Pay Per Click advertising is what Google AdWords is all about. You can set a price you will pay for someone to click a link into your site. It doesn’t even have to be to your home page either. You can direct someone straight to a specific section. Setting a Pay Per Click campaign up can be a scary thing to do, since you are valuing what someone simply clicking with his finger is worth for certain search words.
With that in mind, figuring out how much a click is worth goes way beyond just the price you pay on AdWords. You have to determine how much in total sales you get from all the clicks you pay for, the number of impressions you are getting, and the overall time it takes for the clicks to come through.
Typically, more searched words are going to cost more. I’m going to go through a basic example with you using all hypothetical numbers. Imagine you decide your Shoes for Elephants company needs to get some more online sales. Yes, you sell shoes for the large animal found in Africa.
You use AdWords and bid on the following terms: elephant shoes, elephant sandals, big shoes, animal shoes, and zoo shoes.
The first term elephant shoes costs $10 per click. The next three terms cost $5 per click. And finally, zoo shoes costs just $2 per click.
After a week, you determine that you had $400 dollars in sales off ten clicks ($100) and four conversions (a concluded sale through the ad) on your elephant shoes ad. The next three terms yielded 150$ in sales on 50 clicks with five conversions. And finally, zoo shoes generated $600 in sales for you with 100 clicks and 50 conversions.
Your cost per conversion on your elephant shoes campaign was $25. On your next three search terms, the conversion cost was $50. On you zoo shoes campaign the cost per conversion was 4$.
Now, what did those conversions actually earn you is the next question? On the elephant shoes campaign you made $300 dollars in actual sales (total sales-ad cost) and on the next three campaigns you broke even. The zoo shoes campaign generated $400 in actual sales. So, which campaign was the most successful?
We know the second set of words was definitely not a winner. The elephant shoe campaign yielded an average sale of $100 and the average sale for the zoo shoes campaign was $12. If you examine the conversion cost as a percentage of the sales, the elephant shoes click costed 25% of each sale. The zoo shoes click was 33% of each sale. It’s pretty clear which campaign was more effective cost wise.
Pay per click advertising is mystifying and at Market Me Management we can work through the click buying process with you. We’ll find you the most effective keywords. Click below if you would like us to help you with this.