The bids on AdWords are soaring to new heights everyday. Some advertisers are even shelling out up to $10 per click. So, naturally the question arises – Is this complete madness or is there any logic behind such aggressive advertising?
To me, it does make some sense to bid aggressively if you have the right strategy in place. And if you are bidding for the right keyword. It does not make sense to bid for “web design” if you offer web design service in Texas! In that case your keyword should be “web design texas”.
Considering, you have done enough research, let us consider two scenarios:
1) Every client you acquire, on an average spends $15000 with you in a year. In this case, you do not mind spending 10% of the revenue as customer acquisition cost. Therefore you can comfortably bid $10 per click (provided you have a site which can convert 1 out of 150 visitors). Thus, looking at a lifetime value of a customer makes it a good investment.
2) If you have mastered the art of persuasion (or have hired a master of persuasion), and have come up with a website with converts well (visitor > customer conversion), every visitor you are driving to your website is equivalent to revenue :). So go ahead, rock the boat and bid out all your competitors. You will get more customers and will also have lower customer acquisition cost. What more do you want?
So, expensive keywords bidding do work, if they are backed with high lifetime customer value and/or higher conversion on the website. And yes, those Internet marketing experts are not insane! In fact most of them are very smart.
So bid smartly!
And, if you need help, contact our SEO team. Reach them at firstname.lastname@example.org!