April 19th, 2007

Pay Per Click: The Tracks of My Tiers

By Joe Devlin

Let’s talk about Pay Per Click (PPC) for a moment. PPC engines are traditionally broken up into two tiers. The top tier consists of engines with significant market share and penetration. The second tier would contain the rest of the smaller and niche PPC engines. Where the line between the top tier and the second tier is drawn could be a matter of debate, but since this is my blog posting I am going to draw the line in the sand myself. Hence, for the purposes of this article here is my definition of Top Tier PPC vs. Second Tier PPC.

PPC Tier Chart

Almost every conceivable online marketing PPC campaign should begin with top tier engines. There could be a case made for the extremely small campaign to begin in the second tier, but hopefully after reading this post not even those campaigns will choose to run a limited top tier campaign in lieu of a full second tier campaign. Simply put, the second tier PPC engines have a number of issues that prevent them from generating a fair ROI. What are those issues? Let’s allow a Marketing Sherpa survey point them out.

PPC Chart

It doesn’t take a statistical doctorate to analyze this data, but here are some of the most sobering findings.

  • The one positive to be found in these results is that customer service from second tier engines doesn’t seem to be as abysmal as the rest of the categories. At least you can get someone on the phone to complain to about how poorly your campaign is performing on their engines.
  • Negative responses for traffic quality out-pace positive responses 72% to 7%
  • ROI sees negative responses outweigh positive responses 71% to 12%. Due to the low cost per click on second tier engines, campaigns with good or high ROI are possible just not highly likely.
  • Overall Value of the second tier engines reflect a 77% negative rating.
  • A whopping 83% of respondents found traffic quantities from second tier to be seriously lacking.

More sobering are some of the comments that accompanied the survey responses:

  • “..A majority of the clicks I get from them are either fraudulent or bot-generated”
  • “They are a waste of time. I don’t trust their clicks…”
  • “In general, the whole second tier is more trouble than its worth.”
  • “Very low ROI. Terrible quality referrals. Too much secrecy on their side regarding the source of traffic.”
  • “Click fraud comes to mind!”

I think it is fair to say that, as a whole, the second tier PPC engines are not worth the time or energy to set up and maintain except in rare instances. The two instances I can think of would be if the advertiser has an extremely small budget that precludes them from bidding on top tier engines, or if a marketer has optimized all top tier engines and are now looking for additional sources of traffic without a high regard to ROI. My best advice would be to shed your second tiers before you start to shed your first tears.

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