Pay Per Click

One of the most popular and successful marketing methods available on the Internet today is Click Advertising. Pay Per Click Advertising or Pay Per Click search engine marketing as it’s sometimes called, is one of the best ways for anyone to get immediate results (visitors to their web site, sales, whatever).

The catch is that since it’s so effective and popular, the costs have increased dramatically. What was once a very economical method to advertise your product and service had become more competitive and expensive. Per Click management involves not only the effectiveness of your campaigns, but trying to keep the costs down to acceptable levels.

Google Adwords is by far the most used Per Click advertising method. Since Google is the most popular search engine, it has the most opportunity to display ads along side the Natural Search Results. The advertiser only pays for the advertisement if a searcher clicks on their displayed advertisement. So it provides a great opportunity for companies of any size to advertise and only pay if the advertisement is click on by a searcher.

The recent explosive growth had created tremendous competition for this ad space. What once cost .05 to .10 per click, now may cost over $1.00 per click since so many people are now advertising and competing for the same space. Depending on your profit margin, this expense may even keep some companies from using this method of marketing.

So due to the ever increasing cost, companies are looking for ways to get the best bang for their buck on Pay Per Click Advertising. A good formula to use to determine your budget on any advertising is to take the net profit on any sale and divide it by the cost of each click (example – you sell a product that nets you $20, and your number of sales to visitors (conversion ratio) is 2 sales to 100 visitors, so you divide the number of visitors by the net ($40 by 100) and you get .40 per click max cost). You bid over that cost, and you lose money (using the example .40 would be the max you could pay and even then you’d be pushing it).

Using that information, you can determine your budget for any Adword campaign. The catch 22 here is that many times the competition can drive the cost above your budget for many popular and effective keywords or phrases.

And so the game begins. Advertisers are constantly looking for new keywords or phrases that either don’t have the competition (and therefore high cost). Keyword research becomes critical to success. But there are other ways to play the game, and one is to reduce your cost via Google’s assigned Quality Score.

One of the often overlooked areas to reduce Google Adwords campaigns cost is doing SEO (search engine optimization) on your landing page and web site. One of the best side benefits of using proper SEO methods for organic search results is that you also get better value on your cost per click your Adword campaigns.

Google has a "quality score" they assign to every keyword or phrase in each of your adgroups (an adgroup is a group of keywords and phrases tied in with a specific ad in your campaign). This quality score can now be displayed on each word. To find out how just do a search in Adwords help section.

This quality score is based on several attributes that judge the relationship of the content between the ad, the landing page, and click through rate (CTR) for that keyword or phrase. There are three scores that I have seen (there may be more), Good, OK, and Poor. Good implies that your keyword matches well with your ad and your landing page. OK means that you're close, but not the best. And poor means that you had better change something.

Of course there's also that dreaded Inactive, which means you are not even near the relationship that Google wants to see between the keyword, CTR, ad, and landing page. And you can either raise your bit to $10 or get your keyword, CTR, ad, and landing page in sync.