I was encouraged this WE to look into the cost-per-click of some financial services keywords in the U.S. using Google Adwords Keyword Tool.
As of the time of this writing:
- “video cameras” costs you an estimated $3.14 per click,
- “buy car” costs you $4.81,
- “wireless” and related: ~$5.00,
- “dsl” and related: ~$6.00
- “real estate investments”: $5.47
- “buy computer”: ~$8.
Now get this:
- “buying mutual funds”: $12.66, “online stock trading: $18.06
- “best credit card deals”: $25.94, “balance transfer credit cards”, $18.23
- “auto insurance quotes”: $34.58, “insurance quotes: “$29.77″
- “high yield checking account”: $17.81, “checking account rates”: $20.44
- “mortgage refinancing”: $32.58, “home equity loans: $23.74
I know this is a very superficial research study, but there seems to be a pattern here: financial services firms are paying significantly higher than firms from consumer sectors for prospective customers’ attention.
What can we learn from it? IMO the cost per click is a function of
- profitability of the related service offered over the average customer relationship duration, and
- likelihood that the prospective customer who has clicked will subsequently actually buy the service online,
then my quick conclusion is that there is probably good business opportunities in online comparison services for financial services products, as well as in new financial services that leverage the Web and social networks to be cheaper and mass-market. Peer to peer lending is probably one of them.
Two thumbs up for this post, Guillaume. By the way, “debt consolidation” cost-per-click is sometimes even higher.
Thank you JC. I check “debt consolidation” and it's $20.59 right now. I'll try to provide update to this research in the future to see how these CPC evolve.
Financial service related keywords can even be much higher depending on a number of factors:
http://www.spyfu.com/TopList.aspx?listId=3
Ads from financial services has long been the lifeblood of the Internet and the mortgage crisis has taken quite a stab at Yahoo!'s and others CPM ad revenue and performance (see this post on SAI for instance).
To put things in perspective though, the lifetime value of a customer in financial services is much higher (in absolute terms) than that of an e-commerce retailer.
It'd be interesting to trend these CPC prices over the period of time. My bet right now is that debt-related keywords will go down in value (since lenders are in no hurry to lend money) while savings accounts and cd-related keywords will go up. Cash-strapped banks and thrifts, like IndyMac, are going after any opportunities to build up their cash reserves and lure unsuspecting customers looking for a high deposit rate!
Another interesting analysis would be to look at a typical banking activity portfolio to see which seems more cost effective between a conglomerate, a niche player or the long tail from a customer acquisition standpoint.
Update: interesting post on Valleywag about LowerMyBills financial woes in the wake of the credit crisis.
Financial service related keywords can even be much higher depending on a number of factors:
http://www.spyfu.com/TopList.aspx?listId=3
Ads from financial services has long been the lifeblood of the Internet and the mortgage crisis has taken quite a stab at Yahoo!'s and others CPM ad revenue and performance (see this post on SAI for instance).
To put things in perspective though, the lifetime value of a customer in financial services is much higher (in absolute terms) than that of an e-commerce retailer.
It'd be interesting to trend these CPC prices over the period of time. My bet right now is that debt-related keywords will go down in value (since lenders are in no hurry to lend money) while savings accounts and cd-related keywords will go up. Cash-strapped banks and thrifts, like IndyMac, are going after any opportunities to build up their cash reserves and lure unsuspecting customers looking for a high deposit rate!
Another interesting analysis would be to look at a typical banking activity portfolio to see which seems more cost effective between a conglomerate, a niche player or the long tail from a customer acquisition standpoint.
Update: interesting post on Valleywag about LowerMyBills financial woes in the wake of the credit crisis.