The High Cost Of Search Engine Advertising A Significant Barrier For Many Businesses

The High Cost Of Search Engine Advertising A Significant Barrier For Many Businesses

Category

Search Engines

In today’s search engine advertising marketplace, many businesses are paying search engine optimization firms tens of thousands of dollars a year (and up to $15 per click in some cases) to help move their sites to the top of the web search results pages of Google, Yahoo, MSN and other search engines. This exponential increase in the cost of marketing sites on search engines has made search engine advertising too expensive for many businesses; especially those businesses that sell products at relatively low prices and have products with relatively low profit margins. For example, assume the average price of a company’s product is $20, with a profit margin of 30% ($6.00 profit per sale). If the average cost per click on search engines for search terms related to this business is $1.00 and the business buys 20 clicks ($20 in advertising), 17% of the people that click on their advertising would have to buy their product in order for this business to break even on their search engine advertising investment (3.4 sales are needed to break even). Historically, sales conversion rates for online advertising have fallen below 5-percent for most businesses. This business would either have to find cheaper search engine advertising or sell products with higher prices and profit margins in order for search engine advertising to make sense for them.

To address this widening gap in the search engine marketplace, one search firm has recently adopted a low price flat rate business model. Kazazz Search Engine (www.kazazz.com) now allows businesses to list sites in their search database and receive top search positions for an unlimited number of search terms for a flat rate of $19.95 per month. “This program makes search engine advertising affordable to almost every site and significantly improves the financial model for search engine advertising.” said Karl Hall, CEO, Kazazz.

New search listings on Kazazz are placed in the number one spot on the search results page for each search term and are ranked on a "last in, highest web search position basis. Kazazz calls this process leap frogging and sites that are leap frogged out of their top search position by another site can leap frog back into the top search position by updating their listing(s).

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