The Cost of Pay per Click (PPC)

Pay-per-click marketing can be one of the most effective components of your web marketing strategy. If you’re not careful, however, it could also be one of the most costly. The cost of pay per click could easily exceed your budget.

For those new to pay-per-click, PPC is simply a search marketing program in which companies ‘bid’ to have their ad displayed in search results when a particular keyword is entered into a search engine. For example, entering the search term “web marketing firms” will result in a series of paid ads that typically appear at the top and sides of search results. These are different and separate from organic search results.

Additionally, social media platforms, such as Facebook, offer pay-per-click programs that allow you target your ad based on profiles and activities of users. In both models, you are charged only when a prospective customer clicks on your ad. If executed as planned, your ad is prominently displayed to prospective customers at the moment in which they are highly engaged in the purchase process. Of course, not everything always goes as planned. To be successful with pay-per-click marketing, it’s critical to keep an eye on costs, activity, and return on investment.

The cost of pay per click or PPC greatly depends on the relative competitiveness of the desired keywords (or in the case of social media PPC, the desired audience). A non-competitive keyword (or keyword phrase) could be as low as $.30/click, while we’ve managed highly competitive keywords that exceeded $25/click. Remember, that is simply to have a prospective customer click your ad – not necessarily make a purchase. While you cannot control the competitive landscape, you can control other factors that can impact your overall cost of pay per click programs – and results. Here a few critical factors to controlling costs:

Setting a daily budget. It’s important that before you launch a campaign, you decide how much money you will spend each day on your PPC program. Trust me when I say that Google will almost always serve up enough traffic to hit your budget –everyday. Setting a small daily budget, and increasing it as you measure success and eliminate non-performing elements allows you to ramp up your efforts and minimize your risk.

Organizing your campaigns. A frequent mistake that often leads to budget blow outs happens when pay-per-click campaigns are not organized correctly, or at all. Easily ramp up and ramp down based on your business objectives. Quite simply, where do you want to spend your money? It’s ultimately a business decision – do you want to support a new product launch? Is there a line of business that is under performing? When managing programs for our clients, our planning strategy has to account for many factors that affect where budget is focused. This includes seasonality, geographic focus, product/service focus.

Monitor your campaign – (often!) PPC is not a ‘set it and forget it’ marketing model. The surest way to waste money is by not monitoring your ad campaigns. Remember that competitors are engaged in the same types of programs that you are managing. They are updating bids, modifying keywords, and adjust budgets. And, just because you are getting clicks does not mean that it is translating into qualified leads / orders / business activity. Lack of active management is probably the biggest area of waste we see within PPC campaigns.

Add Negative keywords. Negative keywords allow you to prevent your ad from displaying when one of your keywords is combined with a (negative) word that changes the meaning. By under-utilizing this feature, advertisers spend lots of money on wasted clicks – reaching the wrong audience. For example, someone searching for cheap web design probably has a different goal that someone searching for effective web design.

Test different ads and features. Pay-per-click platforms (search engines and social media) provide terrific tools that will allow you to test many variables. One key ‘must-do’ is the testing of ads. Testing ads with different headlines, copy or calls-to-action, ensures you are maximizing impact – and increasing your PPC effectiveness.

Measure conversions. It’s fairly easy to measure which keywords and ads are generating clicks. In reality, you need to know which keywords are actually converting into leads or sales. By directing prospects to a conversion page (landing page, order page, etc.) and adding the appropriate analytics coding, you complete the entire picture of your program – and can allocate your budget to most responsive keywords.

Developing a successful pay-per-click program requires a leap of faith. There are many moving parts – and things change in a hurry. The great news is that with a little advanced planning, coupled with active management, you can create an effective program that doesn’t break the bank.