For any business wanting a serious online presence, PPC is a must. Google is putting the squeeze on traditional SEO tactics in an effort to force firms to PPC, and here’s the alarming truth: it’s working. Businesses that do not already have a significant online presence will find it increasingly difficult to enter the market without paying to play. There is good news, however.
A well-managed PPC campaign can hardly fail to be an asset to a business.
That’s fine, you may say, but what does well-managed really mean, and how do I get there? The key to managing a PPC campaign correctly lies in knowing your numbers. When PPC campaigns are conducted according to the numbers, they will generally succeed in generating revenue, and at least have little chance actually costing the business more than they take in. To understand why, it is important to understand a little about what PPC is and how PPC campaigns work.
PPC campaigns are a form of advertising wherein the advertiser pays a company, usually a search engine, to advertise their business to people whose searches or other internet usage history indicates they may be a good customer for that business. The advertiser pays the company doing the advertising, not a general flat fee as is the case for most traditional media advertising, but instead for each person the company actually entices to visit the site. This is the “click” in “Pay Per Click”. PPC campaigns are usually based around one or more “keywords”, words the advertiser chooses that signal to the search engine that a user is a potential client of the business. When a user searches for one of these keywords, or a similar term, the search engine then displays the ad to the user. If the user clicks on the ad and is sent to the business’s website, the business then pays the advertiser for that “click”. With lots of competition among many businesses for most keywords, search providers generally rely on a system of bids to determine which business’s ads get displayed, with preference going to those businesses that offer the highest bids. We have previously covered the importance of choosing keywords that accurately reflect your business. What we are going to discuss today is the importance of deciding your bid amount for a given keyword, and how to accurately arrive at a figure.
Remember how earlier I discussed the importance of knowing your numbers? Here’s where those numbers figure in (pardon the pun). A good webmaster keeps track of site usage statistics, including things like number of visits to the site. These visits can be correlated with sales figures to produce a stat called the “conversion rate”, which is the rate at which clicks turn into sales. This number can also be combined with sales averages to produce an average sale per conversion. This figure is extremely important to the PPC rubric.
An effective PPC bid is one that takes into account conversion rates and average sales per conversion in order to produce a cost-effective target bid for any PPC term. A cost-effective bid is one that produces a certain amount of revenue per click. This figure is easily arrived at by dividing the average sale amount per conversion by the conversion rate. This number can then be divided by the bid amount per click to arrive at the amount of sales each cent of advertising is buying. While different businesses may decide differently what level this figure needs to be at to be cost-effective, what does not vary ids the fact that in the constantly shifting environment of the internet, a well-managed campaign responds constantly to changing figures to alter keyword choices and bids in an effort to keep appropriate margins.
If this all seems pretty technical and detail-intensive, rest assured, it is. What business owner has the time to keep up with all these figures and calculations? That’s where The Click Experts comes in. We have PPC account managers who are skilled in these calculations and who take the time to get to know you and your business in order to most effectively manage your PPC campaigns in a cost-effective way. We also keep current with the ever-changing rules and terms of service the various PPC providers set in an effort to make sure the money your business spends on PPC advertising is truly spent how it was intended to be spent. (For more on PPC providers constantly changing terms of service, see our previous blog post on the subject.) The Click Experts has the expertise your business needs to correctly leverage the vast opportunity for additional revenue that PPC marketing can offer. Contact us today to see what we can do for you!
To learn more about PPC advertising with Google, watch this short informational video:
