One of the great things about being an pay-for-performance Internet marketeer and consultancy is we get a “behind the scenes” look at a lot of industries and review a lot of diverse business models.

Some of these industries are hyper-competitive, and some are newcomers to the Web.  Obviously, depending on the level of competition in a niche or industry, we adjust our strategy to garner our slice of the pie.

Let take for instance, the mortgage industry.  It’s a perfect hyper-competitive market on the Internet.  Looking at the cost per click bid values in Google Adwords for any given mortgage-related term will often yield PPC bids in excess of $28.00.  Though it’s not the highest bidded keyword market – it’s one of the top.  To be a player in this industry, you’d need deep pockets, great marketing skills, and technical ability. 

OK…  let’s assume that you have all of those.  The only thing left that you would need would be a unique strategy.

Whenever, we see PPC values for a competitive niche ride up this high, we like to adopt an “arbitrage” strategy.  We know it’d be difficult to compete with the merchants and top affiliates out there on a CPA (cost per action or pay per lead) basis who have been doing this for years.  And we know we’d have to pay hefty dollar amounts to generate a significant amount of traffic using PPC search engine marketing. 

Sooo…  we often enter a hyper-competitive market like this by building a mortgage rates site for the niche and playing in the PPC-side of the market. 

OK…  so how did we approach this market?  Well…  we first got an XML feed from a upstream provider in the mortgage industry.  This feed will pay us on every click we send to one of its mortgage lenders (anywhere from $4-$16/click), and then we’ll build entire sites around this feed.

So, now all we have to do is drive consumers to our site that shows mortgage rates and get them to click, right?  Well yes…  but we like to know we’re providing value to the advertisers in the end, so we want to send GOOD traffic to them.

So we’ll try and get the long-tail SEO terms indexed by the search engines using a multi-faceted taxonomy for the site(s).  For instance, when possible, we’ll try and break down the geography to get some specific, yet high converting terms, like:

• By County: Orange County Mortgage Rates
• By City: New York, NY Mortgage Rates
• By Zip Code: Florida (FL) 32963 Mortgage Rates

and now lets take it a step further and we can get really specific like:

• Dallas Texas (TX) Refinance 30 Year Fixed Mortgage Rates
• Long Beach California (CA) New Home Purchase $200,000 Mortgage Rates

Next, we’ll bid on these long tail terms in order to see how much traffic we can get from the PPC search engines. Whoa…  wait a minute!  I thought you said this traffic would be expensive.  Well, yes it would be if we were bidding on the generic terms.  Plus, since we’re marketing for clicks and not for leads, our $$$ volume spend will typically need to be much less than if we were trying to optimize a full-blown CPA campaign and generating actual mortgage leads.

And that’s all the goodies you’ll get for now — I can’t give away everything can I?

Similar markets that can be toppled with this same strategy: insurance, education, dating and a few large ones yet to be named.

Filed under: CEO's Blog by Administrator