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How To Control Your Rising
 Pay Per Click Expenses
(And They Are Going To Rise Dramatically)

If you are reading this article while having a cup of coffee or glass of wine, you can be sure that the store you purchased the coffee or wine from knows how much (via your membership card) you bought and when you purchased it. Do you know with the same precision, which of your Pay Per Click (PPC) keywords resulted in revenue for your mortgage company?

If you currently purchase PPC keywords, you have noticed an increase in costs. There has been a constant upward spiral of keyword costs. Will the trend continue resulting in certain PPC keywords approach $100 per bid? Many mortgage company owners are in for shock and will look back to these days of bidding just $5-$15 per keyword as a true bargain.


Purchasing PPC keywords is becoming similar to buying stocks on the New York Stock Exchange. Each PPC keyword, much like a stock, has its own valuation; in example, the current top bid ($9.51) for the keyword "Illinois mortgage" is not the same as the top bid ($5.50) for "Illinois home loan".

One major difference between PPC and NYSE pricing is that when you buy a stock, say IBM or Microsoft or General Motors, you lock in a price, but that stock will fluctuate. It may go up a couple of points this week, and then go down a couple points next week; and then maybe go up or down 20 points over the course of a year or two.

Now compare that to the new world of buying Pay Per Click keywords from the two major vendors for the Pay Per Click bidding: and, the prices essentially go up, and up; and you have not locked in a price.

Buy High, Then Buy Higher Again

Because the Pay Per Click industry is so new there hasn't been a full market correction yet. So for keywords such as "Portland home loans" or "Seattle mortgage" or "Kansas home loan" as recently as two years ago, may have been around $0.25 to $0.60 per click. They are now generally between $4 and $12 per click, and climbing. Unlike a stock that you purchased at a fixed price and enjoy the benefits, when the stock price increases, you must constantly repurchase your keywords at the current price in today's market or lose your ranking at the search engine.

PPC Bids Will Continue To Increase

The currently market for bidding on PPC keywords will continue to escalate. Undoubtedly, you will find a market cap at which point the cost of the keywords exceed the value of the lead, but, as we are all aware, the tremendous amount of monies to be earned per closed loan dictates that we have additional market growth until we meet that PPC saturation point.

Will Bidding Hit $100?

Many dominant players in the mortgage PPC niche are reporting current expenses between $30 and $60 in keyword bid costs per generated lead application. We predict that, for selected keywords, bidding will approach $125-150 per click.

Why Mortgage Companies Will GLADLY Pay $100+ Per Keyword

As the price per keyword continues to increase; many mortgage companies will no longer bid, because they will say that a keyword, "Is not worth that much". Yet more sophisticated mortgage companies will continue to bid higher and higher rates, and they will do so gladly, having mastered the technique of optimizing their web site so that they are earning more revenue than it is costing them in advertising expense.


Many companies initially ignored the consumer usability aspect of their web site and simply loaded information that they felt to was indicative of what they offered, ignoring two critical factors: the consumer needs and how their web site responds to each searched keyword.

Sophisticated and knowledgeable mortgage companies have learned how to not only two properly manage their keyword bidding, but, more importantly, how to integrate each specific PPC keyword and then how to manage and optimize the entire sales process around that keyword while meeting the visitors needs.

Converting PPC Expenses Into Revenue

As the total costs expended to secure a lead increase, many mortgage companies are performing two major activities: PPC keyword tracking per lead and the integration of PPC, consumer expectations and enhancing the optimization of the sales process via the web site. The end result is that sophisticated advertisers view their monthly expenses, not as a cost, but as a revenue source due to their ability to generate leads.

PPC Keyword Tracking

Most high-end mortgage companies (those spending over $25k/month on the various PPC search engines) are uniquely tracking the origin of each lead. For example, they are determining whether or not, the lead they received online was generated by the keyword "home loans" or "Miami home mortgage" or "Miami mortgage broker" or "Florida home equity loan."

The escalating cost of root keywords such as "home loans" and "mortgages" can result in creating a substantial monthly cost yet sometimes not produce the quality of leads found in a more narrow, and less searched, PPC keyword. In example the number of searches for "Denver home loans" is less than searches for "Colorado home loans" but may prove to result in a higher number of applications due to how specific the keyword is.

Your ability to follow a keyword from entry point on your site to your application form is important. By using keyword tracking, you can accurately track the revenue by specifically matching each keyword to the amount of revenue it produced.

Which Keywords Perform... And Which Keywords Don't

Also note that tracking the keywords that do NOT result in applications is as important of a cost control tool. Many mortgage company owners no longer bid on the all-encompassing keywords such as "home loan" or "mortgages," especially when they only offer loans in 15 states. The high number of searches for "home loan" and "mortgages" often can create a substantial PPC bill. By focusing on which keywords perform, you can bid higher amounts on those words which result in increased revenue.

By analyzing your PPC keyword costs and associating each keyword with revenue unique to that keyword, you will be able to increase the number of your leads and save money. This should enable you to buy more of your favorite coffee or wine.

In next month's article, we will discuss how optimizing each specific PPC keyword and performing usability analysis on your site can yield even more revenue per click.


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