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  1. #1
    Affiliate Manager Allen Nance's Avatar
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    5 ways to waste money with PPC advertising
    For those newbies and others wanting to get into PPC

    http://www.dmnews.com/cms/dm-news/se...ing/39826.html

    I too found some advice here.
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  2. #2
    Affiliate Manager Alan Hamilton's Avatar
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    This was a good read with several good reminders. One observation /opinion...

    If G allowed the text volume that others do in the ads, it would be a bit easier to incorporate keywords in the title and text of the ad. Y gives enough space to get both a tempting sales teaser message and keywords into the search ad. On the other hand, where you are limited to 70 characters, depending on the products you promote, it can be difficult to effectively do this.

    Thanks for passing the article along.

    Alan
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  3. #3
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Quote Originally Posted by Alan
    On the other hand, where you are limited to 70 characters, depending on the products you promote, it can be difficult to effectively do this.
    I hate AdWords' lack of ability to put in more ad text. It's really not enough. There's usually nowhere near enough room to say anything that's unique about my offerings--there's hardly the room needed to even mention the basics!

    Combine that with their other negatives, and I end up going to Yahooverture in frustration. I only resort to AdWords if I've *already* got ads on Y and still am not getting enough traffic (at prices that don't eat all the profit).
    Quote Originally Posted by The Article
    Not bidding enough to secure a top spot.
    Not so fast!

    I'll add that it's a bigger waste of money to overbid, and that being obsessed with top listings is probably the surest way to end up bidding too much.

    That profit/loss ratio will not change (at least not for the better) with a #1 PPC rank: At any rank, if you end up spending more in clicks than the resulting sales/commish is worth...you lose. If you do that and have bid into the high-volume click ranks, guess what? You still lose, only faster!

    Quote Originally Posted by The Article
    85 percent of all PPC clicks are on ads in one of the top three positions. The remaining ads, whether there are five more or 50, share the scraps.
    If there's only 5 more, it can bring in decent clicks to take a lesser position, provided there's a decent amount of searchers for that term, just because there aren't many others sharing that 15%.

    But if there's 50 more, that means the keyphrase is so competitive that the top 3 are probably taken up by fools bidding $5+/click on something without nearly that much profit/commission in it. So the clicks are up there, but it might not be *profitable* to bother with anything anywhere near the top. Better to have 10 PPC clicks/keyphrase and make a profit, than to have 1000/keyphrase and end up with a loss.

    What he's not putting in his calculation are these monkey-wrenches: Everyone with idle curiosity about an item just clicks that #1 link, because it's the first one that comes up (and since they're just curious, they don't care what the listing text says). So that adds a lot of dud traffic into #1's clickstream, and increases that bidder's costs.

    #2 and #3 don't have nearly as much curiosity-click effect, but they are usually bidded up so much that there's no way to make a profit in those positions. And often, they are taken up by merchants who KNOW that it will result in a loss. They bid high anway, because they believe that it'll cause "branding" and/or that they'll make up the loss from repeat orders. (I believe those merchants are wrong, but the reaons for that are for another post/thread. The important thing here is that the top 3 bids are up the wazoo!)

    Remember that--assuming realistic conversion ratios--getting truckloads of $5/click traffic on an item that has a $10 commish = you lose!! Even at $1/click, you lose!

    The top 3 have lots of clicks...but where are their shirts??

  4. #4
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    I completely 100% disagree with that guy. He is only correct for certain types of businesses. His advice will provide you with the most common mistakes to only make a very slight and partial profit when you could make a ton more. Like I said, his model only works well for a very small portion of businesses, every company needs a different model and his is dangerous. Most of what I am going to write can be argued one way or another, but this guy does not mention the dangers of his advice. Here are only a couple of reasons why:

    1: Using the homepage as a landing page. The simplest reason to use the homepage as a landing page for a few of your keywords is it is the portal to your company as he said. A couple of instances to drop people on the landing page for an effective campaign are:
    1. Your brand name and branding purposes, if people are dropped on landing pages aftr searching for your company's name directly and your landing page is a bit different than the home page, when they do a natural search etc... you have messed up their image of your brand. Drop them on the homepage. You do not need to sell them because they are already looking for you.
    2. If your homepage offers options to float into a multitude of directions, it will save you the time from building a landing page and they can begin to see other products you offer and other categories. This usually only works well for very gneral terms which can go off in a multitude of tangents
    Also, the homepage could be correct because you do not know who is searching and clicking on some of the general terms. What if it is someone from the media searching for information in your industry and you pop-up for the term which is not meant to be a sale, this does happen semi-frequently (in a previous life (a couple years ago) I worked for a major newspaper) and people will loose articles from general terms by boring the journalist who is just doing some research and searching general terms. The homepage can offer them the PR section, the shopping, company history, etc.... Although your landing page could have toolbars, if I understand correctly, this guys goal of a landing page it to convert to sales which si why your landing page by his objectives should not have leaks to alternate pieces of the web-site. It should in theory just drive them right to the checkout and shopping cart with the products being purchased on the page or one click from the page. The one click from purchase landing page is a very strong technique, but not always the right one.
    2. Not bidding enough to secure a top spot:
    After reading this, people should just leave this page. The main search engines (Yahoo's new interface now as well) do not let you buy a space, you pay what you are willing to spend as a max and it then places that into an algorithm along side relevancy and the other things related to your ad, your landing pages and more to determine where you will be in a listing.
    Also, if you don't have a very large budget, you also only have products which you cannot narrow down very closely with your negative keywords and there is a heavy clickthrough or a narrow clickthrough, a great way to drive even more direct traffic is to place lower and to not standout by using keywords in your ad. People who are just looking for the keywords are then less likely to click on your ad because nothing will be bolded, you might not be placed as high and since nothing stands out on your ad, they might actually be reading it to see what you are saying instead of just seeing the keywords and clicking. I'm not syaing placing high isn;t important for certain terms in certain companies, but that is only good for 1/3 of US companies and for a portion of your keywords. It also all depends on what your PPC goals are. If it is to just drive traffic to your site, place high and overload the keywords!

    3. Not making your ad copy specific:
    Hell look up at my previous rant. By placing keywords etc.... which he advises you are inviting unwanted clicks in theory. Also by searchers not clicking your ad, they really are not reading carefully and you can and probably will find that the people click because the ad stands out and probably will not be the best of traffic. Save your budget and make it a specific but hidden ad.
    One thing which the engines also do not prevent you from doing are listing your domain n the ad copy to make it specific, if you are good at your ad copy, you can actually get people to just type your ad copy into the browser window and not click on your ad saving you the click money. This is a hard trick but works very well if done correctly. Think about how to do it and test it if you want to try. It can help save you money on smaller budgets.
    4. I have touched on this already as well but not gone into detail at all. A couple things to remember which he almost hit but did not. Be specific, use bullets or brief statements, (as you can tell from this post and many others, I am one to talk about being brief lol) definitely stay focused on the terms being searched, but also, many times the very targeted terms have very little traffic. You might want to think about this when creating your landing page and if you are offerng products directly from the page, you will want to think about the other very related products the person was looking for and write your page not just focused on the term searched, but focus on both the term searched and some general info about the product lines which are related. Who says they will not be purchasing a complimentary product or need an accesory down the line. Don't overdo it or overwhelm (spelled wrong) your visitor with info, but make it a point that if this is not what they wanted, you do have other items and the compliments to the product. They could easily return to purchase the other products in the future.
    5. YAY this guy offers something I will not argue with, Testing is the key to success, even when you think your program ad campaigns are performing the best they can, trust me there is always something you are missing. Also the searches and search terms change from day to day and your campaign will need altered from month to month. Keep testing and keep working on your campaigns, It is vital to success.


    I have a ton more to say about this guys article, but I am late for step class and my fingers are tired of typing so I am going to get going. Take his article with a grain of salt and remember that his information is probably only good for his company and they probably are not near optimized. Hell I am scared of his advice considering he works for a search engine marketing company lol. Use your own judgement and develop a plan, don't take these simple and general rules to heart and please realize that they are not going to work to your fullest advantage.
    Adam Riemer Marketing, LLC. Online Marketing Blog and Affiliate Management Company
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  5. #5
    Affiliate Manager Alan Hamilton's Avatar
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    Leaders comments on PPC.

    Re: adwords versus Y and M on add text.

    I would think that G's claim that they want to make the visit a higher quality experience would be enhanced / substantiated better if they did give the extra text capability such as Y does. 70 character ads may trigger a lot of clicks, but the quality of the click is the other important factor.

    Y's text limit is not so much that the advertiser produces ads that are short novels, but it is enough that the searcher / user can get a better idea of what the advertiser offers, and if they click my ad, it is a better quality prospect. Certainly, if G's goal is to enhance the quality of the visit, this would be an improvement.

    As for top 3 positioning, no doubt that the top 3 ads gets far more "clicks" - but he did not discuss the ROI factor in any detail. Total number of clicks is not necessarily the key. If I am selling an item with a $10 profit and my top three ad costs me $1.50 per click and it converts at a whopping 10%, I've lost $5.00 per sale. Carry that out over a thousand sales. If it's 5%, I've lost $20 per sale.

    On most PPC campaigns, with the products and services we advertise, there is a sensitive balance between search position, clicks (cost) and profit/loss. On many of my key terms, if I were in the top three, and converting at 3.5 - 4% - I'd lose my shirt. Conversely, if I am in the # 4 - 8 positions, I still get a decent click rate (2% - 6%) - but my ROI is higher (sometimes substantially) and my cost per sale can be a fraction of the top three cost.

    However, something else that a marketer should keep in mind is what the "repeat worth" of a customer is and the adjusted ROI that evolves over the life of the customer relationship. If for instance I am triggering a purchase for a service or product that requires scheduled repurchases, or is related to a product that requires regular replacement purchases, I am far more willing to bid higher for top positioning, or maybe even take a "break even" or small loss on the initial sale knowing that the customer is worth an "aver***e" return of "X" over a period of time.

    But my main desire would be for G to expand the character limit to a level similar to Y. This would allow a merchant or affiliate to write more specific ads with more educational information for the visitor. I'd like to hear others thoughts on this.

    Alan
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  6. #6
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    Decent article. I found it too general and many of his points are what any PPC affiliate considers a "DUH statement" but I don't expect him to give away all the goodies in a free article. He is after all in the SEM business.
    This is a decent guide for a PPC newbie and I agree with most of Liquidate's response. There is a time to send PPC traffic to your home page and a time to send them to a specific product page. I would add that instead of sending it to your home page, create a better general page to land the branded clicks on. Put some sales hype there, tell them why your site is better than the others and you can also control their navigation a little bit when doing this.
    My only real disagreement is the position statement. I usually hang out in the 3-5 position and find that to be the sweet spot for most PPC campaigns with a much better retention rate. My bounce rate at the #1 and 2 spots on product PPC is very high. Staying below that will cost you a few clicks, but staying in that range will also land you some clicks from those who have been to the site of the #1 and #2 guy and are looking for a better deal. Psycology will tell you that after a few clicks, if the variables are generally the same, the customer is much more apt to purchase because they have a sense that they have shopped around and are now ready to pull the trigger. Of course, some customers will shop for two hours to save a dollar, but most will not.
    Thanks Allen for sharing.


  7. #7
    Affiliate Manager Alan Hamilton's Avatar
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    Scooter wrote: There is a time to send PPC traffic to your home page and a time to send them to a specific product page.

    Nice to hear this piece of advice Scoot. I've noticed that with given products it is better to take them directly to the product page rather than the home page. Especially if their search was for a specific item (such as by brand or use)

    In general, the time a visitor may spend on a site is limited, so I don't want to distract them or complicate the main objective of their search with non related information.
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  8. #8
    Classic Rocker Mack's Avatar
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    Yet another ABW thread I would have paid money for. I love this place.

  9. #9
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    "Not bidding enough to secure a top spot. PPC works on an auction model, giving you, the advertiser, the option of deciding how much you want to pay for a search term. In effect, you can choose how high in the ad listings you want to appear. All else being equal, the more you pay relative to other advertisers, the higher your ad will be."

    "Unless you bid high enough to get into one of the top three spots, you’re wasting your time."

    grasshopper, you got this all wrong. it is an auction, but a blind, complex dutch (pre set min price must be reached to enter the auction - complex because the min price is different for each bidder), vickrey-variant (second highest plus 1) type auction that is also not based solely on bid but includes other factors that are also blind to not only the other bidders but to each bidder themselves (sometimes referred to as double blind).

    in this scenario, chasing spots with bid amounts, ignoring all the rest of the bidding and ranking factors, is a sure way to do what this article purports to avoid - wasting money.

    bid for roi, not position. earn better spots by doing everything else that matters well, not by chasing bids. if you want to chase something, chase CTR. chasing bids is like chasing parked cars, you CAN easily catch them but you'll just get your nose bent out of shape.

  10. #10
    Online Marketing Consultant
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    Quote Originally Posted by Mack
    Yet another ABW thread I would have paid money for. I love this place.

    If you want to pay for it, I don't think anyone would object lol. J/K =0)
    Adam Riemer Marketing, LLC. Online Marketing Blog and Affiliate Management Company
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  11. #11
    ABW Ambassador Snib's Avatar
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    I agree with everybody here about the top 3 spots. I've found that bidding lower for the lower spots is much more effective in terms of ROI. You also have better control over your spending. I completely agree with Scoot that customers shopping in retail won't buy from the first couple clicks. They most definitely need to shop around and especially when you're an affiliate you want that last click. Somebody may see the same offering a couple times in the results, but it's the affiliate that gets that last click that gets the commission. So in that respect you definitely don't want to be first. And in my experience I've found that I get a much better conversion in a lower position. Maybe the customer is tired of clicking and just wants to be done with it.

    The part I do agree with is specific landing pages and ads. This is where dynamic keyword insertion comes into play. You can use your keywords to fill your ad. This is great because your ad will always be bolded in conjunction with the search. It's even better if the ad matches the landing page perfectly. If somebody is searching for a green widget and they see an ad that reads "Green Widget Prices" and after clicking they see green widget prices, you've done your job.

    - Scott
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  12. #12
    Moderator MichaelColey's Avatar
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    I strongly prefer to bid for an ROI rather than a position.
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  13. #13
    Affiliate Manager cbsturg's Avatar
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    Quote Originally Posted by Snib
    If somebody is searching for a green widget and they see an ad that reads "Green Widget Prices" and after clicking they see green widget prices, you've done your job.
    Agreed. I'm a huge proponent of actively controlling where a user lands. Sometimes the best landing page is the home page. More often it's not.

    Speaking of keywords in the copy, I had a friend in the industry who would put certain keywords as a subdomain in his display URL of Adwords (greenwidgets.domain.com), even though that URL might not exist. I'm not sure how I feel about that (is it against Adword's policy?), but it seemed to work fairly well for him.

  14. #14
    Moderator MichaelColey's Avatar
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    As long as it's not deceptive, I think Google is pretty flexible on that. I've also done "domain.com/product" (without any problems) even though the actual URL might be a little more complicated than that (like domain.com/category/product.html).
    Michael Coley
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  15. #15
    Affiliate Manager MINDsprinter's Avatar
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    Agreed with everyone on the top keyword spots. I've found that 3-5 converts just as well for me and obviously costs less.
    Jason Rosenbaum
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  16. #16
    ABW Ambassador Snib's Avatar
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    Anybody care to share how many groups they run in AdWords? I realize the 2,000 keyword limit per group opens the gates to mass adgroup duplication. In regard to the API charges, does this mean you need to create a different copy of the same ad for each new adgroup you create? Seems like a waste of units to be copying the same ad over and over.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  17. #17
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Scott, obviously you see the limit, but I am wondering what you see it as. Asking about how to work with it is an interesting logistical question, but I'd like you to discover more. So first, please tell me why you think this limit exists?

    You're a programmer - I'm counting on you to know the obvious, first glance answer isn't the answer...

  18. #18
    ABW Ambassador isellstuff's Avatar
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    Quote Originally Posted by Snib
    Anybody care to share how many groups they run in AdWords? I realize the 2,000 keyword limit per group opens the gates to mass adgroup duplication. In regard to the API charges, does this mean you need to create a different copy of the same ad for each new adgroup you create? Seems like a waste of units to be copying the same ad over and over.
    - Scott
    I generally use the API to do report downloads, bid adjusts and keyword refinement. I upload my ads via other means, to save API units, although I did notice I have 10 million free units per month right now.

    In the past, I ran 80k keywords in two accounts before, using the keyword:

    keyword**bid**uniqueUrl syntax
    and
    {Keyword} substitution in ad text

    But... Lately, I've adopted a totally different approach and I am writing unique ad copy for each product and cherry picking my keywords. I'm currently only running 4,000 keywords in one account, with roughly 2,000 adgroups.

    They more attention I pay to my ad-copy and keywords, the better they perform. It just takes soo darn long to get adverts up when you have to look at each product. (I've got a huge number of products)

  19. #19
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by Donuts
    Scott, obviously you see the limit, but I am wondering what you see it as. Asking about how to work with it is an interesting logistical question, but I'd like you to discover more. So first, please tell me why you think this limit exists?

    You're a programmer - I'm counting on you to know the obvious, first glance answer isn't the answer...
    I see it as a legacy limitation. Google may not have put the facilities in place to support something larger, possibly support resources. Could also be a barrier to entry. I talked to MSN and they told me I can add up to 100k keywords to a group, so I hope Google follows suit soon.

    - Scott
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  20. #20
    ABW Ambassador isellstuff's Avatar
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    Quote Originally Posted by Snib
    I see it as a legacy limitation. Google may not have put the facilities in place to support something larger, possibly support resources. Could also be a barrier to entry. I talked to MSN and they told me I can add up to 100k keywords to a group, so I hope Google follows suit soon.
    - Scott
    I think multiple keywords in an adgroup are really designed to help you control ROI, improve CTR, and the general quality of ads. I don't think the "bulk dumps" that we programmers are fond of are the orignal intent. So the unique keyword urls are really for tracking ROI at a keyword level. So > 2k keywords in an adgroup facilitates keyword dumps, not highly quality ads. (from Googles perspective)

  21. #21
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by isellstuff
    I generally use the API to do report downloads, bid adjusts and keyword refinement. I upload my ads via other means, to save API units, although I did notice I have 10 million free units per month right now.
    Care to elaborate on these "other means"?

    Quote Originally Posted by isellstuff
    In the past, I ran 80k keywords in two accounts before, using the keyword:

    keyword**bid**uniqueUrl syntax
    and
    {Keyword} substitution in ad text

    But... Lately, I've adopted a totally different approach and I am writing unique ad copy for each product and cherry picking my keywords. I'm currently only running 4,000 keywords in one account, with roughly 2,000 adgroups.

    They more attention I pay to my ad-copy and keywords, the better they perform. It just takes soo darn long to get adverts up when you have to look at each product. (I've got a huge number of products)
    Sounds like you've come full circle. I'm at the point where I have to decide whether I generate more than 2000 keywords or just focus on making these 2000 keywords better. From what you're saying I should choose the latter. My plan is to import sid reports and automate as much of the cherry picking as I can.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  22. #22
    ABW Ambassador isellstuff's Avatar
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    Quote Originally Posted by Snib
    Care to elaborate on these "other means"?
    - Scott
    As soon as I can PM.

    Quote Originally Posted by Snib
    Sounds like you've come full circle. I'm at the point where I have to decide whether I generate more than 2000 keywords or just focus on making these 2000 keywords better. From what you're saying I should choose the latter. My plan is to import sid reports and automate as much of the cherry picking as I can.
    Oh, I was pretty stupid about my keyword dumps. Don't do this : "select product_name from products" and pipe it into adwords.... That's what I did and it didn't work well because there was too much noise. I was also broadmatching, which resulted in some very interesting and unexpected matches that I would have caught if I had actually examined the keywords before dumping.

    I will do keyword dumps again, but this time I will look at each keyword and product before creating an ad. I guess what I am saying is that if you start out with junk, your automated bidding algorithm will have a hard time making anything out of it and may fail altogether.

    Here's the thing..... In my opinion, long tail keywords need a different bidding strategy from high-volume keywords. If you lump the two together in an adgroup, then your going to have a harder time with your ROI & Automated Bidding.

    Hope this makes sense...

    Oh, I should also mention that my "full circle" keyword strategy is an experiment in goal setting. e.g. Cherry pick new products and keywords with the goal of increasing daily revenue XX amount each week. Its a little less daunting than managing huge keyword dumps.
    Last edited by isellstuff; February 12th, 2007 at 05:16 PM.

  23. #23
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Quote Originally Posted by Snib
    I see it as a legacy limitation. Google may not have put the facilities in place to support something larger, possibly support resources. Could also be a barrier to entry. I talked to MSN and they told me I can add up to 100k keywords to a group, so I hope Google follows suit soon.

    - Scott
    as a professional programmer, do you believe G can only handle their defined max... or that they couldn't program it into their ever changing system... or that they don't have the resources... babe, you fell for the obvious answer that isn't.

    it's about behavior, not machinery.

    think it over some more.

  24. #24
    ABW Ambassador Snib's Avatar
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    Quote Originally Posted by Donuts
    as a professional programmer, do you believe G can only handle their defined max... or that they couldn't program it into their ever changing system... or that they don't have the resources... babe, you fell for the obvious answer that isn't.

    it's about behavior, not machinery.

    think it over some more.
    My only other guess is to prevent keyword spam. They want to make it difficult for affiliates or marketers to load their index with poor quality ads and keywords.

    - Scott
    Hatred stirs up strife, But love covers all transgressions.

  25. #25
    Classic Rocker Mack's Avatar
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    Quote Originally Posted by Donuts
    as a professional programmer, do you believe G can only handle their defined max... or that they couldn't program it into their ever changing system... or that they don't have the resources... babe, you fell for the obvious answer that isn't.

    it's about behavior, not machinery.

    think it over some more.
    They'll expand it. As soon as they figure out how to change by the letter.
    Really, this is a great thread.

    To me PPC is almost like gambling. If you're a rookie, it's craps. You place your bet, roll the dice and hope you hit.

    Once you get the hang of it, it's more like poker. Once you understand the rules and know the all of the odds and statistics, you'll be a better player.

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