13 Aug Pay Per Click: The Value of Clicks and Conversion
Pay-per-click (PPC) marketing refers to an advertising model which enables marketers and advertisers pay only when a user clicks the ad. Major search engines like Google and Bing implement a bidding system to make the PPC advertising available. The winning bidder gets to secure the highest placement, based on its Quality Score.
Marketers need to create ads so they will be shown in paid search results. Then they need to create keywords and search phrases that those ads will show up for. The PPC ads typically appear above the organic search results. Organic search results just means that the search pulled up their site based on their SEO, not their ads. The search engine will charge a small fee to the marketer if the user clicks on the ad. Regardless of the total number of times the ad appeared, payment will only be required if the ads are clicked, but keep in mind that your CPC (Cost Per Click) will increase if your CTR (Click-Through Rate) is low.
Ad spots are sold on an auction basis. For your ad to be shown in the search results, maximizing your bid amount & quality score is key. Note though that winning with just increasing your bid amount is not guaranteed and a poor methodology to rank higher.
So when someone clicks on your listing, they will be redirected to your website or page that you’ve chosen. You’ll be charged an amount depending on what you bid. So for instance: your maximum bid is $2, and it’s the highest bid, there’s a great possibility that you’ll secure rank #1 if you also have a high-quality score. If 200 individuals get to click on your PPC listing, you will be charged a maximum of $400.
What makes PPC important to Digital Marketing?
PPC advertising plays a vital role in generating traffic for your website, and potential customers will learn about your business and services. Your copywriting skills will also be vital to the process because a well-written ad will capture your target’s attention. Once ads are activated and they start running, you’ll get clicks.
PPC advertising generates traffic fast.
For Google Adwords, targeted traffic can be generated within minutes of opening an account.
PPC advertising provides great options.
If your objective is to generate highly targeted traffic to your website and paying a fraction of the cost of indirect advertising, PPC provides you a much better alternative.
What challenges are there in PPC advertising?
In a bid to stay ahead of your competition, the costs associated with PPC advertising can run up so quickly. When you’re in a bidding war, especially over a specific keyword or key phrase, you might find yourself spending more than your expected potential return. Bid inflation is one of the challenges you may face. The per-click cost of highly-searched phrases is raising over time due to more competition and people running more ads.
Pay More Attention To Conversion
Clicks don’t guarantee results unless these clicks are converted. That said, you need to keep five golden rules in mind to increase your chances of converting clicks into real sales:
1. Monitor Conversions
Sure, someone clicked your ad. Hundreds of them actually, but are you getting real results? Unless a visitor takes the desired action, those clicks won’t be valuable to your business. Conversions involve making a purchase of your products, filling out a sales inquiry form, or downloading a white paper/any learning resources from your website. When we say conversion, the first thing that will often come to mind is that you made a “sale”.
It doesn’t have to be a sale. Conversion can be anything that’s valuable to you. Any measurable success that you gain is an indicator that your PPC advertising campaign is paying off. If there isn’t any measurable success, then you’re not getting a useful outcome.
2. Spend a sensible amount for your advertising campaign.
You don’t have to blow your money on advertising campaigns just to get real results. Setting a sensible budget keeps you on the right track. There’s no specific amount to spend on your campaign. It depends on the goals and circumstance. So if you’re wondering what a sensible budget is, a good formula will be:
Cost per click less than the conversation rate x total clicks x profit per conversion
The rule of thumb is to spend less than the total profit you earned per click. So for instance, you spent $2 per click for customers to visit your website. You know that not everyone who visited your website will take the desired action. So if 25% of those visitors contacted you regarding your product, and that 30% bought something, the average profit you get from those purchases will be $10.
You’ll also know that you get 200 clicks per month. So if you’re going to use the formula for determining PPC budget, you’ll know how much it would cost you to run a campaign each month (Anything more than $150 would be costing you more money than you’re making from it, keep in mind that you also have to take into account the CLV).
Find out if there’s any significant increase in your leads or sales after you began your campaign. It indicates that you’re pointing in the right direction.
3. Search for niche keywords
Are you bidding on broad terms? If so, the cost per click is higher but the chances that someone will click on your ad are lower. Instead of aiming for the broadest search terms, focus on the narrow and more specific keywords. Say, for example, you’re selling tires. Choose “road racing tires” instead of “tires”. These terms are going to be more specific for the audience that you’re trying to convert and will typically yield better results!
4. Don’t Ignore Good Writing
Never underestimate the power of great copywriting! It can create a powerful impact on your ads. Check your grammar, spelling and overall language. Be sure it’s appropriate for your target audience. You’ll also need to verify if your language follows the rules that the advertising platform, like Google, enforces. There are instances when excessive capitalization, repeated keywords or the use of superlatives, like greatest, best, etc, are not allowed.
5. Take Care of your Quality Score
Search engines, like Google, are picky about Quality Score. To determine your quality score, Google checks your keyword, ad, landing page copy, click metrics, onsite usage metrics etc. Depending on how well you’re doing on all of these elements or factors, the search engine will have the complete control of whether to increase or decrease your bid amount and adjust your page position as well!
The best practices for improving your quality score include:
- Include keywords on your landing page
- Include keywords in your ads
- Test your ad copy
- Prioritize high-performing keywords
PPC may be a very basic digital marketing tool, but your business definitely can’t afford to ignore it. Focusing on conversions is essential in creating a profitable campaign and getting desirable results.
Got a pay-per-click campaign, but don’t know where you need to improve? Get our FREE 30-minute audit and we’ll make a thorough evaluation for you!