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Pay Per Click Basics
Adrian Singer, 04-02-2008For the beginner Pay Per Click marketer, here are some basic principles of PPC you should master:
Rules of the game
1. PPC = You Pay Per every Click to your site.
2. Your goal is to generate clicks by Qualified prospects who are actively looking to buy your product right now.
3. The more Relevant your ad and landing page are to the user's search phrase and mindset, the more sales you'll generate.
Extra Bonus: Search engines reward you for relevancy, letting you pay less per each click.
Making Money with PPC
Net Profit = Gross sales - your internal cost of sales - Cost of PPC
Optimize your PPC campaigns to continually increase Net profit:
(a) Increase volume of Qualified propsects, to Relevant ads, that will Convert well, by adding more keywords to your account
(b) Reduce cost of PPC by eliminating non relevant keyword-ad combinations or keywords that don't match the desired prospect mindset
Your Most Important PPC Metrics
ROI = Return On Investment. How many dollars you earn per every dollar you spend on PPC
Conversion = Visitor to your site who chose to opt-in to your offer and become a Paying customer or Lead.
CR = Conversion Rate. Total conversions divided by number of clicks, yields the percentage of users who opt-in to your offer after viewing your landing page.
CPA = Cost per Acquisition. Total cost divided by number of conversions, yields the average cost per conversion.
CTR = Click Through Rate. Percentage of users who clicked on your PPC ad to visit the site.
How To
Increase clicks:
Add new relevant keywords to your account. Use tools like Google's Keyword Tool or Wordze.
Reduce cost of PPC:
Bid smart. Go for the long tail. Pause all keywords that don't generate a single sale after 300 clicks.
Improve CTR:
Write better, more relevant ads that match the user's search phrase and mindset. 2% CTR is good. Anything below 1% CTR is bad.
Improve Conversion Rate:
Work on your landing page. Experiment with different landing page variations (at least 3). Conversion rate typically average 3% to 6%
Rules of the game
1. PPC = You Pay Per every Click to your site.
2. Your goal is to generate clicks by Qualified prospects who are actively looking to buy your product right now.
3. The more Relevant your ad and landing page are to the user's search phrase and mindset, the more sales you'll generate.
Extra Bonus: Search engines reward you for relevancy, letting you pay less per each click.
Making Money with PPC
Net Profit = Gross sales - your internal cost of sales - Cost of PPC
Optimize your PPC campaigns to continually increase Net profit:
(a) Increase volume of Qualified propsects, to Relevant ads, that will Convert well, by adding more keywords to your account
(b) Reduce cost of PPC by eliminating non relevant keyword-ad combinations or keywords that don't match the desired prospect mindset
Your Most Important PPC Metrics
ROI = Return On Investment. How many dollars you earn per every dollar you spend on PPC
Conversion = Visitor to your site who chose to opt-in to your offer and become a Paying customer or Lead.
CR = Conversion Rate. Total conversions divided by number of clicks, yields the percentage of users who opt-in to your offer after viewing your landing page.
CPA = Cost per Acquisition. Total cost divided by number of conversions, yields the average cost per conversion.
CTR = Click Through Rate. Percentage of users who clicked on your PPC ad to visit the site.
How To
Increase clicks:
Add new relevant keywords to your account. Use tools like Google's Keyword Tool or Wordze.
Reduce cost of PPC:
Bid smart. Go for the long tail. Pause all keywords that don't generate a single sale after 300 clicks.
Improve CTR:
Write better, more relevant ads that match the user's search phrase and mindset. 2% CTR is good. Anything below 1% CTR is bad.
Improve Conversion Rate:
Work on your landing page. Experiment with different landing page variations (at least 3). Conversion rate typically average 3% to 6%
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