Calculating Your Cost-Per-Click
The Pay-Per-Click (PPC) online marketing method has a sales component called the Cost-Per-Click (CPC). The CPC is exactly what it says it is in that it is the cost the advertiser pays for every click they receive during a PPC campaign. Determining the CPC is extremely important because it will help the advertiser determine what their return is on their marketing investment, and it will also help the advertiser to use more accurate cost figures for future campaigns.
Determine What Kind Of Return You Want
How many dollars in revenue do you want to generate for every marketing dollar you spend? To answer this question, you have to either really know your marketing numbers or be a digital marketing expert. In the world of marketing, making four dollars for every marketing dollar you spend is a high return. Since we are being optimistic in this piece, let's use the 25 percent return on investment to figure our CPC.
Using Your Conversion Rate
Before you can accurately calculate your CPC, you need to have a run of sales figures in front of you to analyze. You need to know things like the cost of the product you want to sell and how many online customers your sales team has to talk to before getting a sale (conversion rate). If you have a $1,000 product and it takes 100 leads to generate an online sale, that gives you a one percent conversion rate.
Your return on investment indicates that you want to spend $250 to make a $1,000 sale for this item. If your conversion rate is one percent, then you need to spend $2.50 per click to make a $1,000 sale. The formula you can use would be:
(Product Sale Price X Online Sales Conversion Rate) X Return on Investment Ratio = CPC
CPC For Generating Leads
The CPC formula we just provided is ideal for online retailers who sell to end users, but that is not the only use for a PPC campaign. Many businesses use PPC advertising to generate quality leads that their sales people can use to close deals in business-to-business situations. A large majority of these sales happen offline, which means that every lead generated by a PPC campaign needs to be as qualified as possible.
This formula gets a bit more complicated, but it is not that hard to follow. You have to multiply the amount of revenue generated for each sale, by the percentage at which your link clicks turn into leads, by the closing percentage for your sales team. Then you multiple that number by your return on investment. It would look like this:
(Item Sale Price X Lead Conversion Ratio X Sales Department Closing Ratio) X Return On Investment = CPC
If you are selling a $250 item and you are converting two percent of your clicks into leads for a sales department that closes 30 percent of its leads, your CPC would be approximately $.04 (using the 25 percent return on investment from earlier).
The difficult part with PPC advertising is that you have to try and outbid other advertisers for prime space on a page or placement in a banner. Unfortunately, that variable cannot be expressed in these formulas because you never know what someone else will bid. But at least you will know the CPC you need to use to reach your goals and maintain your profit margins.
4 Ways To Drive PPC Conversions
While all marketing is designed to sell products or services, some forms of marketing are expected to get more direct results than others. For example, the investment a company makes in pay per click marketing is considered successful when the conversion rate is high. The conversion rate is the percentage of clicks that turn into sales, and the number needs to be high if a PPC campaign is going to be considered successful.
There is plenty of talk about how to improve PPC campaigns to make them more effective, but what clients really want is information on how to increase their conversion rate and get more sales out of their efforts. Increasing your conversion rate occurs when you improve your campaign, but there are other things you can do to increase conversions when you are using a PPC marketing approach.
Be Mindful Of How Your PPC Affects Other Marketing Programs
There are metrics you can use to see how changes in your PPC program not only affect your return on that investment, but also on how they affect other marketing approaches you are using. Does your PPC changes increase the effectiveness of your email marketing campaign? It is important to keep an eye on the dynamics between all of your marketing programs if you want to get the most out of them.
Are You Thinking For The Future?
Is your PPC campaign designed to appeal to the customers you have now and the new customer segments you want to attract? While good marketing is only done at an identified target audience, you can expand your marketing influence by including keywords in your PPC campaign that start to draw in audiences that you plan on targeting in the future. This is how you lay the foundation for future marketing success, and how you can use your PPC keywords to grab the attention of people who don't yet realize that they need or want your products.
Are You Relying Too Heavily On PPC?
The response from PPC marketing is meant to be immediate, but it is not always the best approach to take. When you spend time examining the effects of all of your marketing programs, then you start to see what types of effects your PPC campaign has on audiences and how you can enhance your marketing results by the proper balance of all of your marketing campaigns.
Which PPC Outlet Is The Best For Each Campaign?
A professional marketing organization will utilize all of the available PPC platforms to reach your audience, but you want to identify the best platforms to maximize your campaign. If you notice that Bing reaches a more technical audience, then you can use a PPC program based on the Bing search engine to sell your more technical products. By analyzing each platform and understanding the audiences they reach, you can get great results with each of your PPC campaigns.
The point of a good PPC campaign is to drive conversions and bring in revenue. More than any other form of marketing, a PPC campaign is expected to generate revenue almost immediately or else it is considered a failure. In order to increase your PPC conversions, you need to look at how your PPC campaign works as a part of your marketing efforts, and then maximize those efforts to get the best results.
How To Improve Your PPC Results
When we talk about any Internet marketing campaign, we always mention updating each campaign as an important part of the work that has to be done. But what does that mean? In the case of a pay per click (PPC) campaign, there are several things that you and your Internet marketing partner can do to improve each campaign and tweak it as you go along.
Each PPC campaign should focus on a specific message or product to be successful. But your focused approach does not have to stop with a single product or marketing message. If you are noticing that customers are more interested in certain features on that product, then narrow your message down to those features to increase your PPC results.
Don't Oversell It
Unless you have documented proof that your product is the best of its kind every manufactured, then avoid putting words to that effect in your PPC ad. As you analyze your PPC ad, try to remove any phrases like "top seller," "best ever," or "most innovative" in your copy. Let your message and your product stand on its own merits and do not try to oversell your product in your PPC campaign.
Become An Expert At Writing Titles
You will hear marketing experts expound on the benefits of good titles on a regular basis. But in a PPC campaign, your title could mean the difference between success or failure. A PPC ad has very little text in it, so your title becomes an extremely important element to your entire PPC campaign.
Try To Include Special Characters In Your Content
When we say that you should include special characters in your content, we do not mean astericks or brackets. We mean characters such as the copyright symbol and the trademark indicator. These types of symbols tend to draw people to your PPC ad and will increase your click-through rate. The caveat to using these symbols is that you should only use them if they actually apply to your company. If you are not the registered owner of a particular trademark, then do not put the trademark symbol in your ad.
Forget About Pricing
The price discussion is one that happens later in the sales conversation, which means that it should not be part of your PPC advertising. When you are creating a PPC ad, you want to grab the attention of the reader because your product solves a need that reader has. If the ad is successful at getting the reader's attention, then the reader will click on the ad and you can then offer discussions about pricing.
Always Keep The Customer In Mind
You and your marketing team may be in love with one of the features on your product, but it is another feature that is getting consumers' attention. Always use the information from your ongoing analysis of your PPC campaigns and develop content that appeals to the consumer and not your own preferences.
A PPC campaign can be extremely effective if it is done properly. By monitoring the results of your campaigns and paying attention to what consumers are telling you, it is possible to develop PPC campaigns that increase revenue and deliver a significant return on your investment.
5 Reasons Your Pay-Per-Click Campaign Failed Miserably pt2
There are no absolutes in this world, but there are trends that we can use to avoid utilizing bad marketing tactics. When it comes to pay per click marketing, there are a lot of mistakes you can make that will cost you money. But there are four critical errors that are sometimes made in pay per click campaigns that not only diminish the results the campaign gets, but they could also damage future campaigns as well.
Not Matching Landing Pages With Ad Content
A well-written pay per click ad is going to get people clicking on the link to find a certain type of content. When people click on a link and wind up at a landing page that has nothing to do with the ad content, then consumers feel duped into seeing something they don't want to see. That is why you must be sure to create a relevant landing page for every pay per click campaign, and make sure that every link you use in your pay per click campaigns point to the right landing pages.
It is acceptable to keep old landing pages available on your website, but only if those pages are part of a pay per click campaign that is still going. Once you end a pay per click campaign, you should take down your landing page and develop a new one for your next pay per click campaign.
No Call To Action
A call to action statement at the end of your pay per click ad helps give your ad a sense of completion for the consumer, and it also inspires your audience to take action when they are done reading the ad.
A call to action can also be important if you want your audience to do something other than clicking on a link. For example, if you want customers to call a phone number or click a link for more information, then a quick call to action will make that clear and get you better results.
No Dynamic Development
When you first release a pay per click ad, it is not going to get you the results that you want. This is almost guaranteed in every campaign you will run. If you want better results, then you need to engage in ongoing development of your pay per click ad. If you are not using dynamic development to change your ad based on your results and the trends of your audience, then you will never give yourself the opportunity to maximize your results.
Not Analyzing The Competition
What is the competition doing with their pay per click ads? Is the competition doing something consistently that would indicate that it is working? In the business world, you cannot live in a bubble. You must analyze what the competition is doing, and use the competition's own success against them.
You Didn't Make Changes During The Campaign
If you are running a pay-per-click campaign and you are getting consistent data that tells you that a particular set of keywords is not working, then you need to change those keywords. Too many people allow a flawed campaign to run and then wonder why the results are not what they wanted. Monitor your pay-per-click campaign and make changes to improve its results as the campaign moves along.
You Didn't Hire A Professional Organization
A good pay per click campaign is developed over time and conditioned to reach a certain type of audience. When you find pay per click tactics that work, you should utilize those tactics and continue to develop them for future success. When your pay per click campaign starts to show poor results, then they are reasons for that. Your job is to find the reasons, correct them, and get your pay per click campaign back on a successful path.
5 Reasons Your Pay-Per-Click Campaign Failed Miserably pt1
After investing a significant amount of time and money into a pay-per-click campaign designed to introduce your newest product, you were disappointed at the lackluster results you saw. As with any type of Internet marketing, pay-per-click marketing is not for the faint of heart. It is as much an art as it is a science, and there are some very good reasons why your latest pay-per-click campaign failed miserably.
Your Timing Is Awful
Did you know that the best day of the week to search for new help wanted ads is Tuesday? Did you know that the best time on Tuesday to look for those ads is 11:00 a.m.? Recruiters know this type of information because they need to be able to maximize their efforts when it comes to finding the right candidates.
Is your market ready for a new product from your company? Are you overlapping product releases and flooding the market? Have your customers already spent their budgets and now have no money to buy your new product? With pay-per-click marketing, timing is everything. If your timing is off, then your results will not be what you want them to be.
Your Keywords Are Old
The Internet has created its own vocabulary that marketing experts struggle to stay up to date with each and every day. When was the last time you updated your pay-per-click keywords? Is there Internet slang involved in your marketplace that you are not using? If your keywords are old, then your results will be poor.
Your Campaign Did Not Run Long Enough
If your research shows that you need a pay-per-click campaign to run for six weeks to be effective but you only have the funds to run it for three weeks, then you should wait until you have the rest of the funds before you start your campaign. You can't buy momentum for a marketing campaign, but you can lose all of your momentum if you do not run your campaign long enough.
Your Network Is Not Reaching Your Target Audience
Internet marketing professionals are constantly updating and changing their pay-per-click networks to make sure that they accurately reflect the trends of each network. If you are not using the right kind of pay-per-click network for your marketing campaign, then you will not reach your target audience.
Successful pay-per-click campaigns are created for customers by experienced and professional marketing organizations. If your campaigns are consistently not working, then it is time to question whether or not your marketing organization is getting the job done for you.
Good pay-per-click programs can significantly expand your company's marketing influence, and boost your sales. But when things start to go wrong with your campaigns, you need to make changes if you want to get the best possible return on your marketing investment.
How To Increase Web Traffic For Your Sales Promotion Using Pay-Per-Click
As Google and other search engines continue to put content ahead of keywords, the door has opened for Internet marketing companies that can create pay-per-click programs that reach very specific types of audiences. While Google has always been an effective pay-per-click platform, the truly creative Internet marketing companies are also discovering the power of Facebook in driving traffic to a customer's website.
Facebook Is Becoming The New Google
The big reason why Facebook is becoming the new place to host pay-per-click programs is because more and more people are using Facebook to find information. Instead of going to Google, users are starting to use Facebook to look up companies and get breaking news.
This transition to Facebook means that search terms are starting to become extremely important to Facebook users, and that opens the door for pay-per-click marketing. Internet marketing companies are starting to craft ways to use Facebook searches to drive more traffic to websites, and the success rates for growing web traffic are becoming extremely impressive.
Boost Your Latest Promotion
For businesses that truly want to reach a large target audience, investing in Google and Facebook pay-per-click programs will definitely get results. The idea of boosting a single Facebook post has been replaced with the concept of investing in full Facebook marketing programs. The return on that investment can be significant, and it can really help your latest promotion to succeed.
The reason that Facebook is so effective in boosting web traffic for promotions is the manner in which Facebook categorizes its users. Advertisers can break down a Facebook audience in a variety of ways and create a pay-per-click program that will reach a targeted audience that will be interested in your promotion. You can create specific ads for your promotion, or you can create entire marketing campaigns that will drive steady traffic to your website.
Google Can Still Run Your Web Promotion
While Facebook is picking up momentum in the Internet search area, it still has a long way to go to unseat Google as the Internet's search engine of choice. The best pay-per-click program is one that is based on Google's extensive network, and enhanced with Facebook's many marketing options. By combining the power of these two Internet marketing giants, you can put your pay-per-click ads in front of millions of potential clients.
A significant advantage that Google offers is the ability to put your pay-per-click ad on search result pages ahead of even the top results. When your advertising is pushed to the very top of Google search result pages, you will definitely see an increase in web traffic.
These days, the Internet marketing firms that can combine Facebook and Google into a powerful pay-per-click campaign are going to get you the best possible results. Google's enormous network of resources and Facebook's ability to reach a very focused audience can be brought together to get you web traffic results that you have never seen before.
The Beginner’s Guide to Pay-Per-Click Part II
Last week, we highlighted some of the basics of PPC, so this week we’ll take things a step further and talk about some of the ways you can leverage PPC to improve your business.
Use PPC to test your product ideas
Remember that old saying ‘build it and they will come?’ Yeah, that’s not true. I mean if everyone who ever owned a business instantly got paid because they had a product, we’d all have billion dollar-plus valuations and you wouldn’t be here and we wouldn’t be writing this.
Sad to say, but great products don’t build great companies. Go to any market in Asia, Australia or South American and you’ll find things there you can’t find anywhere else in the world, but then again – you can’t find them anywhere else in the world. To get products off the ground – you’ll need to ASK people if they’d use your product first.
PPC can help you conduct real, meaningful market research on your product to see if A.) There’s a demand for your product and B) if people would be interested in signing up to test your product. Gaining this information will help you pivot and adjust your offerings to better meet the needs of your audience.
Make sure you’re not a victim. Find your audience first, then launch the product second.
PPC for Nonprofits
Yes, political people figured it out, too….
Now that we’re done with the buzz kill, politicians are important to watch – not just for the obvious reasons – but also for how they raise money. Those implications are broad for nonprofit organizations who are always money-starved and looking for new ways to attract donors.
The one thing politicians have learned and leveraged well is that it doesn’t matter what kind of media people are using – if you can get in front of them, you can get your message out. Plain and simple. So if you’re a nonprofit, you need to tap into the minds of those who are already looking to hand you money.
PPC can help you get in front of those eyes and find the best ways to reach those who want to hand you money by targeting the right key words and phrases for your campaign. PPC simply gives you a cost-effective way to ask so that you can receive.
PPC to test advertising
Sounds dizzying, right? Advertising your advertising?
Remember the company HipChat? They were the company that used a popular billboard to advertise their site. They did well, got backlinks, free media mentions, PR, etc. but they also spent $7k to run the advertisement for four weeks.
So will you get the same results if you buy a billboard? Probably not! But the point here is that offline ads are really expensive. PPC can help you test out your messaging FIRST before you plunk down the big bucks for the traditional stuff. Not only can you see whether your ad will work, but you can also maximize its potential.
Use PPC to test titles
Ever wonder why some companies are successful and others just bust? How some conferences and events end up filled to the brim while others look like sponsored ghost towns? Sometimes, it has to do with something as easy as the title of an event.
Titles, product names, event descriptions – they can have a dramatic impact on your success or failure. They help garner buzz, interest and eventually – money – from your core demographics. PPC allows you test titles and product names to see which ones gain the most attention. It also helps you get over your own creativity. More often than not, the thing WE THINK is a great idea, isn’t. PPC can certainly humble you and in many ways – save you from yourself.
The Beginner’s Guide to Pay Per Click Part-I
If you’ve been considering PPC advertising, then you’ll inevitably have some basic questions about the platform and how it works. That’s what we’re here to do in the next week or two. In this easy, go-to guide, we’ll answer some of the most common questions we’ve been asked by PPC beginners and hopefully give you all the information you’ll need to make what we think is an important decision. Let’s jump right in!
What is it?
Pay-Per-Click (PPC) marketing – at its core – is a form of web advertising that allows you to place ads in search results or elsewhere on the web. You pay when a customer clicks on your ad, as opposed to simply paying for the space. In recent years, PPC marketing has broken into two main forms:
- Search engine advertising – Like Google Ad Words, when you sign up for an account you bid on certain keywords in order to have your ads appear in results when someone performs a search relevant to your business. The system itself is incredibly intuitive, allowing you to query just what it is a searcher is looking for so business owners like you can focus in on that audience. Unlike broadcasting out to broad audiences like you would with TV or Radio, search engine advertising allows you to prime the proverbial pump and speak directly to people ready, willing and able to buy from you now.
- Partner Network Advertising – If you’re looking for more of a ‘big blast,’ then Partner Network advertising is for you. How it works is that advertisers will purchase ads from a company that owns several websites. The ad then gets placed on all or some of those sites – allowing advertisers to cast a wider net. Partner Network Advertising also tends to be significantly cheaper than Search Engine Advertising, too.
At its core – pay per click is ‘pay to play’ – meaning that it’s a great way to pay as you go for results. Organic Search marketing is a great way to get free advertising but just like Pay Per Click, comes with it’s own challenges, so we recommend a mix of both to ensure maximum success.
But nobody clicks on ads, ever!
NOT TRUE. One of the biggest lies that circulates the Internet marketing world are the folks who claim they’ve never clicked on an ad. In fact, people click on ads all the time. Here’s why:
- Google makes 98% of its revenue from ads – Yes, you read that right. Google’s advertising is a $40 billion/year juggernaut. They don’t make that money if someone isn’t clicking on an ad.
- Searches with high commercial intent get twice as many clicks as organic results – While it’s true that organic results on the WHOLE get more clicks, when people are looking to buy – it’s the advertisements they’re clicking.
- No right hand column with ads means people can’t tell the difference – Don’t believe us? This study says so (and there are some others, too)!
Why people click
While there isn’t a magic formula to speak of and yes –the margin for error is big, we can make some pretty concrete assumptions about why people click on web ads. Here are a few:
- They don’t know it’s an ad – Like we said above, many ads don’t look like ads, so users can’t tell the difference. Regardless of intent of the link, people are still clicking. They wouldn’t have searched for the subject material to begin with if they didn’t intend to click on something.
- The ad is relevant – Ads get clicked – most of the time – because people want to buy. Ads can most certainly be the best answer to their query ‘question.’ Product ads that answer specific questions are especially appealing because buyers know exactly what it is that they’re looking for. Once you factor in Google’s Quality Score system – results become beneficial to everyone. Google serves up ads that are most likely to get clicked (they win), Buyers get more results to products they’re more likely to buy (they win), and advertisers get a better chance of making the sale (they win, too).
- Indirect attention – Sometimes ads get posted that might not necessarily be DIRECTLY associated with the searcher’s query. In other words, this is side traffic. Have you ever been distracted on the web? Then this is you.
Granted, we’re dealing with human psychology here, so you’re dealing with any number of random variables. As such, the rule of thumb should always remain the same: try to make your ad the most relevant results possible for a given search query.
Be sure to check back next week for part-II where we dive into the various uses for PPC as well as budgeting and whether your business is a good fit for PPC. marketing.