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Is Pay Per Click Worth It?

Pay per click (PPC) advertising from Google Adwords or Bing Adcenter, for example, can be a very cost-effective marketing technique if used properly.   As competition for industry keyword or phrase increases, it can become an increasingly expensive technique, however.  There are ways to optimize your PPC campaigns to maximize ROI.

More and more, smart marketers are also using PPC as a short-term platform to better target their campaigns using different marketing techniques.  They use PPC to ensure their other techniques can enjoy a running start.

PPC Drives Traffic

Setting up an Adwords or Adcenter Campaign is fast and inexpensive.   You can often find discount coupons of $50 and $75 on the Internet to get you started.   All you have to do is:

  • open an account,
  • create a short text ad
  • enter the keywords that you want Google or Bing to use to trigger the display of your ad
  • establish the highest price you’re willing to pay for each user click
  • wait a few hours for your ad to get approved
  • It’s that simple!

The higher your ad is displayed on the search page results, the more traffic to your site you will get.

However, all of your competitors are also trying to get to the top spot.  The advertiser that bids the highest for a particular keyword will earn the top spot.  Every user search triggers a new automated auction between advertisers.  So depending on the settings chosen by each advertiser, on some occasions you could be displayed in the first spot, and others in the fourth spot, but on average, your overall display position might be in the third spot.

PPC and PPV – Even on Social Networks!

Pay per click (PPC) and pay per view (PPV) advertising is not only available through search engines, but is becoming more available on popular social networks.  While search engines tend to leverage keyword search, PPC on social networks can deliver your text or banner ad to targeted users based upon to the information in their user’s profiles.

  • LinkedIn offers PPC and PPV with a cost per click starting at two dollars per click, reflecting the value of a social network focused on business professionals.  You can target selected occupations, business types and more.
  • With Facebook you can target your ads based on gender, age, location, interest or occupation.  At less than $1 per click, it is generally lower than search engines.
  • StumbleUpon offers clicks generally below $.10 each.  However, stumblers tend to be surfers looking to be entertained, so most will not linger for very long on your landing page.  As a result, your effective click rate could exceed $2 per click once you figure out your conversion rate to sales lead.
  • Reddit and other social networks are also starting to offer advertisements to their users.  Like StumbleUpon, the cost per click can be low, but more importantly, your ad has a potential to go viral.

Does PPC Generate Sales Leads?

When a user clicks on your ad, what is your goal: to convince them to purchase your product or to capture their contact information so that you can follow-up with them at a later time via email?

When a user clicks on your ad, where do you send them: your website homepage or a specialized landing page?

A lot depends on the keyword or phrase they entered.  If they are searching for information like “Best smartphone” or “smartphone reviews”, they are probably looking to purchase the product in the very near future.  So in this case, it may make sense to have a specialized landing page that is designed to convince them to purchase your product.

On the other hand, if they are searching for information like “setting up email for my smartphone” they are just looking to get informed.  In this case, you might want to offer them a free ebook on “setting up your smartphone” in return for their contact information, which you will use later to try and convince them to buy your product.

Optimizing PPC For Maximum ROI

The cost per click can be from fifteen cents to five dollars, or more, depending on the product and industry.  To get the lowest cost per click, your choice of keywords is an important consideration; keyword research can really improve the ROI of your marketing campaigns.   A keyword phrase such as “auto insurance” will be highly competitive and therefore increasingly very expensive.  A phrase such as “auto insurance for Ford Explorer” (which is called a long tail keyword) and “auto insurance in Toledo” (which is called a geo-targeted keyword) could be a better choice. Less people are searching for these phrases, so the volume of traffic per keyword is less.  However, the advertising cost of these phrases is often much less than the mainstream keywords.  In addition, a long tail or a geo-targeted keyword will often convert better than a mainstream keyword because it is can be more targeted toward your business or product.  Traffic from a hundred long tail or geo-targeted keywords can have a much better ROI than traffic from a highly competitive and expensive keyword.

Best practice is to optimize the ad and its landing page to the selected keyword.  A user is searching for “blue suede shoes” wants to see information on that specific topic, not a page with 100 different types of shoes.

Conversion Rate and Traffic are Equally Important

A typical conversion rate from a searcher seeing your ad and actually clicking on it is, called the click through rate (CTR), is from 1 to 2%.   Meaning , 98 to 99% of users that saw your ad were not  interested enough to click on it!  Best practice is to do some split testing of your ad and determine which version creates has a higher CTR.

To get the highest conversion of prospect to lead, or prospect to customer, the landing page must be effective.  Some trial and error is required here.  Best practices to do some split testing of your ad to various versions of landing page; send half the PPC traffic to version 1 of your landing page, send the other half of the PPC traffic to version 2 of your landing page, and monitor the conversion rate of each.  Continue to do the testing until you’ve achieved landing page with the maximum conversion rate

There are myriad other settings within Google Adwords and Bing Adcenter that can be tweaked.  You can choose to search on Google/Bing,   and/or, the research partners, and or, their content network.   You could expand or restrict or exclude grammatical variations of your keywords.    Unless you have a lot of time on your hands to learn and become a specialist, it might be better to outsource the management of your PPC campaigns to marketing specialist in this area.

PPC For Testing Only?

Any form of advertising can represent a significant expense to the business.  How cost effective it is depends on how much revenue was actually generated by advertising at the end of the day.   Other techniques may be more cost-effective depending on your industry or product.

Use PPC advertising as a testing tool rather than a long-term traffic generation tool.

Knowing which keywords will actually drive prospects to your business, as opposed to hoping that the keywords you chose are the right ones, can save you a lot of wasted time and money.  For example, before writing articles about a particular keyword and using search engine optimization to drive traffic to your website for that keyword, use PPC to test whether those keywords drive the level of traffic you expected and can be converted at the rates you expected.    The results of your PPC testing can greatly improve the effectiveness of your search optimization efforts thereby driving maximum ROI.

Knowing which landing pages will actually convert prospects, as opposed to hoping that the page is compelling enough, can be invaluable.   If your bounce rate to a webpage is 90%, and the time spent on the page was only a few seconds per visitor, you know immediately that the page is not retaining the interest of your visitors or converting them into prospects.   A Facebook ad could help you realize that women between the ages of 35 and 45 converted 15% better with your ad than men from the same age group.

You don’t have to be an advertising guru to kick off an advertising campaign.  As the business or marketing leader for your company, however, you do have to understand which advertising methods will give you the best ROI and increase your company’s revenue.   At Marketing Outfield you can outsource the management of your PPC campaign with fixed priced advertising services from buyer rated specialists.  With cost effective outsourced services, you can focus the attention of your in-house team on areas that are not as easily outsourced.  Take advantage of all available marketing techniques to cost-effectively grow your business.


About David Hubbard

David Hubbard is Marketing Outfield’s CEO and Chief Revenue Growth Consultant with deep experience leading Marketing, Sales and Product Management teams. He has helped both private and public companies grow by 25-50% per year by delivering Chief Marketing Officer / Chief Sales Officer fractional, interim and project consulting services. Start accelerating your profitable revenue growth today! Request a Complimentary Revenue Growth Consultation.