Why PayPerClick (PPC) does not Pay for brokers?

So you want to try PayPerClick (PPC).

pay-per-click

noun

1. (on the Internet) a strategic business model where companies place an advertisement on their site pays a sum of money to the host website when a user clicks on said advertisement.

Lets break it down for brokers in 4 factors.

1. Cost per "key word" 

Costs can range substantially any where from $12-$15 per click for a key word that is competitive such as "auto transport" to $5-$10 per click for a longer tailed keywords with less traffic and impressions. The key here is LESS, a lot less, so its not Realistic to believe you will get tons of clicks at $5-$8 even if you set your daily budget to the moon.

2. Experience.

Google has certain algorithms to extrapolate as much money as possible from new companies and individuals with newer accounts. I recently set up my 3rd managed account and remember we did not break even on cost until we paid over $50,000 through the account. So if you don't have $50k-$100k to play with I would be very careful.

3. Conversion (Lead)

One of the biggest things is your conversion rate, basically how many "clicks" it takes to aquire a real lead. Most sites I see brokers using are poor at best. In fact, a recent study claims that the average lead converting site performs at 20%. This would mean it would take about 9 clicks to get a lead. Times that by $8.00 (conservatively speaking) and that is $40.00 for anyone starting out. 

4. Conversion (Sale)

Now how many leads must you generate to get an actual sale. Say you close these exclusive leads at 33.33% . That would mean you would have to spend $120.00 as your CAC (Customer Acquisition Cost) Then pay a sales commission of lets say 30%, again conservatively speaking, to your sales rep. Even if you closed the deal at $200.00 which is on the high side, the company would make $20.00.

Conclusion

Believe it or not, many of my numbers above are fair and conservative. The main reason why it doesn't work out so well for brokers is because the majority of consumers like to get multiple prices online. so even after you spend all this money getting a actual lead, that customer shops on other sites and gets multiple quotes from other companies as well. The best bet is still aggressive sales reps and a good quality lead source(s).