Pay Per Click Advertising Issues
The Players
The three largest PPC companies are Google, Yahoo, and MSN. There are many other smaller players on the market, but the above three own the search market. Smaller search engines have minimal traffic compared to the big three.
Use the big three for the following reasons:
? Yahoo, Google, and MSN handle over 95% of all Internet search. The smaller search engines have little traffic.
? They are reputable companies, actively fighting click fraud
? Quick feedback
? Scalable performance
? Excellent tracking
? They provide higher quality traffic
? Simplified management
Losing Money With PPC
Running a successful PPC campaign requires skills. It takes time to learn the ins-and-outs of PPC. Expect to lose money, et least in the beginning. Start with a small budget. Think of the money you spend as tuition. You are learning a valuable skill that helps you build a successful business.
The following are among the most important subjects you have to learn:
? The buzz words such as CPC, CTR, etc ? Writing effective ad copy ? Testing ads ? Bidding practices ? Ranking strategies
Learning is important because you are up against larger companies with more experienced PPC managers. Not only that your competitors know more than you, they might have larger budgets. As you study your competitors? PPC ad campaigns, you might be looking at something that has been tested for years.
Bid Management Strategies
Never start the bidding process until you?ve determined the highest amount you can bid on a keyword phrase. Pay no attention to how much others are paying for a keyword. The two most important factors to determine Before you do anything else, understand your conversion rate and your average order size. If your average order size is $100.00, and your average CPC (Cost Per Click) is $2.00 with a one percent sales conversion rate, it will cost you $200.00 to make $100.00. Sounds like a bad idea.
Your conversion rate and your average order size are the two most important factors determining your maximum CPC. The maximum CPC is not set in stone. Improving you conversion rate will decrease your CPC. Let?s see how the results of the previous example influenced by doubling your conversion rate. Your average order size of $100.00 with a two percent conversion will result in a much lower CPC. Now, with 2 percent conversion you CPC is $1.00 instead of $2.00.
As the clich? goes, if you can?t measure it, you can?t manage it. PPC advertising is a business process that has to be measured. Understanding the numbers is essential as you determine the effectiveness of your campaign. Is your business growing as a result of PPC advertising?
George Meszaros with Webene http://www.webene.com
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