PPC: Pay-Per-Click

A beginners guide to pay-per-click advertising.

Introduction

How does pay-per-click advertising work? Basically, your ad will only come up on search engines results for certain keywords which you bid on and you pay a rate that you specify for every visitor who clicks through from the search engine results page to your web site. Each unique keyword phrase has its own bid price and you set the budget. High rankings with SEO are what every webmaster wants but SEO is getting more and more competitive. High SEO rankings are the beach-front property of the Internet - demand is always going up, but supply is always staying the same. For webmasters who don't have the patience, time, or skills to excel at SEO, pay per click allows you to get your web site listed as many times as you want and you set the price.

Most web site advertisers tend to fall into either the SEO or PPC camp. SEO is good for people who are willing to wait 6-12 months for their SEO efforts to bear fruit. But if you need to start making money right away then PPC would probably be a better way to go. PPC is also good if you have a web site that makes a lot of money and can buy relatively cheap clicks. That way you are earning a positive profit on your marketing investments and all you have to do is scale your marketing. Many SEO sites, on the other hand, are pure content sites that make money from ads and don't necessarily have the revenue to allow them to run a PPC campaign - which would cost a lot of money.

Every search engine has rules regarding keywords and how you write the ads. These are very important and should be read before planning a PPC campaign. You'll also want to read through the PPC forums on various webmaster forums on the web to do some basic learning.

1. Find the Right Keywords

Finding the right keywords is a whole business in itself but this is just the basics. A good basic tool to do keyword research is the overture keyword suggestion tool. You can find other useful PPC research tools on my PPC Links page. You need to pick out the words related to your product or service. The best way to find the best keywords are to experiment with different ones and seeing which ones actually convert to sales. As a beginner you will want to avoid generic keywords (which are popular) because they are expensive and you'll want to stick with cheap keywords while you are still learning so you don't waste money. This means you'll want to target specific multi-word phrases that'll be less popular.

2. Writing the Ad

In order to make your pay-per-click advertising campaign work well you will need to be able to write a compelling ad to entice users to click on your ad. You’ll want to write at least 3 or 4 versions of your ad with different titles and descriptions. Ads with the keyword in the title and description will bring in higher conversions. This is important to do with Google Adwords since Google automatically bolds the keyword in your ad and makes your ad stand out. You will want to test the different versions of your ad. Google can even rotate your ads and put up the ad that performs the best.

All ads that are written basically have the same goal - attract users attention, interest them in your product/service, and demand "action" (i.e. "Buy this movie"). You ad should be creative and set you apart from the others. Don't make the ad too long. Some people think that the more information the better but you should realize that most search engine users will be scanning the results from a search. Make the ad concise - use the fewest number of words you need.

3. Bid

When bidding on keywords you'll want to be on the first page in order to get your ad the exposure it needs. Ranking high also serves as a test for your ad to make sure it is written well enough to get the right number of click-throughs. So you'll want to big high enough to get good ranking but you'll also want to stay within the budget that you set that makes sense for your web site.

4. Have a good web site

Having a good web site is just as important as anything else (maybe more) because once they get to your website you still have to convert them into sales. This means having a professional web site with good design, layout and navigation that will impress visitors. Sometimes you will have as little as 3-5 seconds before a visitor decides to stay on the site or leave. You'll also need to have a relevant landing page for the ad. You should experiment with different landing pages to see which one is best.

5. Performance tracking

This involved monitoring your PPC campaign so you can tweak and improve it. You'll need to crunch the numbers and see if the sales from click-throughs are greater than your advertising expenses. You'll have to be able to differentiate the traffic from your PPC campaigns from your other traffic.

REVENUE = Impressions X (CTR) click-thru rates X conversion rate X avg sale
COST = (CPC) Cost per click x number of clicks.

where:
Impressions = The number of times you ad is shown.
Click-thru rates = The % of times your ad is clicked on.
Conversion rate = The % of visitors who came to your site through your ad who actually spent money.
Average Sale = The average amount of money that a someone spends at your site.
Cost per click = The amount you spend on advertising divided by the number of clicks.
# of clicks = The number of clicks on your ad.