Beginner PPC Information and Misconceptions

After a couple discussions with small business owners over the last week or so, it is definitely apparent that there are still a lot of misconceptions on PPC – search engine paid advertising – out there. So without further ado, here are some things to think about when managing your PPC budgets.

If you are new to PPC in general and want to learn more, here is a great resource on PPC, terms and definitions, background and everything you would want to know on the subject to get you started.

The #1 Position is Not Always the Most Favorable
In many cases, it will completely drain your budget without much quality traffic, especially in competitive search markets. If you are bidding in a high CPC environment, try to bid lower, say 3rd or 4th position, so that people must be actively searching the advertisements in order to find yours.

Your Home Page is Not The Only Landing Page
Many new advertisers simply place the home page of their website as the central landing page for all of their ads. If you are currently running a promotion or special, why not create a completely separate ad campaign that goes right to that page? If you are advertising regionally, but bid for local positions as well, create landing pages on your website highlighting both value propositions.

Ad Copy Matters
A recent Marketing Sherpa article states that aound 54% of users are aware of paid advertising in Google search results and I would bet this percentage has greatly increased with the rise in search engine awareness, publicity of click fraud and competitiveness in the marketplace. That means that your message needs to stand out when placed in front of the masses, but be sure to portray the most accurate and appropriate messaging.

Worry About Cost/Conversion and Not As Much With CTR
Click Thru Rates (CTR) are great, but I’ll bet that if you place “free” all over your ads (and they get approved), your CTR will increase dramatically. This just means that there are other factors involved in creating metrics for PPC success other than CTR and that CTR itself can be manipulated positively or negatively. When I talk to small businesses about PPC, I like to highlight how much they are spending to get the actual conversions (cost/conversion), and how they can improve that number, because in the end, PPC effectiveness is all about the contribution to the bottom line.

If You Get One Sale For A Proportional Amount of PPC Spend, It’s Really Not Effective
I’ve heard business owners state that if they spend $150 in PPC, and get one $150 sale, they are doing alright. That’s just not good business. Figure out what your profit margin is and then correlate that back to how much you spend to get a sale. Breaking even for revenue means your just feeding Google your money like a slot machine.

Consider Day Parting or Ad Scheduling
If you know that your customers usually make reservations after hours, or on Mondays and Tuesday. Consider tailoring your PPC spend to work for you in the peak hours of opportunity. Even if you don’t have a lot of data from Google Adwords or Yahoo, make estimations based on your offline transactions, and see if that makes your online advertising more efficient. Here are two links for reference to Day Parting:

The More You Spend, The More You Need Time You Need To Invest in Research and Analytics
If you spend a couple hundred dollars a month in PPC, with average Costs per Click, you probably do not need to dig too deep into the data, provided your bring in sales and profit. As you expand your budgets and get into hundreds or thousands of keywords, with 4-digit spends per month, it’s time to invest in real analytics tools to understand where you are making your sales and what keywords are bleeding you dry.

These are my initial thoughts on PPC, based on recent conversations and discussions on what has been working for small business and what has not. Feel free to contact me or add comments if I did not address something you were looking for, or would like to add to the list of PPC tips and information.


2 Responses to “Beginner PPC Information and Misconceptions”

  1. John Johansen on March 2nd, 2007 1:58 pm

    These are great tips for getting a PPC campaign started.

    PPC looks attractive because it is easy to set up. But, without a plan and proper management you can quickly outspend what you expected.

    One addition that I want to make that builds on all the points you’ve already made is that you should always be trying to target your ads to your customers.

    The Internet let’s anyone search on the keywords you are bidding on, so you want to make sure that the clicks you get are from people who are most likely to become customers.

    That’s easier said than done, but keeping it in mind will help you as you go through these other steps.

  2. dedmond29 on March 2nd, 2007 2:28 pm

    Excellent addition, and definitely my oversight. Thanks!