Pay Per Click Management Techniques

 What Is Pay Per Click 

Pay Per Click or PPC has really gotten popular over the years.  It's an incredible tool when used correctly.  If you're not sure what you're doing, it can be a big waste of money.  On this page, I will share the things that I have learned from trial and error, and from reading and studying the topic.  For those that are new let me explain how it works.  I'm sure you've done tons of searches on Google, Yahoo, Bing, etc.  When you type in the term you are looking for and hit search, you will get a list of results.  The results at the very top and down the right side will be paid ads.  The results down the left will be the natural results or the organic results.  With all the millions of searches being done every day, wouldn't it be great to have your ad at the top?  Well with PPC you can.  With PPC you are bidding on keywords that are relevant to your ad. 

If you sell lamps, then you would want to bid on keywords such as lamps for sale, bargain lamps, and quality lamps, and you get the picture.  When someone searches for one of these terms your ad will appear somewhere in the top or right side of the search result.  Where your ad appears depends on how much you bid for that keyword.  If you are the highest bidder you will be at the top left.  If you are the lowest you might not appear until the second page of the results.  Sounds a bit confusing at first but it's not. 

The reason this is a great tool is it lets you target the keywords you will bid on, you create your ads based on these keywords, and you only pay if someone clicks on your ad.  You also get to set your budget.  You can decide that the most you will pay each time your ad is clicked on is .24 cents.  You can also set a limit of $5.00 dollars a day.  When your limit is up your ads will stop displaying for the rest of the day.  If your going to spend money on advertising then this is a great way to go.

Pay Per Click Management Techniques:

Many clients believe that it is relatively easy to manage a Google Ad words account. When using Google's Starter Edition account, this may well be the case. But when we factor in Google's philosophy on Ad Placement, being that the number one position is the best place to be, then there may be a conflict of interests.

Google may be correct that the most clicks will be achieved when positioned at number one, however, this does not necessarily mean that the client will get the best return on investment (ROI).

Contrary to popular belief, advertising in Google Ad Words is not all about how big your budget is. Google Ad Words is a very sophisticated system in that it will reward you if your products/services are more relevant than your competitors to any given search phrase.

Google Ad Word rates its ads on the ‘quality score’ that they achieve. This ‘quality score’ is a ranking system devised by Google to rank all advertisers equally, even if one advertiser's budget is much higher than another advertiser's. However, you must provide quality content/products/services and an optimized Ad Words account in order to get a higher ‘quality score’.The quality score takes into account many factors. These factors include:

Click Through Rate (CTR) – This is equal to the number of clicks divided by the number of impressions.

Max Cost Per Click (CPC) – This is the maximum bid placed on any particular keyword.

Ad Text – The relevancy of the ad text in relation to the keyword phrase typed into the search engine.

Landing Page – The relevancy of the content on the landing page (where the ad points the user to) to the keyword used and the ad clicked on.

Below is an example that shows the placement of ads belonging to four different advertisers when we take into account their CTR, max CPC, and Quality Score:

	Max CPC	CTR	Quality Score	Ad Position
Advertiser 1	0.55	5.8	3.19	1
Advertiser 2	2.05	1.5	3.06	2
Advertiser 3	3.80	0.6	2.28	3
Advertiser 4	1.20	1.8	2.16	4

As you can see from the example above, Advertiser 1 is actually spending the least amount, while still achieving the top advertising position, thanks to a high CTR, and thus the highest quality score. Although Advertiser 3 is spending the most, he only achieves 3rd position because his Ad Words account is poorly optimized, having the lowest CTR out of the competing advertisers. From this, you can see how important it is to maintain a high-quality score to achieve the best ROI.