When pay-per-click advertising is good, it's very, very good. Nothing gets highly targeted traffic to your website faster, or gives you a nimbler platform for testing. But when it's bad, Vegas is the only place you can lose money faster.
Unfortunately, most pay-per-click beginners don't get past the bad before they just give up on what could be their greatest marketing weapon. We hear the same question all the time from newbies: "Why am I getting click-throughs but no conversions? It's costing me a fortune."
In all likelihood it's because of one or more of these factors:
Click fraud: In our experience, some of the smaller PPC search engines deliver clicks but no conversions. Check the clicks-to-conversion stats for every search engine you use, then stop using any where the results are seriously out of whack compared to your PPC performance on the other search engines.
That said, don't think Google is the only search engine you should try. It's the biggest, and therefore most competitive. You might get more conversions for less money using other PPC programs. And the nice thing is that if they don't work out, you can just stop using them.
Content network: If you're using Google AdWords, your ads can be seen either in the search results (search network) or on relevant web pages (content network), or both. Opt out of the content network when you're starting out. It's a different animal entirely and requires separate ad campaigns.
Lack of keyword research: Do you know what keywords your potential customers are using to find products like yours? If you're just guessing, you're costing yourself money.
A good keyword phrase generally has three or more words in it and clearly shows the intention behind the search. So when you think you've found a keyword, ask yourself, "What problem is this searcher trying to solve?" If you can't answer that definitively, then that keyword phrase is too general--and you're probably going to lose money on it.
The Google AdWords Keyword Tool is free, and it will show you an amazing range of information that will help you zero in on affordable, targeted keywords that will pull in people with a problem that your product can solve.
Here's an example: A quick search on "scrapbook supplies" showed an estimated cost of $2.73 per click to get into one of the top three positions for that keyword. Yet for 8 cents you could get in the top three positions for "digital scrapbooking supplies" or "scrapbooking supplies paper." The estimated traffic for those words is lower, but the words themselves are more targeted--and more likely to convert.
So for the same money you can get 34 clicks on a more targeted keyword, or one click on a less targeted keyword. No contest!
Scattergun ads: Each ad should be built on one keyword phrase that relates to one very specific problem. If your ad is too general, chances are that someone who clicks on it could be looking for something else entirely.
Your product may be able to do all sorts of things, but you want one ad, or even one ad group, for each problem it solves.
When you're writing your ads--and this is something you really need to spend time on--first, think like someone who searches using the keyword in your ad. Is it clear that if they click on your ad, they'll find the exact solution they're looking for? If not, back to the keyboard for some rewriting.
Use your keyword in the header and try to work it into the body of the ad as well. And don't forget to talk about how your product benefits the reader instead of just mentioning its features.
Irrelevant landing page: Link your ads to the most relevant page on your site, so people know they've found what they're looking for. If they click on an ad for a yellow raincoat and land on a page with all sorts of other products, or they have to figure out how to navigate to the yellow raincoat page, you've lost a sale. Your ads need to take them where they want to go. The best thing is to create a landing page for each group of related ads.
Sticking with the same old ad: Finally, if an ad isn't working, test other ads against it by changing one single element and running them against each other. Consider your original ad the control ad, then change the headline and see if the new ads get better results. If so, that becomes your control ad, and you run it against a new one with the wording of the ad changed. Keep going until you have an ad that's getting the best conversions. PPC advertising is the easiest way in the world to test your effectiveness.
With pay-per-click advertising, always keep one thing in mind: Click-throughs cost money, and conversions make money. So check to make sure that none of these obstacles are getting between your PPC click-throughs and your conversions.