Isn't it cool when you have a solid article to back up the value in doing business with your company? When you find articles like this they are as good as gold. ReachLocal provides this "big business" type solution to local dealers. This is why we have ran over 15,000 Automotive campaigns.
"The real competitive value in SEM is the long-tail. There are keyword combinations that are not searched often, but, if you have enough of them, create real value. It's where your competition is least likely to play, and thus where you can get the most value."
"It's simple. When a consumer buys a product at your site or goes to any page you consider a conversion, the SEM company places a pixel on that landing page. These are often called "thank you" pages and display something along the lines of "thank you for your purchase." The company knows which keyword landed at that page and caused the conversion. You can attach a value to that conversion, so the system dynamically adjusts the bid pricing for that keyword. That keyword, in essence, is more valuable. If, for example, that keyword cost $1, and the value you set for that conversion is less, it will adjust your bid pricing to get more customers, maximizing its effect. It's the conversion that matters, because that is what impacts your business. You could be getting lots of clicks on 10-cent keywords, but it does not matter that they cost less if none of them covert. They actually cost your business more.
Even more unique is that some of these systems look at your keywords at a portfolio level and adjust the price to maximize customers across a whole range of keywords. It does all of this, and continually gets customers for you at the most efficient level. A human is just not able to make those decisions in a timely manner, nor is it efficient for them to do so."
From the article: http://www.imediaconnection.com/printpage/printpage.aspx?id=22167