18 Mar '13, 7am

How to Estimate the Break-Even Point of Paid Search

How to Estimate the Break-Even Point of Paid Search

A few months ago I wrote about the death of paid search and had to sustain the backlash of the paid search community through 38 comments and multiple “hate tweets.” I actually enjoyed the discussions and learned quite a lot from some of them. The question that kept bugging me was if there’s a correlation between a price of a product or service and their CPC? Do keywords associated with high-priced products cost more? Image Credit: Wikipedia In the core of this question is the theory of economic equilibrium . Simply, in perfect market conditions, the price of products will be set at a level where supply and demand are equal and with no change in supply or demand, the price will stay the same. The reason why this theory is important for understanding the relationship between product price and CPC is that if information was completely available to all parties in the market (a...

Full article: http://searchenginewatch.com/article/2255282/How-to-Estim...

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