Managing a Responsible Pay-Per-Click Campaign
By Scott Buresh March 17, 2003
OVERVIEW
What is PPC?
Pay-Per-Click is a paid form of advertising, popularized
mostly by the "search engine" Overture (formerly
GoTo). The concept is fairly simple. Businesses
bid to be placed at or near the top of the search
results for particular keyword phrases. The bidding
is done on a "per-click" basis, meaning that a
company pays a specific amount every time the
engine sends them a visitor. In addition, the
top results on Overture also show up in the results
of many of the popular search engines (usually
listed as "sponsored" or "featured" results).
Google has a similar version of PPC (AdWords Select)
that has taken over some of the engines that used
to display Overture results (most notably AOL
Search).
Advantages
Pay-Per-Click campaigns have some advantages over
traditional search engine optimization. First
of all, they require no changes to a current site's
content or look to obtain top positions, just
a willingness to pay. Also, the implementation
of a pay-per-click campaign is relatively quick-
it can take just a few minutes to start getting
targeted traffic, versus sometimes months for
standard SEO campaigns. Finally, unlike search
engine optimization, the implementation of a PPC
campaign is relatively easy and does not necessarily
require any specialized knowledge (although experience
with search engine marketing and keyword research
is a definite advantage).
Limitations
Of course, there are limitations to this type
of advertising. New bids can lower the positions
of other firms, and many will react by raising
their bid to regain a previous ranking. Monitoring
of positions becomes crucial. These campaigns
can also become prohibitively expensive, depending
on the competitiveness of the keyword phrases
and the aggressiveness of the competition. In
addition, many of the "savvier" search engine
users have learned to recognize PPC results as
paid advertising and bypass them without consideration.
THE PROCESS
Determining Visitor Worth
Determining how much each website visitor is worth
is vital to the success of a pay-per-click campaign.
If it costs $50 in click-throughs to make a $40
sale, the campaign has failed. The formula is
relatively simple, but some specific historical
data is necessary. In the most rudimentary form,
it is the profit from the website over a given
period divided by the number of total visitors
for the same period. If a site netted $1000 in
profits from goods or services in a given period,
and there were 2,000 visitors during the same
period, each would theoretically be worth 50 cents
(profit divided by visitors). But this is only
the breakeven point. Depending on the desired
profit margin, the optimal price to pay per click
would probably be something much less than 50
cents. Popular keyword phrases can often run more
than this, so it then makes sense to bid less
money on less popular terms to pay an acceptable
amount per visitor.
Selecting Keyphrases
As with typical search engine optimization, keyword
research is critical to the success of a PPC campaign.
Unlike typical search engine optimization, there
aren't practical limits on the number of phrases
to target. Usually, there is no extra cost to
add as many keyword phrases as possible. This
makes the keyword selection process easier, since
there is not a good deal of resources committed
to optimizing a site for a particular keyword
set. Under-performing keywords, while still an
annoyance, do not cost extra (except for the time
involved in setting up the account). To help identify
keyword phrases, Overture has a tool on their
site that allows advertisers to see how often
particular search terms are actually typed in
their engine. It also gives out popular suggestions
based upon the terms you enter.
Writing descriptions
With a typical search engine description, the
object is to entice as much traffic into a site
as possible in the hopes of converting that traffic
into customers. With PPC, a different approach
is mandated. It is undesirable to pay for unlikely
prospects, so the description is designed to eliminate
the "tire kickers" while attracting highly targeted
traffic. For this reason, the description should
describe exactly what the business offers- a company
wouldn't want to pay for every visitor looking
for "insurance" if they only sold renterŐs insurance,
for example. At the same time, proven marketing
copy techniques should be employed to insure that
the description is enticing enough to attract
ideal prospects.
Monitoring and Analyzing
It is crucial to the success of any PPC campaign
that it be monitored regularly, since positions
can and do change every day. Since the top three
Overture or Google AdWords results are what typically
show up on most partner engines (some display
more), the competition for these spots can be
fierce, and bidding wars are common. If the price
gets too high, it is usually prudent to withdraw
and pursue a different keyphrase (the only way
to really "lose" a bidding war is to pay too much
for each visitor!). Apart from position monitoring,
it is important to track and analyze the effectiveness
of individual keyword phrases on a monthly basis.
Viewing click-through rates and studying visitor
habits can lend valuable insight into their motivations
and habits, and help to further refine a Pay-Per-Click
campaign.
CONCLUSION
Pay Per Click campaigns can bring large numbers
of highly targeted visitors to your website. However,
these campaigns can become prohibitively expensive
(and unlike "traditional" search engine optimization,
the costs of any PPC campaign are likely to increase
in the near future due to the increased popularity
of this form of advertising). It is crucial to
the success of the campaign that you pay a reasonable
price for each visitor, that each visitor is highly
targeted, and that you monitor your positions
to maintain your exposure over time.
Scott Buresh is co-founder of Medium
Blue Internet Marketing and author of the
monthly Medium
Blue Internet Marketing Newsletter. His articles
have appeared in numerous publications, including
ZDNet, WebProNews, MarketingProfs, DarwinMag,
SiteProNews, PromotionData, and Search Engine
Guide. Medium Blue specializes in search engine
optimization and submission, with clients ranging
from large multinational firms to small localized
businesses.
Return
to FREE articles index |
Visit Our Sponsor! WebPosition
Gold