Services: Pay-Per-Click Marketing Strategies
Understanding Pay-Per-Click
 There are two primary ways to improve your ranking with the
search engines: A.) “Organically” which is fine-tuning your web
site for maximum rankings and then submitting it to the search
engines and waiting for results; or B.) Pay-Per-Click - Bidding
on select key words and “Pay-Per-Click throughs” to your site.
If they click on your sponsored listing and go to your site, you
pay whatever your bid is for that particular phrase. This can
‘guarantee’ top placement with the search engines. You chose a
monthly budget and when your budget runs out your sponsored
listing comes down. You will see these sponsored listings along
the top and right side of search engine results pages.
Both systems are quite a bit more complicated than they sound to
implement.
Pay-Per-Click (PPC)
Pay-Per-Click (PPC) requires a bit more analysis and strategy:
all of the above plus... review of your key word strategy,
competitive spending/bids, search counts, conversion rates
(visitors who come to your site and turn into buyers), profit
per conversion and return on investment calculations. All of
this leads to a PPC strategy and budget that will give you an
action plan to control your spending and results. PPC gets
faster results but requires a dedicated monthly budget. This
budget and strategy can then be modified on the fly to optimize
your results.
The Basics
For instance, let’s say you wanted to appear in the top listings
for “toy airplanes”. You might agree to pay 35 cents per click.
If no one agrees to pay more than this, then you would be in the
number one spot. If someone else later decides to pay 36 cents,
then you slip into the number two position. You could then bid
37 cents, if you wanted to, and move back on top.
The Downside
Be aware though, that there is a certain point where the
purchase of that ranking may be the wrong move. What if you are
paying 86 cents per click (purchasing the key phrase “toy
airplanes”) and you get 10,000 new visitors. Of that 10,000, 2%
of those visitors ‘convert’, or buy your product. (Barnes and
Nobles and Amazon usually get about 12-14% conversion.) So you
have just made 200 new sales… of $5.00 toy airplanes and made
$1,000 or $900 after your cost of goods sold (COGS). But, it
cost you $8,600 in “click-throughs” to do that. You got 10,000
new visitors and increased your sales, but you are $7,700 in the
hole!
How To Fix It
Take that same scenario and change it slightly. Instead,
purchase the key phrase “plastic toy airplanes” for $0.25 and
direct those clicks directly to your Premium Plastic Plane that
you sell for $15.00. You get 10,000 visitors and maybe increase
your conversions to 3% since you are going directly to the
Premium Plastic Plane page. Now you have sold 300 Premium Planes
for a total of $4,500 in sales (with a COGS of $3.00 each or
$900). You made a gross profit, before advertising costs, of
$3,600 and a net profit of $1,100 for the same amount of
traffic.
What changed between a loss of $7,700 and a profit of $1,100?
The amount of visitors was the same. Your conversation rate of
those visitors increased, the price of the product you featured
increased and had a higher margin and cost of the keyword phrase
decreased. Finding the right bidding/marketing mix is critical
to having a successful Pay-Per-Click strategy.
Excerpt from an article Paul Metheney wrote for Pros
Communication. See the
full article here.
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Friday, July 25, 2008
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Featured Service
Pay Per Click Advertising -
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