Pay-Per-Click — Buying Status

Pay-per-click programs (PPC’s) allow you to buy a prime position in a search engine by selecting the price you wish to pay for each visitor you receive. This can place you exactly where you want to be in the listing, or let you decide precisely how much you want to spend on advertising.

The big advantage of PPC’s is that you don’t have to worry about messing with keywords or links or any of that. You can just figure out how much you want to pay for a keyword and buy your position. In addition, you only pay for people who actually click on your link (for banner ads, you often have to pay when someone sees it.) And you can also get cheap visitors. Bids usually start at around five cents per click. The top three bids though are often promoted across a network of sites so there can be big bonuses for bidding high.

This is how most pay-per-click programs work:

 You create your page title, description and link as you want it to appear in the search results.

 You enter the keywords and phrases that will prompt your listing to appear.

 You enter your keyword bid (the amount you are willing to pay for each click to your site).

 Your keyword bid is compared to that of other bidders for the same keyword. The results are returned to the user with the highest bid appearing first.

Show Me the Money!

With PPC’s, the name of the game is profit. You need to be careful not to get carried away with the ranking so that your promotion doesn’t cut into your revenues.

This is essential! There’s no point in being top if you’re out of business in a month. You have to figure out what you can afford and keep to it. Base your decision on your visitor-to-sales-ratio (the number of visitors on average that it takes to generate a sale) and your net profit per sale.

So for example, if you get a sale from every tenth visitor, and you net a profit of $20 from each sale, then you can’t pay more than $2 for each click without operating at a loss (unless you have an effective back-end sales campaign setup as discussed earlier). In practice, you might make one sale for every 100 or so clicks and pay perhaps 15 or 20 cents for each visitor, depending on your market.

It’s absolutely crucial for you to know your visitor-to-sales-ratio.

It’s also important to keep that ratio as high as possible, and that means only bidding on relevant keywords. If you pay for visitors who are looking for something completely different than the services you’re offering, you’re just throwing your money away. They aren’t going to buy, and even at five cents a shot, those wasted nickels soon add up. On the other hand, because you can pay so little, it is worth bidding on as many relevant keywords as possible.

The key is to balance high payments for top keywords with low payments that bring in less traffic.

You should also consider the quality of visitors the site will send you. The more targeted a directory, the better your visitor to sale ratio will be and that might make it worth increasing your bid price.

Submitting to Pay-Per-Clicks

Submitting your site to a PPC is certainly a lot faster than submitting to a search engine or a directory. You must, however, make sure you consider the following:

 The maximum amount you can bid (I can’t stress that enough!)

 The keywords you wish to bid on.

 The titles and descriptions of the site.

That last point is very important for making the most of PPC’s. Just because you don’t have to worry about putting keywords in your title and descriptions to please the search engines, that doesn’t mean relevance isn’t important. On the contrary, relevance still matters. You need to let the user know that your site is exactly what they’re looking for. That means putting the keyword in the title and having a catchy, informative description. Remember, the more good clicks you get, the more money you are likely to make.

Google AdWords

If you do a search at Google, you’ll notice that not only do you get a list of all the sites that return your keyword, you also get a list of other relevant ads on the right of the page and at the top of the listing. These are part of Google’s AdWords program. Advertising like this can certainly be an important part of your marketing plan. Well developed ads with clever wording can prompt an immediate response from the reader to visit your site. Google makes a lot of money with this kind of advertising, and if they’re making money, you can be sure their advertisers are too. You can learn more about Google’s AdWords program here: www.adwords.google.com/select/

Buying AdWords advertising on Google is a relatively simple and cost-effective way to promote your website. In effect, Google has combined the Pay-per-Click system with their own relevancy calculations. To get started, you’ll need to select a keyword and write a short description. You will also have to choose how much you wish to pay for each click, but that won’t guarantee your position.

Google advertisers enter a maximum bid per click and this is multiplied by the click-through rate (the percentage of users who click on the ad). That’s the score Google uses to allocate position. So for example, if you were prepared to pay a dollar per click, and one user in a hundred who saw your ad clicked on it, you would get a rank number of ($)1 x 1% = 0.01.

Let’s say that gives you top position. You might then get even more users and a higher click-through rate of 2%. That higher rate would reduce your price to 50 cents (0.01 divided by 2%).

All very nice, and it’s always fun to pay less than you’ve said you can afford, but how it works is less important than the fact that it does work. All you have to do is figure out how much you’re prepared to pay for each click, how much you can afford to pay each month, and write a great description.

And once again, it’s the description that’s key.

Like the PPC’s, your description has to persuade users that you’re relevant; it doesn’t have to play to the search engine’s software. By all means repeat the keyword, but also make sure you have good, call-toaction copy like “Grab a great deal on DVD’s today!” or “Buy now, while stocks last!” Remember, the more clicks you get, the more sales you’ll make and the less you’ll pay.

Always place your AdWords ad in the most appropriate category and track the responses you receive from it. Be proactive in redefining your strategy if you receive minimal response. You will probably need to experiment with the wording of your ads and your keyword selection for a while until you get the results you want.

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