How Much Are Online Bookings Worth
Finding out how many people look for your product is useful but it has to be put into context in order to mean something. For example, how can you tell whether 400 people a month searching for 'walking in Scotland' is low, average or a lot?
The fact is, how high or low the number is not that important, it just helps put online demand into context and this is where bids come into play.
Bidding and how to use it to take your analysis further
Advertising online can be done through various methods, one being buying ads on search engines. Unlike regular search engine results where websites show up based on relevance, these ads cost money.
The desirable ad space on search engines is, however, limited and can only accommodate a handful of advertisers. Demand for the ad space being high, advertisers must bid for placement. It is this piece of information that makes or breaks theories regarding money-making online promotion.
Advertisers pay the bidding price only when someone clicks their ad. It's like paying a travel magazine only if they refer prospects to you. Advertisers also know how many people could potentially click their ad over the course of a month. In our case, it's the 400 people looking for 'walking in Scotland'.
Say the most someone would be willing to pay for one of these 400 qualified prospects to click their ad is £0.30. All 400 people clicking the ad would cost a total of £120 pounds. But is it worth it?
Even if some prospects didn't click the ad, the advertiser believes that if they had, it would have been worth paying £120 for exposing the business to all of them. A shrewd advertiser would always aim to make a profit or at least to break even. Someone paying £120 would look at making more than that in generated business.
How to find out bidding prices
Bidding is a simple process. Advertisers choose specific keywords that best describe their product and bid to have their ad appear under those keywords.
The bidding price for every keyword is in the public domain, made available by search engines themselves as intelligence for their advertisers. For Overture, the search engine we used in the How Many People Look For Your Product article, here is how to find this information:
Step 1
Visit Overture's BidTool
Step 2
Enter a keyword you wish to analyse and follow the instructions.
How do these numbers influence getting a website
Someone may spend £120 a month on exposing their business to 400 qualified prospects. In other words, they believe that the business gained from this exposure justifies the monthly expense.
If you were to use a website to reach 400 qualified prospects, instead of ad placement on search engines, you should see at least £120 a month in generated business. What's more, once the investment in the website has been recovered, the rough figure of £120 would come in as pure profit.
There are many more variables involved in online promotion than I've presented in this article but the point was to explain in the simplest terms how to put a value tag on a website before comitting yourself to getting one.
