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CPC and Small Business Owners?
If you are running a small business on the Internet as well as running an on and off pay per click (PPC) campaign, then you should familiarize yourself, with the concept of cost per click advertising. This is because both run hand in hand. CPC (cost per click) is nothing but an advertising system where the advertiser pays an agreed cost per click whenever an Internet surfer is directed to his site after clicking on his PPC ad. There is no real concept of a free cost per click, and if there is one it will be with strings and hooks attached.
Cost per click advertising as applied to PPC module has two facets to it: (i) the CPC charged by the publisher, and (ii) the actual CPC incurred by the advertiser depending upon the visitor-customer conversion ratio. Let us take an example to elaborate this point further:
Keyword Bid Cost: $ 4
Clicks received: 5,000
Conversion ratio: 10%
In this example your basic cost per click is $ 4. However, only 500 out of 5000 people have bought some product from your site. So in effect you have spent $ 20,000 (5000 clicks X $ 4) for getting 500 customers. Thus the real cost incurred per click is $ 40 ($ 20,000 divided by 500). In this calculation, PPC management costs have not been taken into account, and if they were, you would have incurred a still higher pay per click cost.
CPC in CPM AdvertisingMost advertisers relate CPC to PPC. In a CPM (cost per one thousand impressions) advertising campaign, CPC is related to CPM. The cost in a CPM campaign is fixed for one thousand impressions. The following example best illustrates CPC in the context of a CPM campaign:
CPM cost: $ 3 (for 1000 impressions)
Impressions generated: 1000
Click-throughs: 100
Cost per click: 30 cents a click
You can see from the above example that no matter what happens, your CPM is fixed ($ 3 per one thousand impressions), but your CPC will depend on the number of clicks you receive - if you receive more clicks, your CPC will come down; if you receive less, it will go up.
Targeted CPM, a new kind of Internet advertising that mixes the advantages of PPC and CPM advertising is fast catching up. This will help optimizing cost per click advertising.Factors to be taken into account for a CPC campaignAny business, more particularly a small business, must control its business to business pay per click
if they want to conserve their marketing budgets. Here are some CPC tips that will lower your costs and help in bringing in a higher ROI (Return on Investment):- Start your PPC campaign with Google AdWords. Yahoo is expensive because they have a huge traffic base due to their content, and their content visitors may click on your ad without giving you any business. Don't touch any other engine unless you are sure it will fetch you results.
- Get your keywords right and make them relevant to your product. If you slip up on keywords, your ad will turn irrelevant. The flipside of this is not limited to the flopping of your campaign: More importantly visitors will form an adverse opinion about your website and will mentally note not to ever click on your campaigns again.
- Combine some kind of free trial with your campaign. That way many visitors will get aware of your products or services, and you never know they might get converted into customers even at a later date.
- Start a newsletter service on your site and collect email IDs. Even if a visitor does not buy anything, he may subscribe to your newsletter because he is interested in your product, and that is why he came to your website in the first place. You can use these emails later to inform the visitor or gently remind him that your product or service is there to help him.
- Get your landing page correct and flawless. It should have no broken links, no mistakes, and should be soberly designed without any flashy graphics. Also remember, it should be relevant to your ad, and the product or service featured there should be the one you have talked about in your ad. Try to make 3-4 different landing pages and use the spare ones when you find that the one being used is not working well in getting customers.
- You may not have parked your ad with Yahoo, but that should not stop you from using their keyword Selector Tool that shows the number of times a keyword/key phrase is searched for on the Internet on a monthly basis. This will give you an idea if the keywords that you have used are popular, and if not then should you revise them.
Use third-party tracking software to figure out how many visitors clicked on your ad, and how many of them got converted into customers. Now reconcile this data with the number of customers who accepted your trial offer and the nu mber who signed up for your newsletter. All these will give you an indication if your campaign is cost-effective or not.
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