What is Pay-Per-Click? Pay-Per-Click (PPC) is a paid form of advertising, popularized
mostly by the "search engine" GoTo (now called Overture). The
concept is fairly simple. Businesses bid to be placed at or
near the top of the search results for particular keyword
phrases. The bidding is done on a "per-click" basis, meaning
that a company pays a specific amount every time the engine
sends them a visitor. In addition, the top results on Overture
also show up in the results of many of the popular search
engines (usually listed as "sponsored" or "featured" results).
Google has also recently come up with a similar version of PPC
(AdWords Select) that has taken over some of the engines that
used to display Overture results (most notably AOL Search).
Advantages Pay-Per-Click campaigns have some advantages over traditional
search engine optimization. First of all, they require no
changes to a current site's content or look to obtain top
positions, just a willingness to pay. Also, the implementation
of a pay-per-click campaign is relatively quick- it can take
just a few minutes to start getting targeted traffic, versus
sometimes months for standard SEO campaigns. Finally, unlike
search engine optimization, the implementation of a PPC
campaign is relatively easy and does not necessarily require
any specialized knowledge (although experience with search
engine marketing and keyword research is a definite advantage).
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Limitations Of course, there are limitations to this type of advertising.
New bids can lower the positions of other firms, and many will
react by raising their bid to regain a previous ranking.
Monitoring of positions becomes crucial. These campaigns can
also become prohibitively expensive, depending on the
competitiveness of the keyword phrases and the aggressiveness
of the competition. In addition, many of the "savvier" search
engine users have learned to recognize PPC results as paid
advertising and bypass them without consideration.
Determining Visitor Worth Determining how much each website visitor is worth is vital to
the success of a pay-per-click campaign. If it costs $50 in
click-throughs to make a $40 sale, the campaign has failed.
The formula is relatively simple, but some specific historical
data is necessary. In the most rudimentary form, it is the
profit from the website over a given period divided by the
number of total visitors for the same period. If a site netted
$1000 in profits from goods or services in a given period, and
there were 2,000 visitors during the same period, each would
theoretically be worth 50 cents (profit divided by visitors).
But this is only the breakeven point. Depending on the desired
profit margin, the optimal price to pay per click would
probably be something much less than 50 cents. Popular keyword
phrases can often run more than this, so it then makes sense
to bid less money on less popular terms to pay an acceptable
amount per visitor.
Selecting Keyphrases: As with typical search engine optimization, keyword research
is critical to the success of a PPC campaign. Unlike typical
search engine optimization, there aren't practical limits on
the number of phrases to target. Usually, there is no extra
cost to add as many keyword phrases as possible. This makes
the keyword selection process easier, since there is not a
good deal of resources committed to optimizing a site for a
particular keyword set. Under-performing keywords, while still
an annoyance, do not cost extra (except for the time involved
in setting up the account). To help identify keyword phrases,
Overture has a tool on their site that allows advertisers to
see how often particular search terms are actually typed in
their engine. It also gives out popular suggestions based upon
the terms you enter.
Writing descriptions: With a typical search engine description, the object is to
entice as much traffic into a site as possible in the hopes of
converting that traffic into customers. With PPC, a different
approach is mandated. It is undesirable to pay for unlikely
prospects, so the description is designed to eliminate the
"tire kickers" while attracting highly targeted traffic. For
this reason, the description should describe exactly what the
business offers- a company wouldn't want to pay for every
visitor looking for "insurance" if they only sold renter's
insurance, for example. At the same time, proven marketing
copy techniques should be employed to insure that the
description is enticing enough to attract ideal prospects.
Monitoring and Analyzing: It is crucial to the success of any PPC campaign that it be
monitored regularly, since positions can and do change every
day. Since the top three Overture or Google AdWords results
are what typically show up on most partner engines (some
display more), the competition for these spots can be fierce,
and bidding wars are common. If the price gets too high, it is
usually prudent to withdraw and pursue a different keyword
(the only way to really "lose" a bidding war is to pay too
much for each visitor!). Apart from position monitoring, it
is important to track and analyze the effectiveness of
individual keyword phrases on a monthly basis. Viewing
click-through rates and studying visitor habits can lend
valuable insight into their motivations and habits, and help
to further refine a Pay-Per-Click campaign.
Pay Per Click campaigns can bring large numbers of highly
targeted visitors to your website. However, these campaigns
can become prohibitively expensive (and unlike "traditional"
search engine optimization, the costs of any PPC campaign are
likely to increase in the near future due to the increased
popularity of this form of advertising). It is crucial to the
success of the campaign that you pay a reasonable price for
each visitor, that each visitor is highly targeted, and that
you monitor your positions to maintain your exposure over
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