I just went over to overture.com, and looked up "Web Hosting" The first result that comes up is for dgtweb.com, and they're paying $7.38 (!) for every click!! IMO That is extremly insane. I say every should just go over and click their link... The last time I checked, the keyword "web hosting" was at around 4.50 or something. There are just too many hosts out there, too much competition

I wonder If advertising like that auctally pays off...?

With Overture the bidding is driven up as if you are in the Top 3 you get listed at other search engines as AOL Search as sponsored listings. When we were more actively recruiting accounts we held the number one listing at AOL Search (before their Sponsored listings) and it would usually drive 5 - 10 customers a day. I have no idea how many clicks a day they receive as a sponsored listings but it surely does generate new business but at a price. Their logic must be that if they pay $100 to obtain a new account and make no profit for a year it may be worth it if they order more accounts through them or refer friends to them. At $7 a click though that means you have to convert 1/14 if you were looking to spend $100 to acquire each customer..

Also note that from all the information I've read being #1 actually decreases the cost effectiveness of the listing. If you were #3 you may get more business then #1 because chances are the potential customer has shopped around a bit at this point and know what they want/need. Then if your offer sounds better then the previous two listings you very likely will get the sale even though you underbid the other two companies. I've seen multiple places report this as being far more effective but as always do your own math in regards to ROI.

I found it amusing that Sprint's solutions was paying around $5.00 a click a while back and it lead to a 404 page. :D

for god's sake if u gonna do that then give to the poor, (me) :eek:

Too rich for my blood, but I suppose they may be equating the costs to something like print advertising (Rolling Stone mag, USA Today etc).

$7 a click does seem like a serious loss leader though...

Greg Moore

when companies reach ultimate level and have lots of money to burn, they spend too much on advertisement, acquiring small companies, merging business etc. For example, coca cola when launched its drink in India they came with a boom and theor AD. budget was more then 3 years expected profits from region. They just want there name to be on people tong and create brand awareness and push the competitors back.

Large companies, it doesn't much matter to them cost per client they just want to achieve there targets any how to create figures and display them in market and get more money to burn. Do you remember DOT COM boom. Every body was having lots of money. everyone only constructed on number of hits and clicks and unique visitors. Yahoo got big listing because of maximum number of unique visitors, so in my understanding this is the game.

The amount of money large companies invest on salaries and infrastructure expenses, they have to advertise very high, and it will not be a bad idea for them, specially when you have market money to spent and show results to shareholder. ;)

well, I am pretty young for this stuff but I try hard to understanding how these things works. :)

OK

$7 a click...

So, lets say 100 clicks, that'll cost you $700. You get 6-7 new customers from this, on average they pay $100/year each. In the first year you make a small loss, but in the following year(s) after, you make profit off customers you'll never have had.

It's quite dangerous method of advertising though. Various ways a competitor could abuse your funds.

Originally posted by 311
I just went over to overture.com, and looked up "Web Hosting" The first result that comes up is for dgtweb.com, and they're paying $7.38 (!) for every click!!
If you think that's bad, search for "dedicated hosting."

ouch, almost $15/click :eek:

Originally posted by 311
ouch, almost $15/click :eek:

:eek: :eek: :eek: :eek: is right

All I can say is that they are truly insane. It's not suprising we hear about all the .com failures when people throw money away like this. Really $15 a click is crazy. :confused: :confused: :eek:

In many ways it comes down to differences between companies that have a limited advertising budget so see it as silly to spend so much money for "advertising," and companies that have large marketing budgets and see such expenditures as a necessary part of their branding campaigns.

For a couple of past discussions on the subject see:
http://www.webhostingtalk.com/showthread.php?threadid=27998
and
http://www.webhostingtalk.com/showthread.php?threadid=12823