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Pay-per-click (PPC) advertising and campaign management

Summarized overview

Article Updated: May 2009
Questions and subjects discussed in this article:

  • definition: PPC advertising campaign
  • definition: impressions
  • PPC market leaders: what and where to buy
  • clickstream analysis and keyword selection
  • cost-per-unit and what you should expect to pay
  • how to evaluate the traffic you purchase
  • the difference between quality and quantity
  • importance of conversion rate metrics

Pay-per-click advertising

Pay-per-click (PPC) advertising and campaigns are the primary way of advertising on the internet. As of May 2009, the three largest players in the market are Google, Yahoo, and Bing.

A PPC campaign lets you determine exactly who comes to your website. You only pay for clicks to your site; if a person clicks on a search engine result, link, or banner and lands on your site (aka PPP pay-for-performance advertising). If the person only sees your link, but does not click through, this is called an impression.
Impressions are "the number of promotional units a person is subjected to" (Cone, S. 2008. Powerlines) You do not have pay for impressions. There are also pricing models based on impressions, which charge per thousand (CPM). Whether or not the purchase of impressions is interesting for you depends on your product and target audience.

Using clickstream analysis, a tracking system will tell you what people do on your site once they arrive through PPC advertising. This information is necessary to manage your advertising, and determine the best ways to:

  • obtain quality traffic
  • convert visitors into customers
  • create action that generates revenue

PPC advertising is based on keyword selection. The entire internet advertising market revolves around choosing the correct search terms and keywords. Well managed PPC advertising will bring traffic that achieves your goal, or 'desired outcome', whether it is to publicise an event or sell goods and services.

Important aspects of PPC advertising for managing campaigns.

Quality is more important than quantity.

‘Quality’ traffic refers to traffic that is well-targeted. This means that the visitors:

  • are looking for what you are advertising
  • enter the site and look around
  • complete a transaction or become a lead (i.e. convert)
  • come from countries and regions that you are interested in
  • return to visit your site again

Quality traffic will bring you a higher percentage of success, in terms of seeing your visitors complete a transaction, or subscribe to the service that you provide.
Conversion rate analysis will allow you to determine which traffic sources turn visitors into leads and sales.

Conversion rate is the statistic that tells you what percentage of your visitors are converted from visitors into customers/ leads. High quality traffic will deliver a higher conversion rate. Conversion rate is another way of talking about your return on investment (ROI) and acquisition cost-per-visitor.

How to use tracking to evaluate PPC campaigns

A tracking service will allow you to:

  1. Check how effective clicks are and adjust campaigns accordingly:
  • see which keywords and search terms bring more visitors
  • learn which advertising copy is most effective
  • know which source/ search engine brings the best results:
  • at the right price per click (cost acquisition per customer)
  • determine conversion rate and set goals
  1. Accountability: make sure you are getting what you pay for
  • source of traffic: country, etc
  • how long do they stay, how many pages viewed? Average number of page views from one search engine might be lower than another

Please click here to read our recent article on "how to update PPC campaigns with search term data"

We cannot stress how important it is to actively manage your PPC campaigns. Update your keywords, campaigns, vendors, and bids as frequently as possible, as your budget allows.

What can a tracking system tell you about the quality of your traffic?

Low quality traffic may overload your server(s), spike your traffic & frustrate you. More importantly it is a waste of time, money, and resources. It will create false expectations. A tracking system will tell you if / why your traffic is low quality.

  1. Does it come from a country which is not your market? For example a place where most people do not have credit cards or are not interested in buying real estate in Canada, because they live in China.
  2. Do the visitors land on your homepage and leave without clicking any further? Visit duration is an important statistic which tells you if people are interested in your site. How many pages do the visitors look at?
  3. Are the visitors presented with a link to your site when they search for a related keyword or search term? This is called phrase matching. The worst-case scenario is when your link is presented randomly, or as a pop-up.

Where should I buy PPC advertising traffic?

There are many sources to purchase clicks from, we recommend that you try more than one service, and compare results. Many sites use search results originating from a small number of search engines. This type of system is called a "content network". The major PPC vendors such as Google and Yahoo also place content within their own networks. For example, they place advertisements alongside like content.

The PPC vendors distinguish between 'Sponsored Search' results and 'Content Match' placements. Sponsored searches place results alongside search engine results. Content match places results near articles, email content, forums, etc. In our experience you will obtain a higher conversion rate with sponsored searches, which also cost more.

Statistics on the subject of where searches are conducted vary widely. Estimates for Google, the leader, are as high as 80%. The leaders after Google are Yahoo, Bing. Many smaller search engines come and go, as they are purchased and incorporated into the larger search engines.

List of companies who sell PPC traffic:

Google, Enhance (ah-ha), Overture, FindWhat, Kanoodle, ePilot, LookSmart, Search123, eSpotting.

NOTE: the list above dates from several years ago and demonstrates some examples of search engines which have disappeared. Do some research to determine the current "hot" markets.

The advantage of paying for your traffic is that most campaigns can be implemented immediately, although it will take several hours to set up your first account. Depending on your budget, you can pay for a high ranking and see your advertising online within an hour. The disadvantage is that you have to pay every time a person clicks on your advertisement.

Therefore we recommend that all PPC campaigns are accompanied by ongoing efforts to improve your Google pagerank and optimise your site for search engines. These results are free and cannot be directly purchased, although you can hire a company to perform search engine optimization (SEO) on your site.

How to start your PPC campaign

The best thing to do is to run a few PPC accounts and run your campaigns for a set period of time and compare results. The standard setup procedure involves:

  1. create account & deposit funds
  2. receive confirmation that your account has been activated
  3. choose your keywords & text
  4. watch your traffic to evaluate your choice of text & words
  5. adjust your bids/ budget accordingly

Most PPC campaigns allow you to bid on your position. This means that you can bid on the number one position in the sponsored listings category. Bidding can be very competitive, with advertisers paying above $5 per click. Consider your price an acquisition cost-per-customer. It is part of the larger picture of website management strategy.
Once your visitor arrives, you must ensure that they find what they are looking for, and in the words of many marketing consultants; that you are able to guide them to complete actions that you desire, for example:

  • placing an order
  • completing a transaction
  • making a reservation
  • becoming a lead
  • signing up for a newsletter

Several studies have demonstrated that once a visitor makes a purchase on a site and effectively becomes a customer they are likely to return again. In this way a high acquisition cost can be justified, when ROI is taken into account.

Creating a PPC advertising campaign may seem daunting at first, however with a little research, you can design your own campaign, and reach a larger percentage of your target audience. Whether you manage your own campaign or hire somebody to do it for you, we are of course interested to hear from you and offer any advice that we can.

 

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