Google, as a part of its Adwords service will let you know what you should expect to bid on a search term. This is called the Adwords Cost Per Click or AWCPC for short.
But this is a beginning, not an end to understanding the true cost of advertising on Google (or Bing) versus organically ranking for a search term.
Remember that 15% of all people searching for something on the Internet will click on an ad. 53% of those will click on the top ad that is shown in Google. In fact, the first 3 advertising positions draw nearly 80% of all the paid traffic. (Important: A good percentage of those who click on an ad will still click on an organic search engine result as well.)
This is why in Insurance you see Geico, Progressive, State Farm, and Allstate each fighting for the top few paid advertising slots in Google and on Bing as well.
Geico and the others are spending on advertising because it works. So why not copy their process? It is expensive, particularly for “main street” businesses like a local independent insurance agency!
Check this out:
- “Car Insurance Buffalo NY” has a minimum cost per click bid of $56.88.
- “Auto Insurance Nashville TN”: Try $85.50 per click!
- Have a look at “Cheap Car Insurance Seattle”… it’s a whopping $153.97 per click!
But while Google has a recommended Adwords CPC for a given keyword, it is an “opening bid” and certainly not adequate to guarantee your ad will rank towards the top of search results. The best way to improve your chances of ranking higher for paid search advertising is to pay Google more. We estimate at least 30% more than the displayed Adwords Cost Per Click.
In the example of “Cheap Car Insurance Seattle” that $153.97 cost per click moves closer to $200.16.
Next, click fraud is a very real issue. A study from the National Association of Advertisers last December estimated click fraud would cost advertisers more than $6 Billion this year alone. The Wall Street Journal reported in 2014 that 36% of all clicks on ads are fake. In spite of ongoing efforts to curb click fraud, it is real, not illegal, and run by highly sophisticated computer algorithms that seem to outsmart Google. For 2 legitimate clicks on an advertisement, you have a 3rd “fake” click that is a real cost of doing business. (The more competitive and highly valued the keyword, the greater the likelihood for click fraud.) In other words, you have to pay for 3 clicks to get 2 legitimate ones.
As such, take $200.16 for “Cheap Car Insurance Seattle” and multiply it by 1.33, yielding $266.21 as the TRUE CPC (TRUE cost per click) for a given keyword term.
So a $153.97 Adwords CPC = a TRUE CPC of $266.21
The next time you think about advertising in search engines like Google or Bing remember these key points:
- The Adwords Cost Per Click (AWCPC) is an opening bid.
- Top paid advertising positions convert MORE traffic.
- You have to pay more to rank higher.
- You have to contend with click fraud.
The alternative? Use ORGANIC SEO!
That’s right, Organic SEO is the way to beat the system and bypass paying Google and Bing for results! It is also the one true way to win against the giant corporations that may be encroaching on your local market.
- At Greendays, our performance fees are 60% to 70% less than the true cost per click (TRUE CPC) you would pay the search engines.
- Organic results don’t suffer from click fraud.
- Organic results get significantly more traffic. (85%+ vs 15% for paid listings.)
If you have questions about Organic SEO, be sure to drop us a line. We’re here to help!
