Keyword Analysis Part I: The Fallacy Of High-Paying Keywords

by Damon G. Zahariades

Let's say you have just bought a brand new list of keywords. The sales letter that you bought the list from said that these are HIGH-PAYING keywords.

In other words, these are keywords that advertisers are shelling out big money in order to bid on clicks through Google's Adwords program. When someone clicks their ads, the advertiser is charged a huge amount of money and Google splits it with you through their Adsense program...

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Sounds great, right? I mean, some of these keywords are getting bids of $20, $30, $40 and more PER CLICK.

Even if Google is only giving you 50% of the cut, it doesn't take much to hit $10,000 per month in Adsense revenue. Here's the math...

(20 clicks x $30) x 50% = $300 per day in revenue.

Kinda gives you a tingle, doesn't it?

Hold your horses, partner! There's more to this than meets the eye.

There are 3 reasons why the promise of high-paying keywords is a fallacy...

REASON 1: Advertisers Are Saying No To The Content Network

Trust me. Any advertiser who is paying $20 a click in Google Adwords is tracking their performance. He's tracking his ROI.

I know, I know... you've been taught that the Adwords game is filled with corporate knuckleheads who are just begging to throw their ad budget at Adwords. You've been led to believe they're bidding up prices and they couldn't care less about their ads' performance.

That's BS.

Advertisers are getting more savvy. They want results. And they have the tools to easily recognize when those results aren't happening.

It's no secret that the Content Network (that includes your sites on which you display Adwords ads for Adsense revenue) delivers prospects of LOWER quality than the Search Network.

Advertisers know this. So, many of them simply choose to NOT display their ads on the Content Network.

What does this mean for that list of high-paying keywords that you just bought?

The bid prices that are displayed for each keywords on those high-paying keyword lists come from bids on Adwords ads that are shown on Google's search results pages. NOT the Content Network.

If there are fewer advertisers willing to shell out the cash to show their ads on your sites, what happens to the bid prices of those keywords?

Simple supply and demand... the bid prices go down. Often, dramatically.

So, when you see that "mesothelioma" is getting bids of $60 a click, that bid price is for ads that are being shown on Google's pages. Not yours.

The ads that are showing on your pages are earning MUCH less that that. Ask anyone with a "mesothelioma" site.

The folks selling the high-paying keywords don't mention that little nugget.

REASON 2: Advertisers Are Lowering Their Bids On The Content Network

In the past, advertisers could only display their ads on the Content Network if they agreed to bid the same amount that they bid to display their ads on Google's pages.

That is no longer the case. Google now allows advertisers to bid different amounts on the Content Network.

Now, a quick review... you know that the Content Network delivers lower-quality prospects via Adwords ads than Google's pages (see Reason 1 above).

So, if advertisers can adjust their bids for displaying their ads on the Content Network, which way are they going to adjust them?

Exactly. DOWN.

Which means you get paid less. Often, MUCH less.

That's another little tidbit that you aren't told when you buy high-paying keyword lists.

REASON 3: Smart-Pricing Creates A Huge Mystery

Now, I'll be the first to admit... I have no idea how Google determines what they pay you each time someone clicks on the Adwords ads showing on your site.

Let's say an Adwords advertiser has bid $1.50 each time somebody clicks on his ad that shows on the Content Network. So, if Google is giving you 50% of each click price, that means 500 clicks would put $375 in your pocket, right?

If only the math were that easy!

Unfortunately, Google uses what they refer to as Smart Pricing to determine what you get paid. There are tons of variables that Google uses. And they protect it like Coke protects its secret recipe.

So, what does that mean for the huge bid prices that you're seeing on the high-paying keywords list that you bought?

Well, you already know that the bid prices are for the ads that show on Google's pages, not yours.

But, to ADD to the mystery, now you have no idea if Google is going to pay you %50, 22%, or 78% of the click price. It depends on their Smart Pricing and nobody knows what makes up the recipe.

That kinda throws those bid prices on your high-paying keywords list into a tailspin, doesn't it?

Last Thoughts

Okay, we've covered a lot of ground. And by now, you may be snorting with anger. You're either angry at your high-paying keyword lists or you're angry at me for suggesting they ain't what they're cracked up to be.

So, let me clear the air a bit.

First, high-paying keyword lists are still worth acquiring. There's a bit of art and science that goes into finding lists and massaging them so that they're actually WORTH something, but I'll go over that in a future article.

Suffice to say, if you know that "mesothelioma" is getting $60 bids, that's worth knowing.

But, you have to put that data into the proper context. By now, after reading this article, you know you're not going to get $30 a click for ads on "mesothelioma". So, don't count on it.

Same goes for every other word on your high-paying keywords list. Put the data into context.

Whether you're building auto-generated sites or valuable virtual real estate with quality content, a list of high-paying keywords can be valuable. But, like any data, you have to analyze it correctly to get the value from it.

That's it for now. See you next time!

Damon G. Zahariades

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