An introduction to pay-per-click (PPC) « Datadial Blog
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An introduction to pay-per-click (PPC)

There are tales of retired businesspeople or sometimes new parents who leave jobs to raise families, who then get bored of monotony and decide to try and use the internet to cure their boredom. Perhaps this idea was launched after they stumbled across Google AdWords and PPC, both helpful tools in allowing companies to bid on certain keywords and phrases.

It works like this – if their bid is high enough,  the winning bidder pays the bid price which ranges from pennies to pounds depending on the competition for those words. Once paid for, a short advert from that bidders company will appear alongside the search results of anyone typing those keywords or phrases into a search engine or a website. Whatever the winning bid price was, is paid every time someone clicks on the ad. The benefits come from the traffic that is drawn to the site mentioned in the advert.

This may sound great, fantastic even – but there are ways to get it wrong, so read on for some handy tips in getting the most out of PPC:

Measuring Click-Through Rates

The success of pay-per-click is found in how many time someone clicks on your ad. This is called the click-through rate. In theory, a high click-through rate equals one click for every four times the page containing your advert is displayed. However you should remember that you are paying for any clicks, therefore – if no business is gained by the ad being clicked, you are potentially losing money.

This is why decisions about your campaign should be focused on getting customers to spend money on the product or service you supply, rather than simply getting them to click on your ad. Completely removing ad that gets lots of clicks but rarely results in a transaction is an idea; perhaps replacing this ad with of one that isn’t as big of a click draw but ultimately entices more transactions would help.

Understanding Conversion Metrics

Online ads allow for you to calculate the money you will make based on what you invest. Although it can be pretty straightforward in some cases, in others it may not, especially if you are using many different forms of marketing already. Google has conversion-tracking tools designed specifically to determine the rate at which people come to your website through clicking on your ad and actually go on to complete a transaction. This can be in the form of making a purchase, signing up for something or simply joining a mailing list. By telling these tools what different types of clicks on your site are worth, it can calculate what your total return will be.

Setting Manageable Budgets

Figure out where you are getting a positive investment and base your budget primarily around that – and that alone. If you are making money, continue to spend more and keep doing so as long as you are making money. Only stop this if it is absolutely necessary, or becomes too much of an outgoing each month to pay. If you are not making money on a campaign then fix it, or walk away from it but do not throw money away month after month in the hope that things will improve, chances are they won’t.

You’re Job Is Never Done

Make constant changes. Such changes include better ads, better keywords and better methods of converting ad clickers. There are some helpful tools provided by Google that assist you in doing so, such as ‘Bid Simulator’ which predicts how new keywords will pan out. Never assume you can do no better, there is always a way to make extra money, or to ‘right’ any wrongs.

Being Realistic

If your keywords are not highly sought after by other advertisers, then you will probably be just fine. But if you are in a crowded industry facing stronger competitors, then prices can get extremely high for keywords.

You can save some money by using more obscure keywords reflecting your businesses strengths and niches. Also, an ad that makes it to the second or even third page in a search engine is not a bad ad. You can save money this way – instead of doing all you can to land on the first page, which new businesses cannot always afford to do.

Good luck!

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