If you feel I’ve been neglecting you, it’s because my HP laptop is officially on the fritz due to a motherboard problem that many others have encountered. My life as an Internet marketer is on that laptop, so it makes it hard to do some things. The data’s fine, but it’s hard to use it without a computer. Still trying to decide what to do to move forward. I hope HP will repair it for free, but that will take a few weeks and what do I do in the meantime? What a pain.
Anyhow, earlier this week Google released an interesting whitepaper called CPA Performance on the Google Content Network, which I suggest you read when you have the time.
The term “CPA” refers to cost-per-acquisition, which is advertising speak for the price you pay to acquire a customer lead or sale. (It depends on what you’re targeting.) It’s a broader term than “CPC”, which is cost-per-click. CPA measures the cost of obtaining traffic and converting that traffic into customers and/or sales.
Because AdWords advertisers can optionally allow Google to track how well ad clicks convert into sales or leads (by inserting special tracking code that Google generates onto their landing pages), Google was able to crunch the numbers to see how well ads clicked on the content network (AdSense publishers like you and I) fared versus ads clicked on the search network (ads shown on Google-generated search result pages).
The main conclusion is that, on the whole, advertisers pay less per-conversion for ads shown on the content network versus the search network, but it’s not really much less, only 2.6% less. Does this mean that advertisers are paying almost the same per click on the content network? No. The really interesting part of the whitepaper from our perspective as AdSense publishers is this fragment:
… for the median advertiser, Content Network clicks are on average over 28% cheaper than search network clicks. This lowered cost is partially a result of smart pricing, which automatically reduces maximum CPC bids for certain pages in the Content Network based on their likelihood of driving actionable business results.
I would love to see the cost differentials between content and search described in more detail on a broad niche level, I’m sure that there are some niches where the difference is much more than 28%. Proper niche selection can make such a huge difference in this game. What we need is a formula that takes into account the CPC published in the AdWords Keyword Tool, which is for the search network and returns the likely equivalent CPC for the content network.