http://www.overture.com/d/search/?type=home&tm=1&Keywords=web+hosting&Find+It%21=Search

Its up to $6.51 per click for #1 and as the second bid is $5.15 they obviously don't check their bids very often.

I am a great advocate of PPC search engines and do very well from them with an average CPC of 20c, but $6.51 ??
Even averaging that out over all their search tems that can't be making any money.

Number of searches on this term last month: 622627

Assume 40% clicked on #1: 249050 clicks

Cost: $1,621,320

Now......... thats 6 times my companies entire annual turnover.

Or am I miscalculating here.

Gordon

On the second one ($5.17) they are advertising a $6.95/month package. Let's say 1 in 5 click-throughs actually sign up. (I think this is actually being generous) This person who signed up has to pay for 4 months of hosting before the company begins to make back their money.

Just to clarify, I didn't click to find out more. Didn't want them to go broke over my curiosity. Then again, maybe they deserve it? I don't understand either.

Originally posted by GordonH
Or am I miscalculating here.
You are leaving out that a top position at Overture brings with it prime placement at a lot of other search engines and directories. Anywhere in the top 3 at Overture is very significant at about ten other sites, as well as all the major metasearch engines. So that changes your cost per click calculation significantly.

Still a $6 bid isn't likely to be making a profit. For many companies, though, the value of branding -- having their site show up seemingly everywhere -- is considered a worthwhile expense.

So your company makes around $270,220 per year?

LOL :)

Not bad...!!
So Gordon.. what's your secret..? What's the best place to advertise..

I think the figures quoted by Overture include the hits from all their search partners.

As for advertising, a lot of it is word of mouth or advertising unusual parts of the service (which is cheap and effective).
A lot of PPC.
Quite a bit of search engine stuff, but mainly word of mouth.

I reduced the price of domains and the number of registrations quadrupled.
Many of them upgrade to hosting.

Gordon