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

Summarized overview

Questions and subjects discussed in this article:

what is a PPC advertising campaign?
what do you buy?
who do you buy it from?
how much do you expect to pay?
what is the cost-per-unit?
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 premier way of advertising on the internet. A PPC campaign lets you determine exactly who comes to your website. Additionally, an important advantage is that you only pay for actual click throughs to your site. In other words, you only pay if a person clicks on a link or banner and lands on your site (also called pay-for-performance advertising). If the person only sees your link, but does not click through, this is called an impression. You should not pay for impressions.

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
ensure that visitors are converted into customers
stimulate action that brings 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:

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

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

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. A tracking system will tell you why your traffic is low quality.

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.
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?
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. For example, search results on Yahoo originate from Google.

Statistics on the subject of where searches are conducted vary widely. Estimates for Google, the leader, fluctuate wildly, from 35% - 70%. The leaders after Google are Yahoo, MSN, and Inktomi.

List of companies who sell PPC traffic:

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

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:

create account & deposit funds
receive confirmation that your account has been activated
choose your keywords & text
watch your traffic to evaluate your choice of text & words
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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