Ever Wondered How You Could Take Your Business to the Next Level?

Want to Understand the Impact of Internet Advertising on Your Business?

Need  bare bones explanation of why you should definitely use the Internet as a business tool?

Web Full Circle presents an article geared specifically at answering your questions about Internet advertising specifically the advertising solution that is Pay Per Click.  After reading this article, we believe you will be ready to take the first step to implementing such a campaign for your business. 

How Effective is Pay Per Click:

First some facts you need to know before contemplating the role of pay per click in your businesses future.

You have probably asked yourself before.  How much benefit can I gain from using the Internet as a advertising method. 

Before that can be answered, it is important to consider the extent to which the Internet has become interwoven into our culture and our daily lives.  Perhaps, the best way of examining that infiltration is by looking at it through research conducted by those interested in finding correlations and patterns relative to the Internet and the changes that it is galvanizing through the ease with which it provides a myriad of information.

"For help with a variety of common problems, more people turn to the internet than consult experts or family members to provide information and resource" (Estawood, Witt & Rainie, 2008). 

"Nearly two in five adult internet users in the U.S. (39%) have gone online to look for information about a place to live, up from 34% in 2004 and 27% in 2000" (Fallows, 2006,§1).

In a study from February 15 - April 6, 2006, "fully 73% of respondents (about 147 million adults) are internet users, up from 66% (about 133 million adults)" from a "January 2005 survey" conducted by the Pew Internet & American Life Project (Madden, 2006).

Pay Per Click Defined

As defined by the website Marketing Terms.com, Pay Per Click is an "online advertising payment model in which payment is based solely on qualifying click-throughs" (§1).

Basically, this means that your site is put either in the yellow box before the "real search results" or to the right of the yellow box.  Both areas as noted to be Sponsored Links.  In reality, each is an example of Pay Per Click advertising. 

What Does It Cost You?

Pay Per Click is basically at a negotiated rate.   As Marketing.com notes in their entry for Pay Per Click, it is "sometimes seen by some as a middle ground between paying per impression and paying per action" (§3).

To translate that into lay terms, basically, you have no guarantees in Pay Per Click.  Clicks are not qualified:  they just happen.  Whether or not the click results in an actual sale of good or purchase of service.  

Google's Pay Per Click:  How Does It Work?

Yes, of course, each company has their own particular spin in this win-win situation from a profit margin stance.  Think of it as each companies unique spin to a concise concept.

Google's Pay Per Click is called Google Adwords.  As noted on the Google Adwords site, your company is listed as a "partner site"(s) (§2).  Through partnering with a search engine like Google they provide you the exposure that can only be gained by working with a search engine that feeds into several other search engines thereby expanding the overall potential effectiveness of your Pay Per Click Campaign.

Basically, you are paying for the space next to the related search results. 

On Which Pages is Your Pay Per Click Ad Displayed?

First, you choose Keywords.  These Keywords are used to determine next to which related search results your Pay Per Click ad will be placed next (Google). 

Second, set your budget.  How much are you willing to spend to basically buy the virtual real estate that is next to the keywords you select?

Third, obtain keyword analysis from Google to determine which are the most effective keywords.  Basically, this just assures that you get your money's worth.

The Benefits of Pay Per Click?

Google states it best when it says:  "You're charged only if someone clicks on your ad, not when you ad is displayed" (§5).  Of course, this could be considered both a pro and a con.  From a beneficial standpoint, more people will see your ad thereby generating your exposure, which does have some value from a branding standpoint as well as from a repetition standpoint in that after seeing your ad under those keywords several times you may get those that click on it who are genuinely interested in the keyword.  From a detrimental standpoint, many people may click because after all they have nothing to lose, but you as an advertiser will have something to lose: money. 

Terms Associated With Pay Per Click

From a statistical analysis vantage, there are three "Basic Statistics" that should be monitored relative to your Pay Per Click Campaign (The Pay Per Click Reporting Guide, 2008, §3).

"Click Through Rate"          "Ad Texts Click Through Rate"                         "Cost Per Acquisition/Cost Per Sale"

Click Through Rate:   As you can imagine by the term, click through rate tallies the number of clicks divided by "the number of impressions" (The Pay Per Click Reporting Guide, §4).  This percentage is important to monitor because it "contributes to Google's quality score and gives you an indication of how well your ads and negative keywords are working" (The Pay Per Click Reporting Guide, §4). 

Ad Texts Click Through Rates- In order to see how one type of call to action (or approach) tests versus another.  You should have more than one ad running.  By examining the click through rate and the "corresponding conversion rate" (i.e. how many sales you make from those clicks), you will be able to see which ad's approach or call to action was most effective (The Pay Per Click Reporting Guide, §5).  This basically ties to the age old mantra "don't put all your eggs in one basket". 

Cost Per Acquisition/Cost Per Sale: (Formula:  Cost Per Action divided by Total Number of Sales).This is how much you spent divided by how much you sold or (converted from clicks to sales) (The Pay Per Click Reporting Guide, §5).  You have to keep a good eye on this as it ultimately tells you whether or not your campaign is effective.

Example:  You spent $500 on your Pay Per Click campaign.  You had 36 sales.  You have 1400 visitors to your website. You have a 2% Conversion Rate. 

1400 x 2%= 28

$500/28 sales= $17.86 per sale

Cost Per Action which "monitors how much it costs for you to generate an action (marketing objective)" (Gold, 2008). 

Amount You Spent on Action divided by number completing your" marketing objective"= Cost per Action.

For example, if you spent $200 on your pay-per-click campaign which generated 1,000 visitors of which 5 completed your "marketing objective",  your cost per action is:

$200/5=$40.00 per action.

Conversion Rate:  (Formula:  Objectives a/k/a Actions divided by Total Number of Visitors= Y x 100 to get percentage) (Gold, 2008). 

Example:  If you have 2,500 visitors, but only 15 actually complete your objective or action.  Then your conversion rate is 0.6%.

Keep in mind these are just some of the types of statistics that you can monitor in order to keep a tight reign on your Pay Per Click Campaign.  Ultimately, the question is whether you have the time to do this and whether monitoring these in-depth results would be the best use of your specific skill set.

Web Full Circle's Pay Per Click Campaign Components:

• Extensive Pre-Launch Research:  We work to understand your industry, your brand and what makes your company unique.  This allows us to achieve better Returns on Investment (ROI) for you.
• Budgeting:  We use our research to provide you with sufficient information to make an informed decision as to how much you should budget for each Pay Per Click campaign.
• Testing, Management and Evolution- We design a customized testing plan which includes keywords, creative geo-targeting, day parting, landing page designs and deep linking, as needed.
• In-depth Analysis and Optimization - We will consistently monitor your campaign, analyze results and optimize campaigns to ensure click ratio conversions increase
• Landing Pages - Deep linking campaigns are an integral part of any of our Pay Per Click campaigns and if possible we  also carry out landing page testing to increase overall conversion rates
• Integration - By incorporating your staple advertising messages into your Pay Per Click campaign as well as your off-line schedules, you are ensured brand consistency and increased response rates

The Diagnosis

Pay Per Click is only as effective as your knowledge is of which keywords to use.  Even if you are given a million keywords, it will not help you, unless you, yourself, can distinguish how those keywords fit into the bigger puzzle that is searching online.

From a cost benefit analysis perspective, your time would be better spent in other endeavors rather than trying to school yourself on how the intricacies of Pay Per Click work, which is why we recommend hiring an experienced web marketing firm.  An experienced web marketing firm can prepare you a seamless campaign customized to your specific industry and short and long-term goals. Moreover, in these times when time is of the essence, a web marketing firm provides "more bang for your buck":  a solutions oriented approach to Pay Per Click in an efficient manner based on extensive past experiences using this advertising key. 

As one such firm, Web Full Circle is prepared to handle your Pay Per Click campaign from creation to implementation.  Web Full Circle can provide you with the keys to Pay Per Click that will ultimately make it a key to your success.  Don't wait.  Contact us today so that you can take advantage of this innovative tool. 

References

Fallows, D. Pew Internet Data Project Memo. (2006, December 16). Retrieved on February 21, 2008 from, http://www.pewinternet.org/pdfs/PIP_Place_to_Live_2006.pdf.

Gold, K. 3 Strategies To Profit When Pay Per Click Prices Increase. (2008). Retrieved on February 21, 2008 from http://webhostinggeeks.com/articles/ppc-advertising/21388.php. 

Google.  Google Adwords. Retrieved on February 21, 2008 from, https://adwords.google.com/select/Login.

Just Searching. The Pay Per Click Reporting Guide. (2008). Retrieved on February 21, 2008 from,     http://www.justsearching.co.uk/JustBlog/the-pay-per-click-reporting-guide.html. 

Estabrook, L. Witt, E.  & Ranie, L. Information Searches That Solve Problems. (2008). Retrieved on February 21, 2008 from, http://www.pewinternet.org/pdfs/Pew_UI_LibrariesReport.pdf.

Madden, M. (2006, April). Internet Penetration and Impact. Retrieved on February 21, 2008 from, http://www.pewinternet.org/PPF/r/182/report_display.asp.

Marketing Terms. Glossary: Pay Per Click. Retrieved on February 21, 2008 from,   http://www.marketingterms.com/dictionary/pay_per_click/.