Paid search

 

To illustrate this process we will just use Google as an example. Their paid search system is called Adwords. Do not confuse this with their advertising system (placing Google adverts on your site and paying your of it which is called Adsense).  In concentrating just on Google Adwords, AFS-inc regularly advertize for its clients on other conventional search engines such as Bing and Yahoo. Others such as Ask and AOL can be managed via Google Adwords.  

To illustrate the basic principles of paid search (sometimes called PPC [pay-per-click]). Let us suppose you own a site selling toys, and you want to sell teddy bears, and in particular a brand called Charlie Bears.

 

The possible search term could be ‘toys’ and this could trigger a potential volume of 3 million searches of the exact term ‘toys’ (that means nothing else just toys) a month. To get your advert into position No 3 in Google you would need to pay a little over $7 per click – may be less depending on Google’s internal quality score. Note the exact volume depends on seasonal factors. Of course you can lessen this volume by restricting geographically (do you really want to sell in the US to every state), by time and by budget... and other criteria.

 

 

If you persuaded 5% of the people searching for toys to click on your advert (which is in No 3 position – which is actually ToysRUs then you would land yourself with a monthly bill of around $1 million a month.

AFS can probably bring this figure down to a fraction of that but the term is too broad to be always of every much use except for company like ToyRUs.

 

Therefore, $1 million or $100,000 is a little high. So most advertisers/retailers would want to qualify the search term ‘toys’ to reduce and fine tune the volume. Take for example ‘Teddy bears’.
The volume is much less – around 200,000 searches a month. However, the price is higher around $9 for position No. 3. Again, with position No 3 supposing you persuaded 5% of the people searching for ‘teddy bears’ to click on your advert, your monthly bill would be close to $100,000 a month. This is again probably still too high except for the largest retailers. Although in the example shown here, a number of smaller retailers are spending that amount a month.

Herein in lies the reason you might use AFS. Instead of paying $9 a click we can, with judicious juggling, get that price down to around $1 a click through manipulating the internal (and unseen) quality cores of Google.

That brings the monthly cost down to $10,000 a month, which is better and may be affordable deepening on the number of conversions.

 

 

That might make an economic case – a proportion of people looking for teddy bears may buy Charlie bears – the brand we are really trying to sell. Not everyone who wants to buy a bear will have heard or the brand Charlie Bears so this type of search does not make sense if we can get the price down far enough. We can always restrict volume by selecting states close to you and so on.
It all depends on your profit margin. If your profit margin is only $10 a bear then it is going to be difficult to make an economic case unless you can justify this on repeat orders from satisfied customers – something that should not be dismissed lightly especially for newer sites.
If the profit margin is $20 then it is worthwhile, and it could become extremely worthwhile if you take repeat orders from returning customers into account.
However, for the smaller retailer, we need to fine tune further to just those people searching he internet who are searching for Charlie Bears.

 



The volume now reduces to around 2,500 a month and the cost is around $2-50 a click with position No 3. That is only $125 a month.

That would probably only get you a maximum 13 conversions or orders a month. OK that is profitable but the whole purpose of using AFS is to do better.

 

So we think we could get you around 200-300 orders for an outlay of around $500-$900. With a Charlie Bear that would make a profit margin of around $5,000 to $10,000 a month.

That is why you need our expertise. Do it yourself or use a large agency and you will not do the very best you can.