Revenue-per-Click
February 4, 2006
I am spending a few days at Disney World at a client meeting that is focusing on issues like Web marketing, analytics, pay-per-click, and organic search. This morning one of the client’s customers offered a case study of how he analyzes the relative success of approaches such as Google pay-per-click, other search engines such as Yahoo, and vertical search engines that focus on his business. Not surprisingly, the most general pay-per-clicks do not necessarily yield the best results. The best results often come from the vertical search engines—the more focused the search, the more specific idea the user has about what he or she is searching for, and so forth. Just by using the vertical search engine, the user has already qualified himself to a certain degree.
For this speaker, the right metric is not cost-per-click but rather revenue-per-click. How much real business follows from a given click through to your site? To accurately track this, he has his salespeople always enter a source for a lead into their sales tracking system. Did it come from Google? Another search engine? A referral from an existing customer? This field is mandatory (in fact, they have to enter this field first before they can create or enter the rest of the customer record). This encourages the sales person to get a very specific idea of the source of the lead, which they also find to be an important element in qualifying the customer.
After a couple of years of analyzing this, the speaker has a lot of proof that the highest revenue-per-click comes from the vertical search engines. Moreover, the general search engines like Google tend to produce too many unqualified leads—and these unqualified leads take additional time from the sales people working with more qualified leads. So this speaker is spending less money on Google pay-per-click going forward and will spend more money on the vertical search engines.
It seems this speaker is ahead of the game, and has arrived at a metric that not enough people are thinking about yet. A quick search of Google (!) gives me 43.4 million hits for “pay-per-click,” 7.15 million hits for “cost-per-click,” but only 12,100 for revenue-per-click.”
It sounds like this in area ripe for more exploration.
Posted by Bill Trippe at February 4, 2006 10:29 AM
