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Imagine if you could advertise ONLY to people who have actually expressed an
interest in doing business with you? That’s basically
what happens whenever a prospective customer or client types
a phrase into a search engine that’s relevant to your
business. But how do search engines decide which sites are
worthy of top placement in their search results? It turns
out that some of the results are ranked by the search engine’s
computers while others are simply paid advertisements from
companies willing to buy their way to the top using Pay Per
Click Advertising.
Pay Per Click Advertising (PPC for short) is an online advertising
format that allows you to buy your way to the top of search
results pages for search phrases relevant to your business.
Businesses buy advertising on specific search phrases, and
are then charged each time a person clicks through to their
web site.
How does this work?
Try running a search on a major search engine like Yahoo
or Google for a common consumer product like “DVD players.”
When reviewing the results, you’ll likely see a set
of results labeled as “Sponsor Results” or “Sponsored
Link”. Some results may appear in the same format as
the main search results on the page, while others are listed
within colored text boxes along the site of the page. All
of those results are paid advertisements from the sites listed
within the ads.
The ads are ranked based on how much a business is willing
to pay to advertise on each search phrase. In the example
search for “DVD players” the current top advertiser
is currently paying $0.81 per click – one penny more
than the #2 advertiser.
The ads are purchased through pay per click advertising suppliers,
and the two largest happen to be owned by Google and Yahoo.
Google’s program is called Adwords and displays results
on Google.com, AOL, Ask Jeeves, many smaller search engines.
Yahoo’s program is run by an acquired company called
Overture, and the results appear on Yahoo, MSN, AltaVista,
and many other syndication partners.
Why should I pay for traffic?
For businesses that have had success with search engine optimization,
the idea of paying for visitors is not particularly enticing.
However, if you can make more money off a visitor to your
web site than it costs to get them there, why wouldn’t
you pay for those visitors? Keep in mind that you can choose
exactly what search terms you want to advertise on, and you
only pay when a searcher actually clicks on your ad, so it
generally comes down to deciding how much you can afford to
spend for those visitors rather than whether it’s worth
doing at all.
How much should I spend?
The main factors influencing how much money can be spent
on a PPC campaign are:
1. How many searches are conducted per month using phrases
relevant to your business?
2. How much are you, along with your competitors, willing
to pay for those terms?
The average monthly ad spend on PPC advertising is a couple
thousand dollars, but this varies immensely from less than
$50/month for regionally targeted and niche businesses to
millions a month by large national retailers.
The goal of any advertising campaign should be to bring in
more money from the campaign than it costs to run it. Pay
Per Click is no different, but the level of detail you can
measure in PPC is significantly higher than most types of
advertising. For example, with relatively inexpensive (some
are even free) tools, you can determine which ads are generating
sales or leads for your business. Beyond that, you can determine
how much money you spent on a specific ad to generate a sale
or a lead. By measuring what’s working, you can aggressively
advertise on terms that prove to be winners for your business
while shutting down ads that don’t deliver.
Tips for Success
1. Advertise on a large number of relevant search phrases.
Brainstorm beyond the first dozen terms that come to mind
to describe your business. Advertise on the terms used to
describe your products, the product names, product codes,
and the questions a prospect might type into a search engine
that your services answer, and more.
2. Build unique ads for each search phrase. It takes a lot
more time to write a unique ad for each search phrase relevant
to your business rather than creating one ad for all of your
search phrases, but the extra work will definitely be rewarded.
Ads that are aligned with the corresponding search term receive
more clicks, which will mean more targeted traffic, and in
some cases paying less per click (on Google Adwords) due to
the intricacies of how the advertising is priced.
3. Send visitors to the most appropriate page of your web
site. If you place an ad for a specific product within your
online store, don’t send visitors to your homepage and
force them to dig for what they just searched. This will frustrate
your visitors and increase the chance that they’ll hit
the dreaded Back button.
4. Track your results. Spending money without measuring the
return on your investment is not a good business practice.
At the very least, consider installing the free tracking tools
available through Google Adwords and Overture to measure which
terms are delivering results for your business. Beyond that,
consider using a 3rd party statistics tool with conversion
analysis to compile the results of your various pay per click
programs into one easy to manage interface.
Go for it
People are searching for what you sell at this very moment!
If your site is not showing up near the top of the results,
your competition thanks you.
Author bio
Ed Kohler is the President of Haystack
In A Needle, Inc., a web marketing firm in Minneapolis,
MN, offering search engine optimization and pay per click advertising
consulting services.
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