- 17 Sep, 2013
- Jon Tucker
- 0 Comments
Have you ever wondered how Google makes $100M per day? And yes, that’s the figure published in various industry publications in 2012.
The bulk of Google’s revenue comes from people advertising on Google, using “pay per click advertising”. Pay per click advertising works like this:
- People do a search on Google
- You tell Google that you want to show up in front of them
- If that person clicks on your ad ad visits your website, you pay Google a flat fee for that “click”.
Google gets paid every time someone clicks on an ad, and in some industries they’re making $50+ for every single click! In this episode of The Compete Marketing Group Show, we discuss the most expensive industries for Google’s pay per click advertising.×Google advertising is helpful, but is just a small piece of the puzzle to market your business successfully. To get a list of specific opportunities to grow your business, click here.
But First – Higher Costs Can Mean Higher Profit
Before we talk about how expensive some clicks can be, you need to understand that the price that you pay per click isn’t what matters – the profit that you make from these clicks is what matters.
- If you pay $100 for a click, that may seem prohibitively expensive.
- But if you make $150 on average from every website visitor in your ad campaign, then you’re making money on those clicks. Buy them all day long.
Now that we’ve cleared up that common question, let’s talk about the industries where Google makes a ton of money (but remember, advertisers are making a profit if they run their campaigns effectively).
Insurance Advertising Costs
One of the most expensive industries for pay per click advertising is insurance:
- The highest cost per click registered in this segment, according to the industry research that was performed, was $54. That’s the cost for every single website visitor that clicked on an ad in that particular industry.
- Now by no means does that imply that you will pay $50 for every such ad but the cost in that niche is indeed very high.
The insurance industry advertising cost is so high because the stakes are high. Someone that buys an insurance policy usually ends up keeping that policy for a long time, so the “lifetime value” of that customer is high for the advertiser.
Loans and Financial Assistance Advertising Costs
Another industry where the cost per click is very high is the loan industry, which covers mortgages, car loans, and other forms of financial assistance.
- This is similar to the insurance industry in that lifetime value of the customer is high. If someone gets a home loan, they’re going to keep that loan for 15-30 years in most cases.
- The lender also keeps track of default rates and margins, so they know on average how much they’re going to make for a new loan customer.
According to the industry research, the highest rates paid by the loan companies per click ranged from $44 to $47.
The Software Industry
The software industry is an industry where a the lifetime value of a customer can be high – I think you’re probably seeing a trend now with increased advertising costs if the lifetime value of the customer is high.
- Types of software vary by customer, price, and more, but they often require some form of renewal or upgrade over time (i.e. monthly, annually, or every few years).
- Due to the nature of software, each upgrade is more revenue with little cost so it’s a very profitable industry once you have the customer.
The highest pay per click in this segment was around $35 – however, it’s going to vary a lot depending on what type of software is being sold.
What Do Our Clients Pay Per Visit?
Our customers come from a range of industries that cost $1 per click all the way up to $40+ per click. However, the important thing to remember is that we’re managing for a return on investment across the entire account – so if they’re spending $40 per click, our aim is to make much more than $40 per website visitor on average.
We’d be happy to share advertising costs for your industry using our research tools to identify ways that you can buy customers online.
If you have any questions or want to contact us for any reason, you can reach us here.