PAY PER CLICK MARKETING

Welcome to the wonderful world of pay-per-click, a marketing medium that, by itself, is able to make you a ton of money. If you already own an internet business, then you have discovered by now, just how important it is to have a powerful online presence. In particular, making yourself easily accessible to potential buyers, who are looking for what you are offering. Of course, your ideal would be to have your business obtain and hold, the number one ranking in the natural listings of the search engines. But as you know, that is not always possible - especially since the methods that search engines use to rank websites, are changing constantly.  A faster, more effective approach - and one adopted by many internet businesses today - is Pay-Per-Click advertising. Properly executed, it can help your business prosper, by placing your compelling offer in front of the correctly-targeted, hungry crowd! There are many uses for pay-per-click. Always remember that pay-per-click is a vehicle to drive targeted traffic to your desired web page, and can be used in all sorts of creative ways.

You can use pay-per-click to drive traffic to sales pages for direct sales. Drive traffic to opt-in pages to build your opt-in lists.  Drive traffic to lead generators offering free reports to build up your marketing funnel. Drive traffic to survey forms for market research. Again, it’s all up to your imagination, and the most desired action you require from your visitor. There are many popular pay-per-click search engines, that you can use on the internet. However, for ease of explanation, Google, the undisputed king of pay-per-click advertising, will be used in the examples and screenshots that follow.  Please do take note that all functions described in this page are applicable to most pay-per-click search engines, and not just Google alone.

With that out of the way, let’s move on, and be prepared for some of the most profitable and life-changing lessons you will learn in your marketing life!

What is Pay-Per-Click?

As the name implies, it is an advertising medium, in which an advertiser pays to have his advertisements viewed by prospective customers. An important concept to grasp is that like anything else, there are two ends to the pay-per-click stick:

Advertising and Ad publishing.

The first is described in the definition above. Ad publishing, on the other hand, can be defined as the following:

“The display of advertisements on a website, which gives visitors a chance to visit the URL of the advertiser’s choice.”

Pay-per-click is a concept that has been around for a long time. The company that first started it all was Overture (now a part of Yahoo! Search Marketing), in 1998.  Since then, pay-per-click has evolved greatly as marketers and consumers alike grew more and more savvy as this medium grew more and more popular.  Pay-per-click is also the vehicle of choice that newbies tend to use for driving traffic to their websites. Unfortunately, they often jump onto the bandwagon without learning the basics of marketing and the technicalities of pay-per-click, thus often incurring ridiculously high costs and quitting internet marketing as a result. So widespread is this phenomenon, that the Advertising end, (known as Google “Adwords”), has often been labeled “The Newbie Graveyard.”

However, if proper due diligence is carried out by you, payper-click has the potential to drive hordes of targeted traffic, to wherever you want it to go!

Advertising With Pay-Per-Click

Pay-per-click advertising is one of the greatest inventions of online marketing. Gone are the offline, direct-mail-order days - where you could be waiting days, weeks, or even months, to test out each of your marketing campaigns.  With pay-per-click, advertisements, sales letters and offers can be tested with a global audience in as little as 5 minutes’ time.

Statistics in various areas are also easily obtained, which allows you to easily tweak your ad campaigns to maximize profits and cut out the losers fast. A/B split-testing allows you to split-test headlines, images, and many other elements of your sales page. This saves you a lot of time and guesswork, resulting in maximization of profits.

Let’s walk through an example of a pay-per-click campaign.  Let’s say an author of a dog-training ebook wants to promote his ebook with pay-per-click advertising.  Let’s call him Tom. He signs up with one of the pay-per-click search engines, which happens to be Google, and goes on to create an ad that leads to the sales letter of his ebook, which is hosted on his site. In the process of setting up his campaign, Tom finds out the average cost per click and other relevant information, and decides that he can afford to spend $0.50 per click to break even. Thus, he decides to set $0.50 as his “maximum cost per click”.

This is what his ad looks like:

(The above advertisement is entirely fictional.)

Within minutes of creating the advertisement, it goes live.  Mary is the new proud owner of a poodle and wants to learn how to train it. She decides to seek help from the internet.  She goes to Google.com, types in “how to train my dog”, and is presented with the Search Engine Results Page, or SERP:

The red ink highlights the paid ads. Mary spots Tom’s ad and clicks on it. In this process, Tom pays about $0.50 for that click, and Mary is directed to Tom’s site.  Mary loves what she sees, and purchases his ebook, resulting in a successful sale.

And that, is a very simplified account of how a pay-per-click campaign works.

Ad Publishing

This other end of the pay-per-click advertising model allows content publishers to earn money from having ads displayed on their sites.

For example, Jack has a site that informs people about where to find the cheapest hotels in his area. He sets aside a certain amount of space to have Google ads displayed.

Here is what one of his ad blocks looks like:

A tourist stumbles upon his site and clicks on one of the links to find out more about “cheap hotels”. The advertiser behind the ad is then charged a certain amount of money for that click, out of which a certain percentage is allocated to Jack.  This, in essence, is ad publishing.

What Jack has done is to insert a piece of javascript code onto his site. What happened after that is that Google has “decided” what the theme of his site is about, and has thus aptly displayed the relevant {context sensitive} ads.

(Note: This also points out the importance of relevant and useful content. That is, it is important to have your site target a specific niche as narrowly as possible, and to make the content you place on your site, coherent to that niche.  In this way, the ads displayed will directly cater to the niche that you are targeting. For example, if your site is a dog training site, you would not want to talk too much about, for example, cats. This would only serve to “confuse” the search engines into serving up the wrong ads on your site.)

Pay-Per-Click Terminology

Every specialty has it’s own puzzling jargon. The following list will have you speaking like a true pay-per-click master:

CTR: “Click-through rate”. The percentage of visitors to the website displaying your ad, who click on your ad and go “through” to the ad’s target web-page.  CPM: “Cost Per Mille”. The cost per thousand “impressions” of your ad, on the displaying page.  eCPM: “Effective Cost Per Mille”. The CPM, adjusted to take into account other, relevant factors.

CPT: “Cost Per Thousand”. The same as CPM.  CPI: “Cost Per Impression”. The cost of a single impression of your ad.

PPC: “Pay Per Click”. What we’re talking about here! The entire system of displaying your ads on the internet, by paying a set cost for each “click” on your ad.  PPI: “Pay per interaction”. A variation of PPC, where you pay a set cost for each “interaction” resulting from your ad.  (There are a variety of different interactions used.) CPA: “Cost Per Action”. A calculation of what it is costing you, to get one visitor to take a particular action you desire.  CPC: “Cost Per Click”. The specific subset of CPA, where the action you want the visitor to take, is to click your ad.  eCPA: “Effective Cost Per Action”. The CPA, adjusted to take into account other, relevant factors.  SERP: “Search Engine Results Page”. When you enter a “keyword” (or several keywords) in the search box of a search engine, that engine returns a page-by-page listing of web-pages, that match your keyword(s).  XML: A programming language that supplies a set of standards for programmers to follow. But for our purposes, XML provides us with the ability to paste a simple piece of code into our web page and thus, easily obtain an automated content “feed”.

ROI: “Return On Investment”. The percentage of your original investment, that you get in profits.  For instance, in our dog-training example, Tom “invested” $0.50 per click. Let’s say that Mary bought his ebook which costs $50. And let’s also say that Mary was the 50^th person who clicked on Tom’s ad, the other 49 of whom did not buy Tom’s ebook. Then Tom’s cost was $0.50 per click x 50 clickers = $25.00. Which means Tom’s profit was Mary’s $50.00 purchase - Tom’s $25.00 cost = $25.00. Thus, Tom made $25.00 profit on his total “investment” of $25.00.  Therefore, his ROI is 100%.

The Top 10 Pay-Per-Click Search Engines

Given the large number of pay-per-click search engines on the internet, how do you know which one to choose or start with?

Different search engines have different pros and cons, and the only way to know which one you like best is to test, test, and test. It’s always best to start out with Google, although it’s the most competitive out there. The competitiveness allows you to pick up the basics very fast, provided you have the patience to learn the theories before you start spending any money.

The best place to learn about pay-per-click basics is from the horse’s mouth, at http://www.google.com/adwords/learningcenter  With comprehensive and well-explained multimedia presentations and quizzes to test your knowledge at the end of each section, it’s the beginner’s fast-track to Adwords success.

Signing up for Adwords is even easier. Start out by going to:

http://www.google.com/intl/en/ads/

(Note: You can also sign up for Adsense at this location.) Once you enter the Google Adwords area, you will be given a choice between the “Starter Edition” or the “Standard Edition”. Although the Starter is tailored to beginners, I would suggest moving straight to the Standard - in order to take full advantage of the Advanced reports and tools the Standard Edition offers.

Once you’ve selected the Standard Edition, you will be taken through Google’s “sign-up wizard”, which will help you create your own ad campaign in four easy steps. You will target customers, write your ad, choose keywords, and set your spending limit.

Once you’ve mastered the basics of Adwords, you will then have to decide whether to try other search engines. Of course, you can choose to stay 100% with Adwords, but some of the most successful marketers choose to expand to other search engines, because the competition using these engines are few, and less knowledgeable in general.  Armed with the experience gained from using the most competitive pay-per-click search engine in the world, you will be able to get out there and dominate the rest.  For a start, here are the top 10 pay-per-click search engines I recommend. Also stated are some facts and figures about it, which will hopefully help you make a better decision.

Google AdWords

A cost of $5 is required to set up an account. However, this $5 gets credited into your account as well so it does not go to waste. Bids start at $0.01, but as you know by now, competition is very fierce on this search engine and you should be realistic and realize that you very often have to pay far more than $0.01 for your clicks.

Yahoo! Search Marketing

Yahoo!’s flagship product provides sponsored listings in search results on the Web’s top portals and search engines, reaching over 80% of active Internet users. It pioneered the pay-per-click search engine model in 1997, after seeing a need for a more focused search engine. After operating as GoTo.com for about 8 years, the name was changed to Overture and in 2005, it was renamed Yahoo! Search Marketing.

ABC Search

ABC Search is currently having a promotion and matches any initial deposit up to $100 delivering qualified Pay-Per-Click traffic. 2.5 billion monthly searches are conducted on ABC Search and is certainly worth a look at.

SearchFeed

Advertising with Searchfeed.com provides a level of personal service every online advertiser deserves, extending an ad campaign to its fullest potential. Searchfeed.com offers exposure to millions of unique visitors each day on a cost per-click basis, determined by the advertiser. By only establishing partnerships with Web properties that operate in accordance with industry acceptable standards, keyword buys deliver the strongest Return On Investment (ROI).

7Search

The 7Search advertising program generates quality website traffic on behalf of thousands of advertisers through its payper-click (bid for placement) search engine. Currently providing sponsored results for over 1.5 Billion searches per month, 7Search specializes in serving website owners of “low profit margin” categories of business that cannot afford to pay over ten cents per visitor.

MIVA

MIVA is a network of partner sites powering over 2 billion searches monthly. The network includes sites such as CNet.com, InfoSpace and WorldNews. MIVA provides a full suite of management tools to help you maximize your earnings. Get $25 in your account when you sign up with Miva today!

Enhance Interactive

You can open an Enhance account for $50 and get a $25 bonus to new advertisers if you’re a new Enhance user. It is a payper-click network that allows you to efficiently and cost effectively extend the reach of your search campaigns. The Enhance network receives over 2 billion targeted searches monthly.

Findology

Findology is dedicated to provide you with highly targeted, quality traffic. With their customized technology and performance based advertising, they deliver the traffic that your company is looking for. By bidding on relevant keywords and listing your site, you will reach their entire network of partners. The program is built for any budget and you will only pay when potential customers click on your listings.

Microsoft adCenter

Signing up with Microsoft adCenter is quick and easy with a $5 signup fee. If you’re spending $30 a day in search advertising you can take advantage of QuickLaunch and have one of the Microsoft Media Specialists help you plan, create, execute, and analyze your first adCenter campaign.

GoClick.Com

GoClick.Com has special systems in place to make sure that you are only charged for unique clicks and not overcharged for your online advertising. You can request any remaining funds be returned to you at any time. There are no membership fees to use this service at all.

Frequently Asked Questions

Question: What if some prankster out there keeps clicking on my links over and over again for fun? 

Answer: This trend is commonly referred to as click fraud.  This is one of the main reasons why you have to proactively monitor your clicks and conversion rates. If you suspect unnatural clicks, you should pause your campaigns immediately and send evidence of suspicion to the administration staff for further investigation. They are concerned about your welfare, so they will take steps to make sure you are protected from click fraud. 

Question: How am I able to compete with advertisers with high budgets? They will surely outbid me! 

Answer: Go for narrow niches. Big companies with big budgets often try to go for big markets. It makes more sense for them. For small companies and campaigns, it’s more sensible to go “guerilla-style” and target tiny markets, and strive to dominate them. For instance, the market for “dating” in general is probably well-saturated with big companies with big budgets. What you should do, thus, is to target a sub-niche in that category, for instance, “short men with big noses, looking for short women with small noses.” I’m sure you’ll be able to easily dominate that market, if it does exist.

Question: People are telling me I shouldn’t have too many people clicking on my ads because not all of them will buy.  Is that true?

Answer: The latter is true, the former is not. Of course not everyone who clicks on your link will buy. Asking a question like that is kind of like opening a shop and hoping nobody will come, because you know you have inferior products.  This is why it’s extremely important to know your conversion rates. If you’re able to improve your offer to suit your visitors more, by all means, do that. Once that’s done, find out your conversion rates. Let’s say out of 100 people who come to your site, 2 people buy. We naturally conclude that if 200 people come, 4 will buy. If 300 people come, 6 will buy, and so on. And let’s say 100 visitors costs you $10, which result in 2 sales, earning you $47 each, for a total of $94. Each 100 visitors thus nets you $84, 200 visitors nets you double of that, so on and so forth. Now that you see how this works out, you should come to the conclusion that once you’ve established your conversion rates and cost of acquisition per customer, you want as many targeted visitors to your site as possible.