Overture UK minimum bids to double
Overture UK announced this week that it is raising its minimum bid price from 5 to 10 pence.
The rise, which is due to take place on 6th February 2003, will see Overture UK bidders forced to pay a minimum of 10 pence (US$ 0.17) per click. Overture.com users currently have a minimum bid price of US$0.05, about 3.5 pence.
While this won't have any obvious impact to bidders on terms costing them more than 10 pence, it does alter the strategies that many companies will now have to take to maintain a reasonable RoI within their online marketing activities.
Many competitive, and highly profitable markets such as loans and mortgages can see bid prices as high as £10 or more, while search terms for industries with a lower unit cost (online CD sales or magazine subscriptions, for example), generally enjoy lower bid prices, as profit margins are much lower in unit terms on such products.
Assuming for one moment the for every 10 visitors you make one sale, then your PPC spend per sale for each sale is ten times your average click price.
Micro-payments have been notoriously difficult as a business model on the web so far, but by wiping out a potential traffic channel for sites relying on large volumes of micro-payments, Overture UK have in one feel swoop increased the importance and impact of good SEO practise. This of course, doesn't even take into account those websites that are not revenue generating.
SEO generally does not incorporate any unit cost (i.e. cost per click), but works on an overhead basis. Bulk traffic therefore reduces the overhead per click, and hence successful SEO proves much more cost effective than any running-costs based system.
Overture may have potentially closed a market-place for many businesses, but much of this marketing business must be looking elsewhere for their promotion solutions. Bigmouthmedia believe that SEO is the way forward for these industries.
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