Advertising
Understanding the Terms of PPC Advertising
In the world of Internet marketing, it has become one of the mainstays of the Internet marketer’s arsenal of advertising alternatives.
The basic idea and concept is simple: As an advertiser, you pay for the number of “clicks” you receive to your website, advertisement, banner, marketing article, etc. The search engines send you traffic (someone who “clicks” their mouse on your key words as they search the Internet) according to the pre-established cost that you will be charged for every visitor or impression your advertising accumulates.
When you think about this concept, it really makes great sense. You pay the search engines to send you a customer looking for what you are offering.
There are, however, some increasingly difficult challenges that make this kind of advertising sometimes a tricky proposition.
You may have known someone, or read about a particular circumstance, where the advertiser wasn’t careful and “lost his shirt” on his PPC advertising campaign. He spent a ton of money hoping to get major traffic to his offer, but when the traffic came very few (or no) sales were made to justify the amount spent on advertising the campaign.
Because of the huge and increasing competition on the Internet for keyword placement and positioning, the cost per click for most of the more heavily searched keywords is rising steadily.
Advertisers can pay $15 or more for just one click, i.e. just one customer clicking on an advertising message. Obviously, there is no guarantee that the customer will ever buy anything or even give up his contact information following that click.
If the keywords or phrases for that PPC campaign are not carefully targeted, chances are that Internet prospect will click away from the website ad within seconds as he realizes that the page he has been taken to is not what he was looking for.
I’d like to review with you what Google (the world’s largest and most important search engine) says about it’s PPC (pay per click) terms so that you will understand the basic definitions of this advertising method. If you don’t learn these terms well, you could lose a lot of money and effort with your advertising campaigns.
Keyword
The keywords you choose are the terms or phrases you want to “trigger” your ad to appear. For example, if you deliver fresh flowers, you can use “fresh flower delivery” as a keyword in your AdWords campaign. When a Google user enters “fresh flower delivery” in a Google search, your ad could appear next to the search results.
Campaign & Ad Group
AdWords accounts are organized into campaigns and ad groups. You start with one campaign, which has its own daily budget and targeting preferences. As you expand your advertising, you add more campaigns or ad groups, which are sets of related ads, keywords, and placements within a campaign. For example, you might choose to create one campaign for each product or service that you want to advertise.
Click
If a customer sees your ad and clicks on it to learn more or to do business with you, it’s recorded in your account as a click. Monitor your clicks to see how many people choose to enter your website from your ad.
Cost-Per-Click (CPC)
With cost-per-click (CPC) pricing, you pay only when someone clicks on your ad. You can have AdWords manage your CPC automatically, or you can choose a maximum CPC bid. Your CPC bid helps determine how often your ad can appear and its ranking on the page.
Impression (Impr.)
The number of impressions is the number of times an ad is displayed on Google or the Google Network. Monitor your impressions to see how much exposure your ad is getting.
Click through Rate (CTR)
Click through rate (CTR) is the number of clicks your ad receives divided by the number of times your ad is shown (impressions). A keyword’s CTR is a strong indicator of its relevance to the user and the overall success of the keyword. The more your keywords and ads relate to each other and to your business, the more likely a user is to click on your ad after searching on your keyword phrase.
Average Position
Average position is a statistic displayed in the “Avg. Pos” column in your AdWords account. It refers to the position on a search results page where your ad appears for each of your keywords. “1” is the highest position on the first page of search results. There is no “bottom” position. An average position of “1.7” means your ad usually appears in positions 1 or 2. Average ad positions are not fixed; they may vary depending on various performance factors.
By learning about and understanding these PPC terms, you will be better able to set up your advertising campaigns to be profitable.
It is totally up to you whether you make or lose money using PPC ads. Google (or your ad placement company) makes its money either way.
Yes, they want you to be successful so you’ll spend more and more advertising dollars with them, but if you spend your money on an unprofitable campaign they are not going to say “Sorry about that, here’s your money back and please try again!”
As with most marketing, you pay up front and take your chances.
To your online business success,
Steve Browne
www.stevebrownedirect.com