Are You Wasting Money on Overture?

    July 28, 2004

Overture is a great place to get traffic. Pick the right keywords and you are in for smooth sailing!

But it can cost you a bundle.

Recently we were looking at a new report on pay-per-click advertising when we made an astounding discovery-for some keyword phrases our clients will make more total profit from being in a lower position.

For one keyword phrase we found it likely that an online store would make a net profit of $300 from the #1 position, but a net profit of $364 by going for position #3.

And with much less out of pocket expense-the ad cost for the number 1 position would be $840, while the number 3 position is only $356.

In fact, in order of total net dollars in profit, the positions for this keyword phrase broke down to:

$364 net profit for position 3
$300 net profit for position 1
$295 net profit for position 4
$289 net profit for position 2
$237 net profit for position 6
$216 net profit for position 5
$198 net profit for position 7
$190 net profit for position 8
$160 net profit for position 9
$159 net profit for position 10

(For details on how this works, go to: )

How can you find out if you are better off in position 6 than 5? It is a combination of several factors:

The Gross Profit Per Sale

If you are selling Widgets and your average sale is $50, but each widget only costs your $30 to actually get to the customer, your Gross Profit would be $20 ($50 minus the $30 cost.)

Cost Per Click

On Overture you bid to pay a few cents or more for every person who clicks through to visit your site. The number one position is the person who bids the highest per click.

Total Number of Searches

The number of searches for a particular search term help determine how many actual visits you will have to your site as well as how many sales.

Average Click Thru Rate for Position

According to a recent study by the Atlas Institute, the first position on Overture gets a 7% click thru rate, meaning on average, for every 100 searches, the number one position receives 7 click thrus.

Positions beneath the first receive lower numbers.

By plugging in these numbers you can calculate not only how many sales you will make, but how much net profit TOTAL-not just per sale. The results can be surprising-and might just make you more money, even with less sales.

To find out exactly how you can do this, go to:

Kevin Bidwell is owner of

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