Published: Oct 26, 2007 - 09:25 pm
Story Found By: flyingrose 3409 Days ago
From the page: "Ultimately, an advertisers dream is that 100% of clicks convert to sales but the problem is that this is a VERY small percentage of the overall click volume. If Google and Yahoo were to truly only pass on "quality" clicks then we would have an affiliate not a PPC system.
What this means is that both Google and Yahoo are right now actually passing on "sub-standard" clicks to advertisers. For example, a games company may purchase a keyword for $0.95, knowing that only 10% of clicks convert to a sale. The fact that there is only a 10% conversion rate indicates that they have paid for sub-optimal clicks.
The reason why the advertiser receives these clicks is a volume issue. Google and Yahoo essentially say, "We can give you 100% conversion on only 1 click or you can have 10% conversion on 10,000 clicks." If all advertisers selected the 1 click option then Google and Yahoo just went out of business. The name of the game for Google and Yahoo is how many clicks can they deliver and yet still have happy advertisers with a conversion rate high enough to keep on spending on PPC."