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Pay Per Click

Pay Per Click (PPC)

Pay per click advertising (PPC) is a great way to get visitors when you need traffic and you need it now.  The beauty of PPC advertising is that it can be set up and start running in a matter of hours, where as SEO for a keyword takes weeks to start seeing results. But it’s risky: With poor management, you can spend a fortune, generate many visits, but not get the conversions that you are looking for.

What is pay per click Advertising?

In theory PPC marketing is pretty simple: Search engines and services, such as Google, Bing or Yahoo, provide listings on a per-bid basis. These listing are in addition to their ‘organic’ search results, which are still powered by a combination of keywords found on your site, SEO, link popularity and other formulae.

  • These ads are sold in an auction. You bid what you want to pay for a click on the ad. Bid the most and you have a chance of ranking number 1 in the sponsored results. Note that I said a chance. There’s also something called the quality score that can impact your ranking.
  • If someone clicks on your PPC listing, they arrive at your web site, or a landing page designed for that ad, and you are charged the amount you bid. So, if you bid $.15 per click on ‘widgets’, and that’s the highest bid, you’ll probably show up first in line.
  • If 100 people click on your PPC listing, then the search engine or PPC service will charge you $15.00.

Disadvantages of PPC Advertising:

PPC advertising can cost a fortune. It’s possible to get caught up in a bidding war over a particular keyphrase and you can end up spending far more than your potential return. Bidding with an ego, where a CEO, marketer, or someone else decides they Must Be Number One can cost thousands of dollars.

Bid inflation consistently raises the per-click cost for highly-searched phrases. This inflation is caused by ego-based bidding and by the search engines themselves, who impose quality restrictions on many keywords. These quality restrictions increase the cost per click even if no one else is bidding. Junk traffic can suck the life out of your campaign. Most pay per click services distribute a segment of their results to several search engines and other sites via their search partners and content networks. While you certainly want your listing displayed on Google and/or Yahoo, you may not want your listings showing up and generating clicks from some of the deeper, darker corners of the Internet.

The resulting traffic may look good in statistics reports, but you have to separate out partner network campaigns and carefully manage them if you’re going to see a return.

An important fact is that PPC advertising does not scale. If you get more traffic, you pay more money in nearly direct proportion to that traffic – your cost per click stays constant, and your overall cost increases. Compare that to search engine optimization, where you invest a fixed amount of time and/or money to achieve a better rank, and your cost per click goes down as you draw more traffic.

Why PPC is Good:

Pay per click advertising can generate traffic almost immedediately. The concept is very simple: Spend enough, get top placement, and potential customers will see you first, and visit your site. If people are searching for the keyword which you bid and you’ve placed a well-written ad, you will get clicks the moment the ad is activated. PPC advertising is fast: with some systems like Google Adwords, you can generate targeted traffic within a few minutes of opening an account.

PPC advertising is also agile: Organic search engine marketing, SEO, and other forms of advertising can lag weeks or months behind changing audience behavior, you can adjust pay per click campaigns in minutes. That fact alone provides an unmatched ability to adjust to market conditions. PPC can also be a bargain: Sometimes, you can find keyword ‘niches’ for which the top bid is around $.10 – in that case, PPC is a great option, because you can generate traffic to your site for a fraction of the cost of any other form of paid advertising. So, it really comes down to balancing the advantages and disadvantages.  So where does PPC fit in? As a focused advertising tool.

The Role of PPC Advertising:

Most businesses can’t afford to solely rely on PPC advertising (and it would be foolish to do so). It’s too expensive, and bid amounts inevitably climb. However, pay per click can fill a few important roles:

  • Campaign- and issue-based traffic: If you have a short-term campaign for a new product, service or special issue, PPC is a great way to generate hype.
  • You can generally start a pay per click campaign within minutes, and at most, 24 hours, and you can change the text of your ad mid-campaign, so adjusting your message is easy.
  • If you only have a finite amount to time to get attention, PPC is perfect.
  • Direct-response business: If you sell a products or services that can purchase the moment someone arrives at your web site, pay per click is a great tool.
  • Online stores: You know that each click generated is potential customer, so spending money to increase the number of clicks is a no brainer.
  • Niche terms: If you are trying to generate traffic for a very specific keyword, PPC can generally be a bargain. For example, you might not want to pay the top bid for the keyword “snowboard”’, but “Burton downhill 165 snowboard” is probably a lot less expensive.

A general rule of thumb? Precision keyword selection is king! SEO is a content and link based, long-term way to grow your brand and image. PPC advertising should be handled like any other form of paid advertising: Gingerly, and with a clear, quantifiable short- or medium-term goal in mind. In other words, concentrate on conversions, not clicks.

Pay-Per-Click Advertising Explained:

Conversions, Not clicks
How do you engineer a successful pay-per-click advertising campaign?

By paying more attention to conversion, and less to clicks. Keep five rules in mind:

Track Conversions If you want to stay on budget, you have to track the number of conversions. What’s a “conversion”? It’s when a visitor to your web site performs a desired action. An examples of conversions would be:

    • A visitor makes a purchase
    • A visitor fills out a sales inquiry form
    • A visitor downloads an article and registers for an account

A conversion does not have to be a sale, however a conversion has to be worth something to you. If you are unable to think of a measurable, useful outcome of a visit to your site, then you should not spend money on pay per click advertising. Google and Yahoo provide conversion tracking – generally, most other PPC services do not. Google Analytics is a free, one-shot tracking system that will let you measure conversions from all PPC sources. The important thing to monitor is, do the conversions increase after you start your campaign? If so, you’re likely on the right track. If not, then there’s very little chance that your pay per click investment is working.

    1. Manage your PPC Dollars carefully: Set a Sensible Budget, many people ask how much is typically spent on clients’ PPC campaigns. The answer is “a bit less than too much”. Its sort of side stepping the question, but the there is no “right” amount. It depends on your individual circumstances. However, a good formula is: cost per click is less than: conversion rate * total clicks * profit per conversion EG: the amount you spend per click should always be less than the total profit earned per click.  While your initial, direct profit from a PPC campaign may disappoint, you might be acquiring loyal customers.
    2. If you can’t get this kind of precise data, pay close attention to your metrics over time: If your sales, leads or other desired visitor actions increased right after you began your pay-per-click campaign, chances are you’re on the right track. But if you’re selling a product or service, I strongly recommend that you invest the time and energy to collect this data and crunch the numbers – it will pay off in the long run.
    3. Find Niche Keywords! A lot of people aim their ads at the broadest possible terms, such as “doctor”, or “bike parts”, or “search engine optimization”. Because the broader terms get exponentially more searches, it is tempting… BUT there are huge disadvantages. Since everyone bids on the broad terms, the cost per click is generally quite high. The chances of a conversion, even if someone clicks on your ad, is lower. Focus instead on narrow, focused keywords: “skin cancer dermatologist”, “road racing tires” or “Seattle search engine optimization”. These terms will substantially less, and searchers who use them will be far more likely to become a conversion. Google, Yahoo and most other PPC services will show you estimated cost per click and searches per day for keywords – use these tools to test for the best focus, cost and clickthru combination.
    4. As my college english class was called “technical writing”: Do Not Ignore It! Most PPC advertising requires that you write a very brief description about your service. Don’t underestimate the importance of this phrase! Make sure that at the minimum, your grammar, spelling, and overall language is correct and appropriate for your audience. Also verify that your language adheres to the rules enforced by the pay-per-click service – Google, for example, won’t allow ads with superlatives (‘the best’, ‘the greatest’, etc.), with repeated keywords, or with excessive capitalization. As an example, this is a failed ad attempt: Super Awesomest Best John’s Widgets! BUY NOW! BUY BUY BUY! This is much better: High Quality John’s Widgets, Free Shipping. See the difference? Get specific. Why would the reader want to click on this ad?
    5. Go for quality! Google etc now have a thing called a Quality Score. They examine:
      •  Your ad Ad performance
      • The quality of the page to which the ad points
      • Keywords in the page the ad points to

Based on various factors in all these, search engines will either increase or decrease the bid amount necessary for you to gain a specific position. If you want a great quality score, you need to: Build your history. The longer you’ve run a specific campaign, ad group and ad without changes, the better your history. Never stop testing ads and run multiple versions of very similar ads to see if one performs better for one reason or another. Constantly test for the best clickthru rate. Higher clickthru rates will probably give you a better quality score. Put keywords in your ads. If you’re buying the phrase ‘nubwit’, make sure ‘nubwit’ shows up in the ad. Put keywords on your landing page. Make sure the page to which you’re pointing your PPC ad has those keywords as well.  Split good keywords from bad ones. Put high-performing ads and keywords in their own campaign. Otherwise the bad performers will drag down the good ones. Focus your campaign by time of day, geography, search network, etc.. If you don’t know what this means, you need to hire someone who does.

Adjust, Adjust, Adjust:

This isn’t so much a rule as an overarching concern – don’t set up your ads and then forget about them. You need to continuously manage your PPC campaigns. Someone could  outbid you, or someone might have dropped out of the top spot, meaning you can reduce your bid and stay ranked #3. Search patterns may have also changed. If search patterns change and your keywords are searched less often, don’t immediately alter your campaign – wait at least a few days to make sure you aren’t seeing a statistical ‘blip’. But keep an eye on things, always, or you might end up spending money unnecessarily. In my experience, a well-designed campaign needs to be ‘tweaked’ every few weeks.