PPC (Pay Per Click) advertising is perhaps one of the most popular advertising models on the internet, currently utilized by Fortune 500 companies and small business alike. Google AdWords is the most famous and most popular PPC advertising program available, and if you’ve ever clicked on a link in sidebar of a site then you have probably clicked on an ad that was created within the AdWords program. The concept is simple – you pay the advertiser (Google in this example) every time they send someone to your site.
Using PPC advertising can give you highly targeted traffic because it simulates having a top ranked site for the keywords of your choice. Companies and website owners bid on keywords, and the more they pay, the more their link appears in the search results. While being at the top of Google for the keyword of your choice may seem appealing, PPC advertising can quickly diminish your advertising budget if you’re not careful. The following information reveals when PPC advertising is friend or foe.
Low Competition Keywords
Bidding on low competition keywords can have one of two effects – it may give you access to an untapped traffic source, or it could waste your money as their is simply not enough public interest in the keyword. Even if there if interest and you get plenty of clicks in a short amount of time, there is no telling how well this traffic will convert to sales. The goal of a PPC campaign is to gain more in sales than you spend on advertising, and in order to do this you’ll need to either perform extensive testing, or understand your conversion rates beforehand. Finding the right keyword to bid on is the name if the game in PPC advertising, and while it may be tempting to bid on a highly popular keyword that on the surface appears to be profitable, it is important to keep in mind that you’re competing with companies that have very ‘deep’ pockets.
After Conversion Rates Are Established
Perhaps the best way to get the most out of your PPC investment is to thoroughly establish what your conversion rates are for specific keywords before pouring money into a campaign. For example, if you know that for every 100 people that visit your site you get 10 sales, and your item costs $5, then you make approximately $50 for every 100 people that visit your site. Thus, you would not want to pay more than $0.25 per click ($25.00 per 100 clicks) because you would be exceeding a safe investment level. After you’ve established your conversion rates and you’re having success with a particular keyword then you can begin upscaling your PPC campaigns for even greater success.
If your site is relatively new and you’ve not yet established a reliable and consistent conversion rate then you should proceed with caution when attempting your first PPC campaign. Unfortunately, investing a small amount at a time will not give you a solid indication of a campaigns potential success, which is why most people wait until they’ve had conventional SEO success before moving into PPC advertising.