Introduction to Pay Per Click Marketing by Jim Pretin
If you are starting an internet business, you probably know very little about
internet marketing. There are several different ways that you can get traffic
to your site, but for the purposes of this discussion, we are going to focus on
pay per click marketing, which has become the most popular way to advertise an
online business.
What is pay per click? Well, go to Google, and then type in a keyword or phrase
that you want to search for. Then, at the top of the search results, you will
see a section for what is called sponsored links or sponsored results. These
sponsored links are paying a certain cost per click to be listed in this
special section at the top of the listings. Each one of these websites pays a
certain fee to Google each time someone clicks through to their site.
Each website that uses pay per click (PPC) has to place a bid on how much they
are willing to spend per click for a certain keyword. The highest bidder is
placed in the number one position, the second highest bidder is placed in the
number two position, and so forth. Also, each bidder specifies how much they
are willing to spend per day. Once their daily budget has been exhausted, the
site is removed from the sponsored results until the beginning of the next
24-hour period.
Google is not the only search engine that has a PPC service available. Overture
also has a service, as does Miva, and several others. Each service is tied to
different search engines. If you use PPC with Google, your website will be
listed on Google, AOL Search, and Ask.com. If you sign up for Overture, you
will be listed on engines such as Yahoo, MSN, Netscape, and several others.
Miva is tied to approximately 6 different search engines.
PPC marketing is expensive, especially if you are bidding on a highly sought
after keyword or phrase. Keywords related to auto insurance, or mortgage
quotes, can cost anywhere between $1 - $20 per click or even more if you want
to be ranked in the top position. If the keyword you want to advertise for is
not too popular, the click costs will be much less.
It is possible to spend thousands dollars on pay per click and make zero sales
of the product or service you are selling. Conversion rates for PPC marketing
are usually 2%-5%, meaning that only 2%-5% of the people who come to your
website will actually order what you are selling. So, you need to take that
into account when developing your marketing strategy. For example, if you have
an online business where you sell DVD players and you spend $5 per click with a
maximum budget of $500 per day for clicks received, that means you will receive
100 clicks per day ($500 / $5 = 100 clicks). If a single DVD player costs $200,
and only 2% of the people who visit your website place an order, then you will
receive 2 orders per day (100 clicks with a 2% conversion rate equals 2 sales).
This means that you will make $400 per day, but your daily advertising expense
is $500. So, you have a net loss of $100 per day. So, PPC advertising can be
quite costly if it is not done carefully.
To try to generate a net profit with your PPC marketing efforts, you need to
take into account that most people using a search engine are only looking for
information, and are not planning on buying any products or services. So, make
sure you bid on a keyword that will bring you customers who are looking to make
a purchase and are not there just to gather information. For example, if you
are selling vitamins on your website, and you bid on the keyword VITAMINS, you
will receive a lot of traffic from people who will use your website merely to
read about vitamins. Instead, you should bid on the phrase BUY VITAMINS. In
this manner, you will only receive qualified traffic from people that are
looking to buy vitamins, which will increase your sales and allow you to get
more bang for your marketing buck.
PPC advertising is not necessarily appropriate for every online business. You
need to have a lot of cash to burn in order to compete with the bigger
businesses who are spending hundreds of thousands of dollars per month on pay
per click. If you are operating a website for a small business, you need to
diversify your internet marketing efforts by optimizing your website and
increasing your link popularity so you can climb to the top of the search
engines without having to pay for every click you receive. Also, you should
consider having an affiliate program so that other websites will promote your
business for free as long as you pay them a commission for any referrals they
produce. The best way to approach internet marketing is to use several
different methods that when put together result in an optimal cost situation
for your business and attract a significant amount of targeted traffic to your
website.
About the Author
Jim Pretin is the owner of
http://www.forms4free.com, a service that helps programmers
make email forms.
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