The changes at Goto are that they are requiring a minimum monthly fee of $20, and a minimum bid amount of 0.05 per click. Goto has been very vague about why they are doing this, but my suspicions are that the minimum fee is being set to eliminate small customers who aren't generating enough income for them to warrant servicing their accounts, and the minimum bid has been implemented so they can guarantee their major search engine partners (like Altavista) of a minimum amount of income per click.In the past, I've found Goto to be incredibly effective. For every $1 I spent with them, I typically got $3 in contributions from new users. Under their new pricing system, I don't expect it to be that good, but still worthwhile. In the early days, before there was much competition for keywords, it was more like 10-15:1! Compared to banner ads, Goto tends to deliver much more targeted and valuable clickthroughs. Even under the new system, if you are serious about selling something, you should give them a try.
I personally have no problems with the minimum monthly fee; if you're not spending more than $20 on Goto, you're probably not using it to your best advantage. It's the minimum bid that I find very shortsighted. I bid on hundreds of terms on Goto, and many of them are not worth 5 cents. In particular, there are several very general, very high-traffic search terms that generate a lot of clicks for me, even though my bid is only a cent or two, and even though my bid position is very low (in the 15-20 range). 20-25% of my Goto bill every month is a result of those bids.
Goto's major search engine partners only show the top 2 or 3 listings from Goto, so my low bids will never appear on them -- only on the main Goto.com site. Under the new policy (current accounts are grandfathered until September 2001), I'll be removing all of those high-traffic, low-cost search term bids. That's a total loss of income to Goto.com - even a penny or two is better than nothing.
If Goto is raising the minimum bid in order to satisfy their partners -- which I have nothing against, by the way, because any search term for which I'd want to be in the top 5 bids is going to be worth at least 5 cents -- then the correct way to do it is to simply require that the top 3 or 5 bids must be 5 cents or more. That way the partners get their money, the advertisers can still place low-cost, low-position bids on popular keywords, and Goto optimizes their income. But currently, Goto isn't doing this, so my advice on how to use them has to be based on their current rate structure.
Goto now has a Full Service Plan designed to help you get started. $149 gets you $50 worth of clicks, plus some hand-holding to help you determine what keywords to target. Of course, if you've read my page about keyword selection, you can save yourself $49.00. Send half to me (grin)!How to use Goto
Under the new pricing system, it is imperative that you only bid on search terms that are specifically focused on your product or service. The more specific the keyword, the better it is likely to convert into a sale. Since you now have to pay at least 0.05 for a click, it is usually no longer worthwhile sponsoring general keywords. Do the research to figure out what specific search terms apply to you (read my preparing your pages for the search engines article for tips on how to do this; in particular, use the WordTracker service).Rule #3: If you are bidding on a keyword that isn't the prime focus of your site, my advice is, at first, simply bid enough to get on the first page of search returns. Later, once you know how much those clickthroughs are worth, you can raise your bid to get more clickthroughs, but note that often, the higher up on the page your link appears, the less valuable it becomes (because of the filter effect). Now that you have to pay at least 5 cents, you have to be much more picky about even thinking of sponsoring a general keyword!
If you're a current Goto user grandfathered until September, plan now on what search terms you'll cancel at that time. Typically, you'll be getting rid of the low-cost, low-position, high-volume bids, but the only way to know for sure which bids are cost effective for you is to track your conversion results for each search term you're bidding on. If you're not doing this now, you should be.
For example, if you search for "yahoo" on Goto, you'll find that I have a link to my Yahoo tips page. I used to be bidding enough to get position 3, but found that dropping my bid to a mere 2 cents (position 6 at the time, position 15 or so now) only slightly reduced the number of clickthroughs but increased the number of visitors who ended up being contributors - the filter effect in action. Even so, I was considering dropping my bid to 1 cent, because the keyword isn't closely focused on what my site does, so my conversion rate from visitors to paying customers is much lower on this keyword than, for example, "register website." Under the new policy, I'll not be bidding on the Yahoo term and Goto will be kissing $20 a month good-bye.Rule #4: Consider bidding for one of the first 3 positions, but only on very specific, very focused search terms that are directly relevant to your site, but only if they are cheap. Goto.com is now providing paid search listings for America Online, Netscape Search, Lycos, Hotbot and Altavista - but only the top listings will appear. Goto search results also appear on many of the major metasearch sites.
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