Pay-per-click advertising
What is pay-per-click advertising?
In pay-per-click advertising, search engine listings are guaranteed to appear in response to particular keyword phrases. Advertisers who pay more will usually get higher ranking. The main search engines with pay-per-click listings are Google, Yahoo! and MSN.
This is a quick way to give your web site a high profile, and it is a low-risk form of advertising. You pay the search engine when someone clicks on your ad. You can set a maximum daily budget and will not be billed beyond that.
Being able to track the user from the time they click your ad to the time they leave your site means that you can monitor your return on investment. (Please note that you will need on-site tracking in your site and detailed visitor statistics.)
Pay-per-click will show you how well your keywords are working, and this will benefit your optimisation work to achieve high rankings in the free search engine listings. In the long term, search engine optimisation is normally the more cost-effective online marketing option.
Pay-per-click and organic search results in Google
How do I do it well?
Writing the advertisement
Your ad should be worded in such a way that it only attracts the right kind of reader. You do not want to pay for web visitors who will never buy or use your services. For example, if you are targeting wholesale customers rather than retail, or if your site is of regional rather than international appeal, then you need to specify this in your wording.
Test out different wording. You can rotate the ads, find out which ones get the best response, and remove the ones that do less well.
Have a good ‘landing page’
Make sure your ad is relevant to your ‘landing page’ where the visitor is taken first. Although the home page may be the most important page to you, an inside page might suit the visitor better.
Research suggests that longer copy works better than shorter copy in pay-per-click campaigns. It is a good idea for you to test this for yourself, as your industry may have different characteristics.
In general, longer copy is more likely to answer any questions the prospective customer may have. If your copy is easy to scan, then people who are not yet fully engaged can get a good sense of the page by skimming the content. Others who are more committed can readily find more detail. Copy should be as long as necessary, but no longer. Test what length of content works well for you and aim to incorporate testimonials from satisfied customers.
Choosing keywords
Keyword research is as important for pay-per-click as it is with optimisation to achieve high rankings in the free search engine listings. However, with pay-per-click there are no practical limits on the number of search phrases you can use. Google and Overture both have search phrase suggestion tools which you can use in conjunction with Wordtracker. Start with lots of keywords and then remove any that do not work. Make sure that your keywords do not apply to any other unrelated product or service.
Use tracking URLs
Tracking URLs are very useful, letting you view the activity of pay-per-click visitors in your visitor statistics (provided your stats are sufficiently detailed). They are easy to set up. If the URL of your landing page is www.yoursite.com, point your pay-per-click ads to this page, using an identifier in the URL such as: www.yourdomain.com/?payperclick. This will then show in your stats as an individual entry page used to access the site.
Measuring profitability
You will want to earn more from pay-per-click than you spend, so you should have a measurable goal in mind before you start spending money.
Before you start, identify the cost per visitor for your site. For a given period, this is the profit of the web site divided by the total number of visitors. This will help you to fix the maximum cost you want to pay for each click.
Once your pay-per-click campaign is up and running, you should measure:
- total number of clicks
- average cost per click
- pay-per-click fees
- number of orders
- conversion rate (how many clicks are needed to make a sale)
- average order value
- total sales revenue
- net profit before fees
- net profit after fees
- return on investment
Improve your return on investment by:
- increasing the conversion rate
- increasing the average order size
- lowering the average cost per click
- raising the profit margin
You will want to reach a balance between return on investment and net profit. The key factor is lowering the cost per click.
This is a useful tool to get you started with measuring profitability: http://www.meclabs.com/MaxBidAnalysis.xls
This tool can also help you establish your bidding strategy before you start.
It will show you which keyword phrases you can and cannot afford to compete
for:
http://uv.bidtool.overture.com/d/search/tools/bidtool/
