Paid Advertising – Pay Per Click

Pay per click is the method of buying ad space on the Search Engine or the Search Engines network. This is the quick method to rank highly for certain keyword phrases. This section explains how Pay Per Click works for advertisers and the benefits and disadvantages.

How Pay Per Click Advertising Works

The basis of Pay Per Click is that the advertiser only pays when a visitor clicks on their advert.  This method changed on-line advertising and also helped to make Google become the powerhouse it is today.  In the first quarter of 2009 Google’s revenue was $5.51 billion

The Benefits of PPC

• The adverts are shown to people who have typed in your keyword phrase, so it’s relevant traffic and the potential customer is already in the buying cycle.
• The adverts are not only shown on the search engines but also in the content network. This includes thousands of websites which display ads alongside their website content.
• Adverts can be segmented by location and language.
• Many Tools to help with PPC keyword research.
• Low cost and quick to set-up.
• Easy to track, measure and tweak if needed.
• No coding required.

The Disadvantages of PPC

• If competition is high it can be very expensive.
• Needs to be constantly checked and monitored or you could be losing money.
• The price has risen in general for cost per click.
• Open to abuse see Click Forensics.

Planning and Setting Up a Campaign

There are many factors that go into the cost of a Pay Per Click advert.  It pays to research your business, target audience, the industry and the competition.

Before creating the Advert – What do you want to achieve?

• Plan and set clear targeted business objectives and goals – Do you want sales, customer feedback, downloads, more brand awareness?
• Landing Pages need to be defined and prepared around keywords and what you hope to achieve.  When a visitor clicks your ad the landing page should direct them where you want them to go.
• Define and plan your campaign around your budget.

Understand the Metrics

Working with PPC campaigns involves working with lots of numerical data, and a few abbreviations. It is essential you understand these to help run your campaign

• Impressions – The number of times an ad is shown on-line.
• Conversion – This is the goal of your campaign, it can be a sale, download, feedback.
• CPC – Cost per click.  The cost of each individual click from a visitor.
• CPM – Cost per Impression.  The cost per views of your web page (no clicks just views).
• CTR – Click through Rate.  The percentage of times the advert has been clicked.  Clicks divided by Impressions.
• Conversion Rate – The percentage success rate of the advert to convert.  Conversions divided by clicks.
• CPA – Cost Per Action.  How much it cost to achieve the conversion. Total Cost of advert divided by number of conversions.

Keyword Research

Keyword research is essential, the keywords in your advert must be relevant to the page the advert is based upon. Understand which words you need and don’t need and don’t forget to include the Long Tail Keywords.  Get some ideas from Keyword Analysis Research and SEObook Keyword Research Tool.

Pay Per click Adverts are based on Keywords which have a direct connection to the webpage you are trying to advertise.  If the Search Engine thinks the keywords are relevant to the content of the webpage, the search engine will treat your ad more favourably (Google calls it a quality score between 1-10). The better the relevancy (Quality Score) the less cost you have to pay each time your ad is clicked (Cost per Click).

The CPC of the ad also depends on the competition for that word or phrase and the amount people are willing to pay for an advert.

Create Interesting and Attractive Adverts

On completing the Keyword Research it is now possible to create your adverts and to promote your products and services based around your keywords.  The adverts must refer to a landing page and have a clear relevant URL (address) link showing.

Add your PPC Bids

The maximum bid you place will depend on your business goals, competition, keyword research  and your budget. Be cautious to begin with to get a feel for the popularity of a keyword and when you feel confident raise your bids.

You may begin with a very high bid but find you could achieve the same results by tweaking your ads, undertaking more keyword research or by finding a different position level for your ad on the page.

Once the advertiser has created an ad the Search Engine

• checks the ad against it’s best practise policies.
• displays the ad.
• decides the rank and position of the advert based on the advertiser bid and the relevancy of the ad.

PPC never stops – Track and Analyse

PPC advertising requires continual monitoring and updating.  It is possible to spend thousands on campaigns that do not convert.  There is also the opportunity of new words to be found and researched.  By identifying words that are successful you can focus more funds and/or create new ads that are variations of the successful ad.

These are links to the main search engines Pay Per Click information Google, Yahoo and Bing.