Pay-per-click:
Buying your way in
Imagine if you could advertise only to people who have actually
expressed an interest in doing business with you. That's basically
what happens whenever a prospective customer or client types a
phrase into a search engine that's relevant to your business. But
how do search engines decide which sites are worthy of top
placement in their search results?
Some
of the results are ranked by the search engine's computers while
others are simply paid advertisements from companies willing to
buy their way to the top using pay-per-click (PPC) Advertising.
PPC is an online advertising format that allows you to buy your
way to the top of search results pages for search phrases relevant
to your business. Businesses buy advertising on specific search
phrases, and are then charged each time a person clicks through to
their website.
How does this work?
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Try running a search on a major search engine like Yahoo or Google
for a common consumer product like DVD players. When reviewing the
results, you'll likely see a set of results labeled as Sponsored
Links or Sponsor Results. Some results may appear in the same
format as the main search results on the page, while others are
listed within colored text boxes along the site of the page. All
of those results are paid advertisements from the sites listed
within the ads.
The ads are ranked based on how much a business is willing to pay
to advertise on each search phrase. (The ranking order in Google
is a combination of the bid amount and the popularity of the ad.)
In the example search for DVD players the current top advertiser
is currently paying $0.81 per click, one penny more than the #2
advertiser.
The ads are purchased through PPC advertising suppliers, and the
two largest happen to be owned by Google and Yahoo. Google's
program is called Adwords and displays results on Google.com, AOL,
Ask Jeeves and many smaller search engines. Yahoo's program is run
by an acquired company called Overture, and the results appear on
Yahoo, MSN, AltaVista, and many other syndication partners.
Why should I pay for traffic?
For businesses that have had success with search engine
optimisation, the idea of paying for visitors is not particularly
enticing. However, if you can make more money off a visitor to
your website than it costs to get them there, why wouldn't you pay
for those visitors? Keep in mind that you can choose exactly what
search terms you want to advertise on, and you only pay when a
searcher actually clicks on your ad, so it generally comes down to
deciding how much you can afford to spend for those visitors
rather than whether it's worth doing at all.
How much should I spend?
The main factors influencing how much money can be spent on a PPC
campaign are:
How many searches are conducted per month using phrases relevant
to your business?
How much are you, along with your competitors, willing to pay for
those terms?
The average monthly ad spend on PPC advertising is a couple of
thousand dollars, but this varies immensely from less than
$50/month for regionally targeted and niche businesses to millions
a month by large national retailers.
The goal of any advertising campaign should be to bring in more
money from the campaign than it costs to run it. PPC is no
different, but the level of detail you can measure in PPC is
significantly higher than most types of advertising. For example,
with relatively inexpensive (some are even free) tools, you can
determine which ads are generating sales or leads for your
business. Beyond that, you can determine how much money you spent
on a specific ad to generate a sale or a lead. By measuring what's
working, you can aggressively advertise on terms that prove to be
winners for your business while shutting down ads that don't
deliver.
Tips for Success
Advertise on a large number of relevant search phrases. Brainstorm
beyond the first dozen terms that come to mind to describe your
business. Advertise on the terms used to describe your products,
the product names, product codes, and the questions a prospect
might type into a search engine that your services answer, and
more. Read our article, How to find good keywords for more on
this.
Build unique ads for each search phrase. It takes a lot more time
to write a unique ad for each search phrase relevant to your
business rather than creating one ad for all of your search
phrases, but the extra work will definitely be rewarded. Ads that
are aligned with the corresponding search term receive more
clicks, which will mean more targeted traffic, and in some cases
paying less per click (on Google Adwords) due to the intricacies
of how the advertising is priced.
Send visitors to the most appropriate page of your website. If you
place an ad for a specific product within your online store, don't
send visitors to your homepage and force them to dig for what they
just searched. This will frustrate your visitors and increase the
chance that they'll hit the dreaded Back button.
Track your results.
Spending money without measuring the return on your investment is
not a good business practice. At the very least, consider
installing the free tracking tools available through Google
Adwords and Overture to measure which terms are delivering results
for your business. Beyond that, consider using a 3rd party
statistics tool with conversion analysis to compile the results of
your various pay per click programs into one easy to manage
interface.
Go for it
People are searching for what you sell at this very moment! If
your site is not showing up near the top of the results, your
competition thanks you.
This article was written by Ed Kohler. Ed is the President of
Haystack In A Needle, Inc., a web marketing firm in Minneapolis,
MN, offering search engine optimization and pay per click
advertising consulting services. Article originally featured at
Successful Sites.
