Pay per click (PPC) advertising has expanded rapidly as a way to very selectively target customers. This is a look at PPC marketing and how to use it to your best advantage.

Why Use PPC?

When administered properly, PPC advertising has the following advantages:

• Targeted customers are coming to you and are searching for the topics you have selected.
• Advertisers only pay when a potential client actually clicks on their ad.
• Campaigns can be set up and edited almost instantly.

Disadvantages of PPC:

• Fraud, such as competitors clicking on your ads to increase your costs, can be a problem.
• Costs are increasing as PPC becomes more popular and competitive.

Impressions and Click Through

The first goal of PPC adverting is for your ad impressions (how often your ads appear in search engines) to generate clicks. This is called the click through ratio (CTR). Test the appeal of your ads by rotating them (most PPC services offer advertisers the option of displaying more than one ad).

Conversion Ratio

For your PPC campaign to be cost effective, you must also consider your conversion ratio (the amount of clicks that actually lead to sales). Watch your conversion ratio to measure exactly what kind of return you are getting for your advertising dollar. Keep track of your CTR costs, conversion ratio profits and adjust your campaign accordingly.

Low Conversion Ratio

If your conversion ratio is low, you might consider adding more specific wording to your ads to weed out those who might not be interested in or able to purchase your product before they click. You can also set your ads to appear only in certain geographic regions or at times where you have found higher conversion ratios. Finally, it may be necessary to redesign your site or consider if your product is really practical to sell through PPC.

Ad Positioning

PPC campaigns work like auctions with advertisers bidding for top positions. The CTR is much higher for ads within the top three listings and drops dramatically after the first page. The second listing is considered best by many advertisers because the top spot often generates many impulsive clicks that have a poor conversion ratio.

Advertisers occasionally drop out and the price of tops bids can sometimes decrease. Periodically check your bids to ensure you are not paying any more than needed.

Long Tail Keywords

Long tail keywords are specific chains of keywords that people sometimes search for. For example, instead of software, a long tail keyword that people might use in searches could be “keyword finding software”. If you are selling software that does this, it would be wise to bid on a phrase like that instead of just “software” since you will likely get a lower price and more targeted customers. Target your most effective keywords with the most ad money.

Content Network

If you use the content network in your PPC campaign, your ads will also appear on other websites. These ads are generally less effective than ads that appear on search engine result pages and should have lower bids.

In Summary:

• Keep track of your bids to insure you are at the optimal position and price for your budget.
• Use long tail keywords for lower bids and more focused clicks.
• Try different ads for best CTR and target them to appear at the best times and geographic areas for your product.
• Use the conversion ratio to keep track of your sales and weigh the results against your costs.
• Ads with more specific wording may reduce your CTR but increase your sales/clicks ratio.
• Remember content network ads are generally less effective than those that appear in search engine results.
• Back the best keywords and ads with the most money.

While PPC offers many opportunities, advertisers must carefully monitor their campaigns to avoid the pitfalls and get the best possible return on their advertising investment.