AdWords advertising is getting too expensive.
The Internet is considered the most profitable advertising channel in terms of price and efficiency. If no one questions the effectiveness of online advertising, then the cost is already beginning to scare some advertisers, writes MarketWatch . At least, this trend can be traced in the Google network.
An example of this is eBags.com , which last year spent from $ 5 million to $ 8 million on contextual advertising for various bags. But this advertisement is so expensive that in some cases it is necessary to give up to 45% of the value of the advertised product for it. Businessmen think that it is cheaper to order print ads.
MarketWatch journalists write that they know at least half a dozen of such examples. Advertisers with annual budgets from $ 4 million to $ 10 million claim to reduce their cooperation with Google due to high prices.
Some keywords have increased prices by 40-60% over the year, and in some places even more. For example, in the children's goods sector, requests doubled in price.
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The average conversion rate for conversions from Google is at the level of 5%, and on some sites it is much lower. For example, in the Ice.com jewelery store , a conversion rate of 0.65%, that is, only one of the three hundred visitors who came to advertise with Google, buys something here. Naturally, with its high cost, such advertising does not pay off.
In the free market, the price level is set by the balance of supply and demand. If prices rise, then demand exceeds supply. If for some advertisers the price becomes too high, then the price is approaching a balanced level. The fact that the online advertising market is approaching saturation is also indicated by the slowdown in advertising revenue growth of Google. In 2006, they grew by about 80% and exceeded $ 7 billion, and this year growth is expected to be only 47%.
An example of this is eBags.com , which last year spent from $ 5 million to $ 8 million on contextual advertising for various bags. But this advertisement is so expensive that in some cases it is necessary to give up to 45% of the value of the advertised product for it. Businessmen think that it is cheaper to order print ads.
MarketWatch journalists write that they know at least half a dozen of such examples. Advertisers with annual budgets from $ 4 million to $ 10 million claim to reduce their cooperation with Google due to high prices.
Some keywords have increased prices by 40-60% over the year, and in some places even more. For example, in the children's goods sector, requests doubled in price.
')
The average conversion rate for conversions from Google is at the level of 5%, and on some sites it is much lower. For example, in the Ice.com jewelery store , a conversion rate of 0.65%, that is, only one of the three hundred visitors who came to advertise with Google, buys something here. Naturally, with its high cost, such advertising does not pay off.
In the free market, the price level is set by the balance of supply and demand. If prices rise, then demand exceeds supply. If for some advertisers the price becomes too high, then the price is approaching a balanced level. The fact that the online advertising market is approaching saturation is also indicated by the slowdown in advertising revenue growth of Google. In 2006, they grew by about 80% and exceeded $ 7 billion, and this year growth is expected to be only 47%.
Source: https://habr.com/ru/post/4933/
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