As we have seen in Part 1, pay-per-click (PPC) marketing is one the most effective ways to build targeted traffic to your website. When all is said and done, the biggest downside of pay-per-click advertising is that essentially, PPC is a bidding war. When someone places a higher bid than yours, your position on search engine results is automatically lowered. This means that if want to regain your position, you will have to raise your bid too - and that obviously can quickly become expensive, especially if you are bidding on a popular keyword. So you may ask, how do you determine if pay-per-click is a cost effective way of advertising your business? The answer lies in a few simple metrics to figure out how much each visitor to your website is worth. In order to compute this most strategic number, your visitor value, simply divide the profit you make on your site over a given period of time by the total number of visitors for that exact same time period. For instance, if your site made $1,000 in profits and there were 1,000 hits, in theory each visitor is worth 1 dollar. Remember, the basic formula is profits divided by visitors. In other words, your business breaks even at the point when you pay 1 dollar for each visitor. But you are in business to make a profit, not just to cover your costs. Therefore, you will want to pay less than 1 dollar a click. Be aware that the most popular keywords or phrases often cost much more than 1 dollar per click. The single best way around this is to bid less for these keywords or you will be end up paying too much for each visitor. Stay tuned for Part 3... Copyright Luc Andria You have full permission to publish and distribute the above article electronically, in print, in your e-zine, website or e-book free of charge provided this entire resource box and the links in the article are kept intact. |
