I used pay-per-click (PPC) advertising since its inception about two years ago. With PPC, the advertiser is charged when a person clicks on their link. The amount you actually pay for each click is considered the cost per click (CPC). I confess I was somewhat wary on the first. But since then I have seen the prices of certain keywords in search engine rocket over $ 10 per click! The big question is not how much it costs per click, but the number of clicks, it is necessary for a purchase. I am often asked why companies should pay as much as a lot of money for a retail of tacky, the index push? The answer is simple - it just works!
How to justify $ 10-per-click
The arrival of PPC advertising Internet marketing forever. It is a free market in much the same way as eBay - physical, and a relationship of supply and demand. For a keyword phrase like “debt consolidation”, the top five advertisers are willing to pay the cost-per-click fee of $ 10.01, $ 10.00, $ 9.99, $ 7.00 and $ 6.97. My first reaction was, has something to be wrong with this picture - they may not be easy! So I watched the “life” sentence in which the first five range from $ 7.00 to $ 3.50. Then there are drugs such as Xenical, from $ 6.76 to $ 6.74. There are many other examples in which the cost per click over $ 6.00, $ 7.00, or $ 10.00, but you get the point.
The fact is that during the PPC advertising can work quite well - it can also be a housing failure. If companies are willing to pay more than $ 5.00 per click, you can quite sure how you found it to work - otherwise they do not pay these prices.
Select the few
I have a lot of situations where PPC is a job for business but not for another in the same branch, with the same keywords. Large and small companies is venture, offer for a week or two, and then drop-out - never to be heard again. Some come, pushing prices upward, then fall back to the confusion. The few who managed the secret - a combination of patience, determination, creativity, keyword selection, management and evaluation. You mathematics every day - manage bids every day - they find new keywords, every day - they analyze the results every day. It takes a lot of work to discover how PPC advertising results, and those now enjoy - every day.
What is the cost of an acquisition?
To determine if your PPC-advertising is justified, the first thing you must understand is your acquisition cost - What is it now costs to purchase a new customer or order? It is surprising that few companies know what that cost is. To put it simply, take all your expenses for advertising and divide by the number of new acquisitions (markets or customers) that should give you a rough estimate of the cost per acquisition. In addition, after running a campaign of CSF for a month, you take all advertising expenditure divided by the number of acquisitions. Of course, these raw figures are not encumbered by administrative costs, but also one against apples-to-apples comparison.
I managed PPC campaigns, where the average cost per click was $ 0.40 and others where it was $ 5.00. The crucial question remains: the number of clicks, it is necessary for a purchase? If the cost of each click $ 0.40 and it takes 200 clicks to purchase, the cost of acquisition, then east of $ 80.00. If the cost of each click 5.00 dollar and it takes 10 clicks, the cost of the acquisition of 50.00 dollars.
Finding gaps
Two key points are essential: (1), as is the price for a purchase of the Internet compared to traditional methods? and (2) What is the value of a new client? In some companies, a new customer is $ 1,000, while in others only 10 dollars. Normally, the cost per click reflects this value, but given that the market is still very small, there are significant gaps. Remember the “debt consolidation” of keywords all up? The difference between the first and last cost per click of around 30%. On the other hand, there is literally no difference between the cost-per-click rate for the keyword “Xenical”. From this you can conclude that there is much more competition for “Xenical”, then it is for “debt consolidation”. The chance is between gaps in the differentiation of 30% for example.
The call for tenders for keywords in the market is still so new and not yet served, it is rare that more than three competitors in the debate for a certain set. Gaps in targeting keyword cost per click charges such as “The consolidation of debt are the norm and still enormous opportunities available to the media. At the moment, they are abundant, and the few people who took the time to understand important marketing tool, a time to act now!