CPC – Advantages and Drawbacks
What does CPC indicate?
When we think of high paying keywords, the first thing that pops up in our mind is CPC. CPC (Cost Per Click) is the maximum amount of money an advertiser is willing to pay for a click. Higher the CPC of a particular keyword, more will be the payouts you can expect by targeting that keyword in your AdSense websites. You can get the most accurate CPC from the source itself – Google.
However, CPC is not the only factor that tells the profitability of a keyword. There are many other factors that you should consider.
Drawbacks of CPC
– What if there are no advertisers bidding on a keyword having high CPC? Obviously, it means no one is going to pay you that high for a click.
– What if the traffic on the keyword is technical enough and does not click on ads (banner blindness)?
– What if Google gets loads of traffic on that keyword, enough to fulfill the desires of high paying advertisers? In this case, Google will only throw remaining peanuts towards you.
Obviously, Google will like to keep all the high paying ads within its own pages. So you see, CPC just shows you a small part of the entire picture. We shall explore the rest part of the picture…
Number of Sponsors – The Most Important Figure
Keywords with high CPC do not always come with high number of advertisers. There are many keywords in Google’s Adwords system that have a high price, but almost no or very less number of advertisers. Now, if you build a web page or website around a keyword on which no one is bidding, Google will try to fill the ad blocks with ads of the related keywords rather than the high paying keyword you were initially targeting. There is no guarantee that ads of the related keywords will be good converters. Therefore, there is every likelihood that your clicks will be passed through SmartPricing Filter, eventually resulting in lesser payouts.
Hence, it is important to see the number of sponsors bidding on the keyword in question. If there are more the advertisers, there will be more competition among them to get the top position. This means that there will be more revenue per click that they are willing to share with you. In other words, more sponsors mean more people fighting against one another other to pay you more Adsense money.
Number of clicks on an Ad
It refers to the number of clicks an advertiser gets when his ad appears on the top. If the number of clicks and number of advertisers is less, just ignore those keywords, no matter what their CPC is. However, if the clicks per month are lower than expected, but the number of advertisers is a good one – it’s the right choice for you. Such keywords are called “Niche AdSense’ keywords.” Here the word ‘niche’ is used in commercial context. This means that Google is not able to generate traffic on such keyword ads. This makes it difficult for it to exhaust the advertising budgets of the advertisers. Therefore, in order to meet its targets, Google happily shares high paying ads with you, resulting in more payouts. Try to find such “Niche AdSense’ keywords.”
Coming to Higher number of clicks – It indicates:
Either the traffic segment is ignorant about the online advertising concepts, and click on these ads unknowingly. This means you will experience higher CTR on your ads when placed at appropriate place. You don’t have to put in much efforts to fight banner blindness.
Or, the traffic is highly commercial and willing to purchase the advertised product over internet. This means that there are very little chances of your facing the SmartPricing phenomenon.
Number of clicks along with the other stats like Number of sponsors and CPC, can enable you to make more wise decisions while choosing keywords for your AdSense content.
It’s important to see the pattern in which people are bidding on a keyword. Suppose there are 400 advertisers bidding on a keyword. The top 20 of these are paying something like $15 per click, while the rest of them pay somewhere between $2 and $0.05. Now you might have found some decent tools that give you the average of top 3 or top 5 positions which is good, but not good enough. The point is that although the top 20 advertisers are paying higher, but the rest 380 advertisers are paying quite low. There is a high probability of your getting the ads of those 380 sponsors. Therefore, the average of the top 20 advertises can be really misleading. The solution to this problem is discussed in the later part of this page.
We have enough Adsense money now. Let’s build some traffic on your website.
Traffic Building for AdSense:
Choosing Niche Keywords
Niche keywords are the keywords that are highly searched by the web surfers, and are rarely used by your competitors. Less competition means more traffic to your website. Targeting ten niche keywords is easier and more fruitful that targeting a highly competitive keyword. Traffic from niche keywords when directed to a relevant page increases your CTR and conversion ratio.
People generally take the number of results returned by search engines as the number of pages competing on a keyword. But it is wrong. The Search Engine Results get irrelevant after 10 – 15 pages. Irrelevancy further increases with the depth. The pages that have the keyword dumped in a corner are not competing against you, but search engines will still list them. In fact they have to.
It is assumed that if a webmaster is targeting a web page with a particular keyword, the keyword is used in the title as well as in the anchor text linking to that webpage. Such a page is listed higher by the search engines as it is dedicated to what you searched for. So how to filter out the most relevant results? Check it out!
Inanchor intitle and Its Precision – The Solution
In Google, you can easily determine the EXACT number of pages that are competing against you. You can precisely list out the pages that are using a particular keyword in their page titles or in the anchor texts linking to them.
The query can be applied as follows: intitle:keyword inanchor:keyword.
For example, if the keyword is “hair treatment”, the formula will be used in the following manner: intitle:hair inanchor: hair intitle: treatment inanchor: treatment. This figure gives you the exact number of pages that are ACTUALLY Targeting with these keywords, and not those that have just created a page or a small paragraph on the same topic. Google emphasizes on Anchors and Page titles. That’s the reason, it supports such a search query.
We shall now discuss some other traditional ways to determine competition.
Here, R refers the number of competitor websites for a particular keyword as per the search result of the search engine. And S refers the number of searchers using that keyword while searching their queries. This means that for better results, you have to choose the keywords with lower R/S ratio.
R/S ratio becomes polluted when someone uses the number of results as the number of competing websites. As explained above, counting the number of results as the number of competing pages is the biggest mistake one can make while choosing a keyword. However, the figure becomes quite useful when inanchor intitle is used to create R/S.
KEI (Keyword Effectiveness Index) is a formula for measuring the effectiveness of a keyword. The formula was devised by Sumantra Roy. However, this figure also depends upon the number of searches and competition, but with a difference. This formula analyzes the number of searches and competition in such a way that if the searches increase, KEI increases; and if the competition increases, KEI decreases. Higher the KEI, more profitable will be the keyword. However, it becomes polluted when the number of search results are used as the number of competitors.
Determining traffic for a keyword is quite important before targeting it. Along with the competition stats, it lets you make out the niches present in any industry. Besides, it lets you predict (to some extent) how much traffic you can expect if you promote a website around a particular keyword. There are two known sources for determining traffic. Overture Keyword Suggestion Tool (now a part of Yahoo Search Engine) and WordTracker. When talking about accuracy, Wordtracker monitors the queries on some meta search engines that actually render it inaccurate . Reason? There is no known stat about how much of the community you are targeting is searching on those meta search engines. However, it’s a good tool to make out the niches.
In my opinion, Yahoo owned Overture gives you more accurate stats than Wordtracker. This is for the reason that Overture is a PPC engine. It can show you how many people are searching for a particular term on its vast network. A network which is bigger than any Meta Search Engine. Still, it is not that accurate, but at least better than Wordtracker. The tools that are predicting Google Searches for you are just doing guess work. No one knows the algorithm they use.
Summing It Up
Profitability of a keyword depends more on the number of sponsors than CPC. Number of clicks and bidding quality can’t be determined by just monitoring the first 3 or 8 places. It can be rightly assessed by taking out the average of all the 400 sponsors bidding on a keyword. Sounds very tiring for keyword research, right? Well, Keyword Country (http://www.keywordcountry.com) gives you not only the average of all the sponsors bidding on a keyword, but also the Max CPC from Google, Clicks per month from Google, No. of Advertisers present in Google Adwords system for a keyword, Competitors through inanchor intitle, R/S ratio and KEI with inanchor intitle, Traffic through Overture, and much more. All this enables you to make a wise decision while choosing the keywords.