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What is PPC?
Pay-Per-Click is a paid form of
advertising. The concept is fairly simple. Businesses bid to
be placed at or near the top of the search results for
particular keywords or 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.
Advantages
Pay-Per-Click advertising has four
major advantages over traditional search engine
optimization:
1.) It requires no changes to a current site's content or
look to obtain top positions, just a willingness to pay.
2.) It may well generate the most targeted traffic, as
you are only paying when people have clicked on your ad
after searching for keywords you selected
3.) There is no term of commitment required, and…
4.) There are no overages as you set the maximum you are
willing to spend. For example, you could choose to spend
$100 to “test the waters” until it’s gone.
Just before your $100 is depleted by click charges, they
will send you an e-mail asking whether or not you would
like to deposit more funds in your account. If you do,
great! If not, that’s your decision.
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.
THE PROCESS
Determining Visitor Worth
Determining how much each website visitor is worth is
vital to the success of a pay-per-clickcampaign.
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, a
keyword analysis 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).
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 key phrase (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.
SUMMARY
“Pay-Per-Click”
advertisements are highlighted listings at the top and/or
to the right of most searches. Yahoo calls them “Sponsored
Matches” and Google calls them “Sponsored
Links.” Basically, advertisers bid how much they
are willing to pay to come up in those positions whenever
someone searching types in select keywords and/or phrases.
Click rates range from as little as $.05/click to as high
as $50/click! How much the rate is depends on how many
businesses are competing for those keywords or phrases.
While there are many sites that offer pay-per-click
advertising, the major players are Overture and Google,
and they alone are the providers of paid listings to the
most popular search engines. Overture ads appear in
Yahoo, Alta Vista, MSN, CNN.com and
Info Space. Google’s ads appear in AOL, Netscape,
Earthlink, Compuserve, Shopping.com, AT&T Worldnet,
AskJeeves.com, About.com, Lycos, The New York Times,
InfoSpace, Reed Business, howstuffworks.com, business.com,
food.com (The Food Network), HGTV.com (Home and Garden
Television) and, of course, itself.
Following is a summary of Lighthouse Marketing Group's
Pay-Per-Click Campaign Management service:
- LMG will provide a detailed
Keyword Analysis
- LMG will provide assistance with determining visitor
worth
- LMG will provide assistance with writing descriptions
- LMG will Setup with Overture and Google of up to 100
key words and phrases
- LMG will write up to 25 ads to be linked with the
keywords and phrases
- Campaign monitoring, analysis and revisions for up to
60 days each
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