a living:
Here’s the thing…
This is a person who has probably seen this photo of Jeremy Shoemaker holding an AdSense Cheque for $130,000 and decided that they can do the same thing, and that the easiest way of doing it quickly is to target the keywords that pay out the most on a per-click basis. It’s a fairly logical decision, aside from the fact that it ignores almost all of the reasons why AdSense payouts for particular keywords might be higher than others.
If someone is willing to pay out $50 or more per click for a user to visit their website, the chances are that it is a highly competitive term that they cannot economically target via other means such as SEO. In the UK, one such term might be “car insurance”, where according to Google, the average CPC via AdWords is£8.68 for an exact match term – although there are many other more expensive keywords that one could target.
In the UK, you can be pretty confident that every single website getting organic search traffic for the term “car insurance” is involved in some fairly aggressive SEO – not necessarily black hat, just aggressive. The market leader, MoneySupermarket.com has a large internal team dedicated to achieving and maintaining their rankings, and when you couple salaries with the cost of any media exposure that helps to build their brand, you can imagine that their top 3 ranking for this and other similarly competitive terms costs more than half a million a year.
It’s worth it to them though, because they convert that traffic well.
The same is true of any of the top tier search terms. It’s also important to remember that a lot of companies are able to offset the cost of paid search traffic by using a holistic or econometric model for their overall CPA, looking for incremental volume on one channel, while maintaining a heavy presence elsewhere.
Ultimately, the reason why a business would be willing to invest £10 (or £1,000 for that matter) on attracting a single visitor is that they can convert that visitor into a customer profitably. They pay £10 for the click because that is what it is worth to them based on their conversion rates and average revenue per customer.
Google pay out 68% of the CPC for AdSense to the publisher, and not every advertiser will bid at the highest level for clicks from the content network. There’s a lot of fraud, and less volume around, and also visitors from content sites aren’t necessarily as inclined towards purchase as they are from search, lowering the value of each visitor due to a lower conversion rate. With this in mind, the CPC from the content network would be significantly lower than from search. Also, you can’t guarantee that the ads will be under the same exact match bid strategy as other terms within the account. That £10 click in the Google Keyword tool might be worth around £0.68 or less to the AdSense publisher who sends the visitor.
For the sake of argument, let’s say that the cost of a visitor from natural search in a particular vertical is around 10% of the cost of a PPC visitor (when you consider the investment in time, hosting, link building and content that it takes to rank), the cost per visitor would be something like £1. And not everyone of those visitors will click on the AdSense Banner – lets be generous and say 50%. That means that each click you can generate from your AdSense site costs £4, and only nets you £0.68 in return for your effort.
From that perspective, the traffic is massively un-profitable, and OP in the Digital Point thread is most definitely not going to be holding a Jeremy Shoemaker style cheque any time soon.