Provocative headline: Google AdWords: soon over-priced with poor ROI
Poor ROI is easy to understand, to those who are actually measuring ROI, that is.
Donna also reasons:
“What are Schmidt, Sullivan, Scoble and Malik missing? Googleâ€™s unprecedented gross margins and a seemingly unstoppable bid price inflation are derived from the Google-centric auction system which is economically dependent upon price inelasticity of demand“.
Meaning that people don’t care much about the price of clicks, until they get close to a negative ROI position. Certainly, the clicks will top out – there’s no way anyone can make money on, say, ringtones if the CPA is, say, $1000 via PPC.
Perhaps Google aren’t telling us something. Perhaps they know that most keyword inventory isn’t bidded upon? There’s near infinite headroom? And perhaps they will increase page views i.e. increase the traffic pumping through the system?