PPC for Dummies?

Hi All,

So I've been doing link building for a few clients for the past couple of years, building my knowledge on SEO along the way. I met an old friend over the weekend who told me about the wonders of Pay Per Click! I've never had anything to do with this or ad sense money making and my old acquaintance was vague on the subject.

Could somebody fill me in on how this works, or how it works successfully. My limited research leads me to believe that it can leave you out of pocket if done wrong. Any and all help is welcomed on this subject.

Thanks,

 

Juste GOOGLE it,

 

I was hoping to tap into somebodies experience to give me a more laymen's terms explanation. For some areas I don't find that Google provides the best info, any other offers??

 

Hi

PPC means you pay a small fee each time someone clicks on your ad.

There are a number of services that offer PPC. Google is the biggie with AdSense, Microsoft also offers a similar service for Yahoo/Bing and facebook also offers PPC.

Generally you set up a campaign by designing the ad, entering keywords you want to target for the ad, your daily budget and the amount you are willing to pay for a click.

You also have the option of targeting the search network, content network or both for AdSense and Yahoo. The option for the search network means your ad will only show on search pages. The content network means your ad will also appear on web pages displaying AdSense ads.

You want to create a number of campaigns for different demographics such as male/female, age, location, etc. This way you can see which segments of your market are most profitable.

Tweak, fix or kill campaigns that are not working and pump the campaigns that are winning.

Keep monitoring and tweaking to maximize your ROI.


The way bidding works is each advertiser sets a Daily Ad Budget and an amount they will Pay Per Click for their keywords.

More popular/profitable keywords are more expensive to target because there is competition among advertisers wanting good placement on that keyword for their ads.

The ad network will generally display ads that are more profitable for them. This is determined by a combination of the Bid Price and Click Thru Rate (CTR).

By improving your CTR, you can dramatically decrease your advertising costs. This is why it is important to test and tweak your campaigns.

For example:

Advertiser #1 bids $1.00 per click and has a CTR of 1% so for 1,000 ads he gets 10 clicks and the ad network makes $10

Advertiser #2 bides 40 cents per click and has a CTR of 4% so for 1,000 ads he gets 40 clicks and the ad network makes $16

Advertiser #2 is paying less than half of #1 but making the ad network 60% more money.

This is the campaign the ad network will favor so Advertiser #2 is getting better than half the ad spend and top placement over someone bidding more than double what he is for clicks.

That is how important CTR is in CPC advertising.

So keep watching and tweaking your ads to improve the CTR and you can dramatically reduce your ad spend.

Some tips:

Set your daily budget high so they know you are serious. (watch the clicks to start!)
Start with a higher CPC bid for new campaigns.
Tweak the campaigns to improve CTR.
Reduce bids as CTR increase.
Spy on your competitors and steal their good ideas.

You will lose money when you are starting with CPC so make sure you have a budget that can sustain some spending while you learn and tweak your campaigns.

Mahlon

 

More on monitoring your Spending and ROI

As you monitor your campaign you want to keep track of how much you are spending and how much you are making.

If you pay .50 per click that is $500 for 1,000 clicks.

The 1,000 people who click on your ad will land on a page that requires action buy/opt-in. How well that landing page/offer converts determines your ROI.

If your offer pays you $20 and you are converting 2% at the landing page then 20 people (of 1,000 clicks) bought and you made $400.

So that is $100 loss every 1,000 clicks.

You can fix this by

A) Increasing your Ad CTR and lowering you PPC cost - lower it .10 /click and you break even
B) Increase your landing page conversion rate and increase your sales - increase conversion 1% and you make money
C) Increase the amount you make per sale by adjusting the price/finding a better offer

Say you tweak the above example so ultimately you are paying .35 per click and converting 4% at the landing page but you have no control over the price. So:

1,000 clicks = 40 sales

Cost = $350, Sales = $800, Profit = $450

So for each dollar you spend, you make $2.29 sales = $1.29 profit.

Now determine how much you want to make.

If you spend $1,000 you will make $2,290 ($1,290 profit)
If you spend $100,000 you will make $229,000 ( $129,000 profit)

Mahlon

 

Many thanks Mahlon, exactly what I was looking for Great stuff!

 

Face book in my experience is NOT the way to go, i had a bingo related site advertised on there, and yes i had a few clicks but it cost me a lot of money for not a lot of income, i just about broke even.

Of coarse this was just 1 example, i guess others have done well, i supose its down to niche

Cheers
RR

 

great info Mahlon...nice share..

 

I like using Facebook PPC to attract fans to a FB Fan Page. Which can also increase traffic to a website if you put the link in the Info tab. You have a lot of control over the Ad campaign – Daily limits, Ad pause/start, Campaign start/end dates, etc. For your first campaign, I would purchase a FB Ad coupon. I got a $50 coupon for $18. You could probably find it cheaper if you look hard enough. That way you can get an idea about your Click-through-Rate (CTR), Conversions, etc. for very little cost

 

With PPC, you're not paying for a promise, and you're not paying to load an ad onto a page. You're paying for an actual result, a click. With PPC, you don't pay if nobody sees your ad, and you don't even pay if someone does see it but doesn't click. You pay only when someone clicks your ad.