Google Adwords: Traffic up and Sales Down

I received a call tonight from an advertiser I've worked with in the past asking if I've seen Google PPC traffic increasing and sales declining simultaneously. I am seeing that trend in many accounts. Is anyone else experiencing this?

absolutely, and with campaigns that had a steady ROI since 3 years.
Any ideas?

I can only think of a few issues:

-Increased competition (not my case)
-Increased click fraud
-expanded match


[ Message was edited by: bali2002 03/25/2007 07:17 am ]

I'm seeing this issue more and more. It is increasingly challenging to stabilize spending and conversion rates in accounts.

The increase in traffic is coming from new Google search partner sites including Social Networking sites and Parked Domains. The largest Social Networking partner I know of is www.MySpace.com which has millions of users and can drive tons of traffic.

With the rise in popularity of social networking sites like MySpace, more Internet users will use the default search function on those sites instead of going to www.Google.com or using a Google toolbar.

Just how many will use the search on a site instead of a search engine's Web site or toolbar will determine who "wins" the "search war".

The decline in conversions has the same cause. Many of those clicks are not going to be "search" in the same manner that a search at www.Google.com is search.

Conversion rates can vary dramatically from site to site and from section to section within a site. While an intentional search of the entire Internet done at MySpace.com might be about the same as one done in a Google toolbar, ads are being shown at the top of the page for searches of the MySpace site itself including those for videos and other members.

The potential for those searches to generate tons of accidental clicks on your ads is huge - especially if you are bidding for one of the top three positions. Obviously visitors who didn't intend to be visitors aren't likely to buy much.

I will add some strategies advertisers can use to control advertising costs and improve ROI.

So one solution would be to show the ads only on G and not on the network...

The first solution if you have enough traffic is to opt out of the Search Partner Network. The down-side to doing that is you lose traffic and sales from the good search partners too. That includes any users of AOL, Earthlink, and AT&T who use the default search function of those sites.