Pay Per Click Marketing

Pay Per Click marketing is also known as PPC. With PPC, you pay the search engine each time someone clicks the link in your ad.

Let's face it, it can take between six and twelve months to avoid being intentionally filtered out of the SERPS by Google. And after that, you'll still have to wait until your site begins to rank high enough in the SERPS to start getting clicks and traffic. So in the mean time you can get your ad listed at the top of the SE pages by paying for clicks.

Like many other areas of Internet marketing, keyword research is a critical part of PPC. You must know which keywords and keyword phrases the majority of people are using to search for what it is that you are selling. (Keyword research will be covered in another section of this site.)

When you start a PPC campaign, you are actually getting yourself into an auction. You and your competitors will bid on the keywords and keyword phrases that are most popular, with the highest listings going to the highest bidders. The more that a person is willing to pay for the clicks, the higher they will be listed in the search results, which are usually at the very top of the page and down the right side of the page.

PPC has become highly competitive for many of the popular keywords, which can sell for anywhere from five cents per click to many, many dollars.

PPC is often filled with fraudulent clicks. Competitors will click on your ads to drive up your PPC bill to try to get you to stop advertising and competing. There have also been some allegations and law suits regarding fraud perpetrated by the search engine companies themselves. And at least one of these law suits that I read about was won by the Plaintiffs.

I could write a lot about this area of marketing. But I think that your interests would be better served if I just "cut to the chase."

Conversion rates vary widely by industry on the Internet. But the average is similar to the mail-order business, between 1/2 of one percent, and two percent. And in the real world, projecting a one percent conversion rate would be fairly safe. (Though there are hundreds of variables that can make the one percent number way too high.)

What that means is that out of every 100 clicks on your links, you might get one actual sale. So if the markup (Gross Profit) on your average sale is $50.00, and your clicks cost you fifty cents each, you can't afford PPC advertising because 100 clicks X .50 per click = $50.00 and you just broke even.

Don't forget, "Gross Profit" doesn't include your overhead. It is only the difference between the selling price of your item and the cost of your item. So in the above example you actually lost money. You have got to know what your costs are, and that includes how much it costs to own your equipment, pay your rent, ISP, etc., plus the value of your time.

The bottom line is that most PPC has been bid up too high by the bigger businesses and it is difficult or impossible for a little guy to make money using PPC.

Beware of the companies who will offer to manage your PPC for a fee because they can't change the laws of math or physics. They will claim to have the expertise to help you, and they might. But they still can't change the laws of math or physics.

I've found that PPC can work, but you have got to carefully do the math. Can you make a reasonable profit based on the above calculations if you pay the current bid price for the keywords and get only about a 1/10th of 1% or 2/10ths of 1% conversion rate (sales rate)? If you can, then PPC might work for you.

I recommend that you stick with niche terms that haven't been bid way up. Personally, in my industry I'm only willing to pay between 15 cents and 40 cents maximum per click, and my products sell for between $40.00 and $150.00.

PPC? Do the math first, and then decide. But be willing to lose money while you learn how to make it work!

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