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Rising Keyword Expenses Reducing Profitability

Staff Writer
Published: 2004-09-07

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The cheap keyword prices found by search engine advertising's early adopters are disappearing, which is making the great early returns on investment harder to find. Profitability, in the eyes of one Internet expert, will now come only with a little creativity.

Catherine Seda, a 10-year Internet marketing veteran, says the growing expense of getting popular keywords is making paying for placement on search engines less inviting than it was before. Good returns on investment are still there, Seda offers, but increasingly with second and third choice keywords and phrases.

"Some keywords are simply not profitable for many businesses anymore," says Seda. "Too many companies are bidding on the same keywords. So, advertisers need to expand their keyword lists to include less competitive terms."

In her new book, Search Engine Advertising, Buying Your Way to the Top to Increase Sales (New Riders Publishing 2004), Seda explains that phrases won't typically yield the traffic single keywords get, but they're worth bidding on.

"Multiple-word phrases can often be had for a steal compared to more expensive one or two-word phrases. "Plus," Seda adds, "more targeted phrases generally bring in very qualified prospects, which means the profitability on those terms is higher."
Seda cited that in August, several advertisers' maximum bids on Overture exceeded $2.00 per click for the keyword "flowers." However, a number one position could be secured for just $.27 per click for "calla lily."

"There's still a lot of gold to be found in pay-per-placement advertising," believes Seda. "But more digging for valuable keywords is required."

Catherine Seda is president and CEO of Seda Communication, an Internet marketing and training company. She is giving a groundbreaking seminar series in several U.S. cities this fall. For more information, visit: www.SedaCommunication.com

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