Pay-per-click (PPC) advertising is one of the fastest methods of driving sales for your business. At Web Profits we specialize in PPC advertising with conversion tracking so that we can achieve the maximum return on investment (ROI) from your advertising budget.
How Does It Work?
PPC advertising is the process of appearing within the "sponsored links" section of Google (the major search engine in many countries). You can setup a text-based ad to appear anytime a user types in a specific keyword phrase. The best part is that you only pay when somebody actually clicks on your ad, which effectively means that you only pay for results.
What Is The Most Important Number To Measure?
With PPC advertising it is easy to get caught up measuring the number of clicks you are receiving or the number of times your ad appears in the searches (referred to as "impressions"). Focusing on these numbers, however, is a mistake.
The only number that is important within PPC advertising is the Cost-Per-Action (CPA), also referred to as the cost per conversion, which is displayed as a dollar amount (eg $24). The key to success with your PPC campaign is to ensure that your CPA is lower than the amount of profit you earn. For example, if your CPA is $24 you must earn at least $24 in net profit to break even.
To be able to measure your CPA you first need to setup conversion tracking.
What Is Conversion Tracking?
Conversion tracking is the process of measuring the number of meaningful actions your visitors take on your site – usually either a sale or a sales lead.
To be able to measure conversions you need a "thank you" page and a method of capturing visitor information on your website (ie a website form or shopping cart). Within Google or Yahoo you can then get "conversion tracking code" and place it within the HTML code of your "thank you" page.
Why Is Conversion Tracking Important?
In PPC advertising the 80/20 rule applies, which simply means that less than 20% of all of your keyword phrases will produce more than 80% of your profits and sales. In our experience it’s more like 90/10.
With conversion tracking, you are able to see which keywords, ads and campaigns are producing the best CPA. With this information you can then discontinue keywords and ads which are higher than your target CPA levels (ie not making you money) and increase the advertising spend on those keywords and ads that lower than your target CPA levels.
Without conversion tracking you’d receive just a fraction of the results of an optimised campaign as you are wasting 80% of your budget on keywords and ads that are not or underperforming.
What Is Your Website’s Conversion Rate?
PPC advertising can be a very expensive exercise if your website has a low conversion rate because your conversion rate is intricately tied in to your CPA.
For example, if you are paying $1 per click, you would spend $100 for 100 visitors. If your conversion rate is 5%, then for every 100 visitors you would receive 5 sales. This means that your CPA is $20 (ie. $100 ÷ 5 sales). Take the same example, but assume your conversion rate is just 1%. This means that for each 100 visitors you would make 1 sale and your CPA would be $100.
PPC is managed off the website, within the Google Adwords and Yahoo Search Marketing interfaces, but the website plays a critical role in your ability to compete effectively online. Think about it, if your competition has a website that converts at 5% and yours only converts at 1%, they can spend 20% of what you are spending and achieve the same result! In reality, they will be spending more than you and achieving a much higher level of sales. Add into these picture 4 or 5 competitors who know what they are doing and you won’t be able to complete in that market.
If your website is not setup to convert, please review our web design solutions.
Expert PPC Management Services
Web Profits has successfully managed client budgets as low and as high per day. Our PPC management service is focused entirely on achieving the maximum number of leads or sales at the lowest CPA within your budget.
We are very aggressive in saving your budget. That is, if we see that the campaign is not working, we stop it right away and see what we need to do to fix it. In our opinion, we would rather you not spend your money with us if we can’t make your campaign profitable.