PPC Bidding Strategies: Getting Five Cent Clicks In The Most Expensive Niches

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Every time I setup a new clients adwords or bing advertising account I am faced with a very interesting Dilemma. Most of my client work in niches with top position clicks running as high as $65 to as low as $12. The obvious dilemma is do I start them off with top position bids to make sure they get a taste of the potential search traffic has for them, and to hopefully get them spending a lot of money, or do I start off with 5 cents clicks and slowly turn on the faucet as they need more leads. I know what you’re thinking, who would pay $65 per click? I’ll tell you who… The guy who converts 50% of his clicks into phone calls and converts 90% of his phone calls, and a customer is worth a few thousand dollars. Crazy, I know. But, those are real number for my bail bonds client on his mobile ads. Running mobile only ads, targeting long tail location keywords for an extremely high need searcher (who has a more immediate need than someone searching for a bailbondsman on his mobile phone moments after his friend or her boyfriend got arrested?) These leads are super easy to push to call in and really easy to close. Pretty much the only thing holding them back from closing every call is they are selective on who they will bail out.

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Luckily for me, bail bonds was far from my first high margin, expensive click niche. In fact, I started off in Car Donations which consistently has $30-$50 clicks when you target local long tail keyword strings. I also work in other high margin niches like chartering private jets and discount luxury travel. Every one of these niches has this same challenge for me… If it was my own money, I would follow the numbers, figure out exactly how much I could spend finding customers, and max out on opportunity immediately. I would optimize from there trying to save myself money, work on improving quality score, tightening my ad groups, and testing lots of ad copy. However, if you I had to invest someones money that I feel a deep responsibility to, I would walk before I run, and try to find a way to get cheap clicks at scale no matter what the competition does. The problem I end up with this strategy is the old saying, “Why Buy The Cow When I Get The Milk For Free.” In other words, when I manage to generate $2.75 leads in an industry with $15 clicks, or generate $12 leads in an industry with $65 clicks, both of which I have done, I run into the same challenge when my clients want more volume. The way I generate those leads is by laying out a massive net of long tail keywords, and splitting up my bidding and targeting in as many ways as possible, and setting my bids starting at Five Cents, and basically catch whatever falls through the cracks. This works great if you don’t need more than a handful of leads day. Of course though, greed kicks in, and they assume that you can generate these leads at these prices at scale. The truth however is that there are only two ways to generate more leads in these cases. Option one is to raise the bids. After all, there is room to pay even top dollar for clicks. Alternatively, I can lay out an even broader net for relatively small wins. So, I am stuck with a choice. spend 10 hours building out millions of keywords to generate another dozen leads a day or raise the bids and get quick profitable wins without blinking an eye.

The downside of starting with the higher bids is that you miss out on the point of diminishing returns. After all, paying for top position is usually not the sweet spot for most advertisers. They are usually better off in the 3-5 position range, as the Return on Their Advertising Spend (ROAS) produces a much higher yield. The problem is, as you lower bids the volume drops off, and now you have a client that is addicted and possibly dependent on volume, even though it was not really in their best interest. The worst case of course is when they can’t handle the volume and you create masssive chaos within their organization.

The other big factor at play is of course, how do I upsell them on my SEO services. After all, I love SEO and have a great track record of not just results, but success recovering from a penguin hit last year. When a client is paying a premium for leads, by bidding for top position, the appeal of SEO is huge. They look at SEO as the opportunity to save millions of dollars. When you start them off with the small bids, the value of SEO doesn’t appeal nearly as much to them.

So, how do I manage this catch 22 where what is in my clients best interest isn’t in my own best interest? Simple, I switched my business model from charging a percentage of ad spend and now charge a flat price. This way, I can be perfectly open and transparent about what efforts will likely yield the highest ROI for my clients and lay out of the options clearly. Of course, since my rates represents the value I create, which  can save them and make them millions of dollars is far from competitive, I find that I am being asked by clients to train them and their staff  more and more. This is a perfect relationship Because I can focus on my strategies to creatively compete in impossible situations, and show clients how to get five cent clicks even in the most competitive niches.

Want to learn about some of my strategies? Drop me a line and I would be glad to share.

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About David Melamed

David Melamed is the Founder of Tenfold Traffic, a search and content marketing agency with over $15,000,000 of paid search experience and battle tested results in content development, premium content promotion and distribution, Link Profile Analysis, Multinational/Multilingual PPC and SEO, and Direct Response Copywriting.

Comments

  1. This article has been very insightful and I love your bottom-up approach to PPC. I would like to try this method based on “long tail keyword strings” as you discuss. I think this can be just as helpful for products or services that have low profit margin.

    But you don’t explain how you generate these unique keywords (or phrases- perhaps). This seems like a tedious and daunting task…..

    • DavidMelamed says:

      Hi Jon, 
      Thanks for stopping by my blog, I am glad you liked this strategy. There are several ways to generate these big lists. The first thing I should point out is that I personally believe that there are millions of keywords that don’t show up in googles external keyword tool or other keyword tools but still in aggregate get searched often enough its worth targeting. Most people use broad match to target these queries, but I personally find broad match to be too expensive and too hard to control, even with negative keywords… So, here is what I do… I create a master list of head keywords to target, and I create a list of possible prefix long tail searches, and suffix long tail searches, and I use a tool, or excel macro or an outsourcer on odesk to group them tightly, and append the head keyword with every possible prefix and suffix variation. 

      I build it out in a certain way that is actually a bit controversial… But, it seems to work for me… Perhaps I’ll make a part two of this post showing my process. 

  2. DavidKonigsberg says:

    Interesting Choice going hourly -we should sit and talk shop one day stop by our offices next time your in lakewood 😉

    • DavidMelamed says:

      Sure thing, although I am in Colorado, so I don’t make it to Lakewood very often.
      (This post is semi-old, and I actually moved away from an hourly model to a flat managed fee, so my clients feel like they can reach me without worrying about running up the clock.)

  3. Must be daunting having to decide which way to go with your clients, like you mentioned in the beginning – giving them a taste of possible traffic or starting off small. Probably something that would be a cause for deliberation for someone that is just starting out in this type of marketing. Great post though. I can’t imagine being able to spend some of those amounts of money on PPC, unless of course I was like the guy with a good conversation rate.

  4. I just want to say thank you for all these great PPC blog posts. I’ve been lurking on this section for a while now, just reading through everything and I’m very impressed by your posts (which I have now bookmarked and fully intend to use as a resource in the future). I’ll almost certainly be coming to you with some questions in the future.

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  1. […] a paid search marketer has too make. If you recall one of my older blog posts about generating five cent clicks in the most expensive niches, you would notice that I pointed out the inherent misalignment of […]

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