Effective Pay Per Click Advertising

Ok, you've got your site in order, you've done all your on page optimization, and starting your link building campaign. now your ready to start paying per click to bring in some targetted traffic. There are a lot of pay per click programs out there, but I always recommended Adsense for beginnings.

Now I know many of you have heard horror stories about people that lost small fortunes using pay per click, and I'm sure you're leary of using it yourself. So, I'm going to try to help guide you through the process, to minimize your investment and maximize your return.

First of all, when setting up an Adsense campaign for the first time, I recommend turning OFF affiliate in content and search. This means that your ads will NOT run sites other than on Google. That probably means less overall traffic, but I find that the quality of traffic is usually not as good when coming from random blogs.

Which brings me to my next point.

For organic traffic (from search engine searches), we want to bring in as many visitors as humanly possible. We want as many people as possible, whether they are specifically shopping or not. This is because this traffic is FREE, so we want as many as we can get.

But when we have to pay for each visitor, such as in Pay Per click advertising, we DON'T want all of them. We only want very TARGETED traffic. We're trying to narrow it down to ONLY people that are shopping, or looking to buy something. That's because we have to pay for each and every single visitor, so if we narrow it down to people that are specifically looking to buy, we'll increase the number of conversions we get per paid visitor. Believe me, we don't want to have to pay for un-targeted traffic, becuase it would cost us an absolute fortune, and we wouldn't get many sales from it.

Picture this. Imagine that we used a very broad term, say 'custom t-shirts', and advertise on it, paying $0.20 per click. Let's say that we're in the side column on the first page of that results with this ad. And lets say for the month, that it's displayed 10,000 times. 1% is about average for a click through ratio, so lets figure that it was clicked on 1000 times, costing us $200.

But from those 1000 clicks, how many people were actually shopping? Probably only about 5% at most. The rest of those people we looking for freebies, or looking to see what the latest toys out there are, etc. etc. Remember that search engines are predominantly used for information gathering, NOT shopping. so, lets say that out of the 1-5% that were actually shopping, let's say 10-50 of them bought something. In my experience, that's a much, much better ratio that will actually happen in real life, but it will illustrate my point.

So, in the end, we paid $200 to get 10-50 sales. I'm guessing that's a pretty hefty dent in the profit margin, no?

Lets start with one ad group for each main category, plus one ad group for the homepage. I usually end up with about 50 different variations of my keyword in each ad group. For the whole ad group, set a maximum CPC of $0.20. We will manually increase that for key phrases that perform better, but that's usually a good starting spot. The keywords we enter for this ad group will all be directly related to the category and will all have the word 'buy' or 'purchase' in front of it.

For example, if my category were 'custom t-shirts', my key phrases I'm advertising on might be...
buy custom t-shirts
purchase custom t-shirts
buy custom tshirts
purchase custom tshirts
buy tshirts custom
purchase tshirts custom
buy t-shirts custom
purchase t-shirts custom

By advertising on only very narrow terms, like 'buy custom t-shirts', our ad will be displayed far less frequently than on a broad term. But ask yourself, of the ones that DO search for it, how many are actually prepared to purchase something? Probably a very high percentage, like 90% or so. So, instead of the 10,000 impressions, we get only 1,000. And instead of the 1000 clicks, we only have to pay for 100 of them, which comes to about $20. But since the keyprhase is more targeted, a higher percentage of them are actually shopping for stuff, so instead of 5% conversion, we'll probably get more like 20% or 30% conversion.

So, in the end, we pay $20 to get 20-30 sales, as opposed to paying $200 for10- 50.

It's a much more efficient to only pay for highly targetted traffic.