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How to Maximize Pay Per Click Returns
In 2005, $ 5.75 billion was spent on search engine marketing. Out of this $ 4.7 billion was spent on pay per click (PPC) advertising - and that is a whopping 81%!
Of course, all this is good news for ad networks and affiliates, but let us also spare a moment in silence and think about the PPC advertisers - Did their PPC ads make a profit for them? Or did the cost of PPC advertising do them in?Returns on a PPC campaignThe cost of PPC advertising is based on the keyword cost. Now these keywords are getting costlier by the day and the ad network experts are of the opinion that the big players have not yet fully entered the PPC market space. Once they do, the pay per click cost can skyrocket, and getting a decent return will get tougher by the day.
Hence, it is important to take necessary steps to ensure that your PPC campaign is a profit PPC rather than a dud or a loss PPC.
The return on investment (ROI) on a PPC campaign can be best illustrated with an example
Your product's selling price: $ 20.
Net profit margin, after all expenses, but excluding the PPC campaign cost: 15%.
Keyword bid cost: $ 2 per click
Total clicks received: 10,000
Click conversion: 1,000 (10%)
Total Ad expense: $ 20,000 (10,000 X $ 2)
Sales generated: $ 20,000 (1,000 X $ 20)Net profit: $ 3,000 (15% of $ 20,000)
Loss after PPC costs: $ 17,000
In the above case, good money has been lost on the PPC campaign. Had a breakeven analysis been conducted before the campaign launch, it would have been figured out that you needed to advertise on low-priced keywords instead of the $ 2 keywords. It goes to show that you should bid more if your product is either highly priced or you have crazy margins of as high as 50+ %, and you expect good sales volumes to happen because of the PPC campaign.
Make no mistake: There's no quick money to be made just by running a PPC campaign. If you feel you cannot afford it, then you must concentrate your efforts on ranking higher on a natural search and you can do this by writing SEO (Search Engine Optimization) content on your website.Maximizing ROIIf you want a positive ROI out of your PPC campaign, or if you want to minimize your expenditure on a PPC campaign that is giving you nothing, there are certain fundamentals you need to follow:Analyze dataIf you have launched a PPC campaign earlier, go back and study its statistics and figure out what you got and what you gave. Sit down with a professional and study the Industry PPC success statistics. Figure out how well your competitor is doing with his PPC campaign. The long and short of the whole exercise is to get a ROI on your PPC expense. You need information to decide if you are generating the best pay per click revenue from your PPC exercise and if it is worth it in the first place. Set the campaign durationYour PPC advertisement should feature on the Internet anywhere from 14 to 30 days. Make it short and sweet before it turns vapid and sour. If a campaign goes on for too long without any tangible benefits, then it only shows that either you have lots of money to waste or you do not respect your investors' sentiments. Test your campaignWhen your campaign is running, test it by monitoring keywords, phrases, and the landing pages on your website. If there is a fault with any of these, rectify it.Fine-tune your campaignLearn what the testing has taught you. Are you happy with the clicks? Is the click-conversion ratio adequate? Are you earning enough profits to justify the PPC campaign costs? Do you need to tweak your keywords or your phrases? Do you need to bid a higher amount because the campaign is really increasing your sales but a competitor has bid a higher amount than you? Answer all these questions factually and start fine-tuning you campaign; you will definitely see improvements in the relevant areas.Key elements that help the ROIGetting everything right at first go may not be possible, but it sure is worth a try. So before and during your PPC campaign pay close attention to:KeywordsGet them right, and if you cannot, hire a professional to write them. Do not go for costly keywords, a 3rd or a 4th ranking will do just fine. Second-tier keywords that barely cost anything can also do the job. Check what keywords your competitor is using and try to sound better than him.
AdYour ad should be a cracker - different and distinct from the hoi polloi. If your message goes "Buy our product because it is the best" or words to that effect then it is no good. Your ad copy should enthuse a visitor to click and act.Landing PageWhen a visitor clicks on your ad, he is directed to your site.
The page that opens is the landing page - this has to be flawless and uncluttered and its content should match the content in your ad.
In the end, it is clear that most PPC campaigns do not make money because they are not properly planned and monitored. However, if you do your campaign correctly, you will be rolling in money.
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