The Lowdown on Pay-Per-Click Advertising

Pay-per-click advertising can bring a stampede of shoppers to your site, but make sure your keyword performance is profitable.
Magazine Contributor
2 min read

This story appears in the June 2006 issue of Entrepreneur. Subscribe »

Pay-per-click delivers serious shoppers to your site instantly, and it's cost-effective if done right. Play smart with the three leading search engines--Google, MSN and Yahoo!--to drive in new customers without blowing your budget.

Why advertise on all three? Not only do they get the lion's share of search engine traffic, but they also feed their PPC ads to different sites. For example, Google feeds AOL, and Yahoo! feeds (MSN has not yet announced its distribution partners.) With different audiences and advertisers, your ad's performance can vary on each engine.

The minimum bid on Google AdWordsis 1 cent per click. MSN Keywordsis 5 cents per click, and Yahoo! Sponsored Searchis 10 cents per click. All have a $5 account activation fee. The highest bid gets the highest position on Yahoo!, whereas Google and MSN give the highest position to the advertiser with the highest bid and the highest click-through rate.

To truly profit from PPC, don't count clicks, count conversions. Use the search engines' free conversion tools, or a third-party tracking tool, to see how much each keyword makes--or loses.

One keyword can be wildly profitable on one PPC engine, yet bomb on another. You also need to know at which bids and positions your keywords perform best on each engine. If you've tried PPC and lost money, consider: Did you test more than one search engine? Did you use conversion tracking for your keyword performance?

If you didn't do both, you lacked the critical information necessary to make good decisions. Competition in the PPC space is tough, so it's essential to track your campaign at the keyword level. If lowering your bids and changing your ad copy can't make certain key-words profitable, cut them. But don't carelessly kill the entire campaign or neglect to try another search engine.

By trying all three search engines and tracking your keywords, you can make sure your clicks convert to sales.

Speaker and freelance writer Catherine Sedaowns an internet marketing agency and is author of Search Engine Advertising.
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