Making it Work: Conversions, Not clicks

How do you engineer a successful pay-per-click advertising campaign? By paying more attention to conversion, and less to clicks. Keep five rules in mind:

Track Conversions

If you want to stay on budget, you have to track conversions. What’s a ‘conversion’? It’s any time a visitor to your web site takes a desired action. Examples of conversions might be:

• Visitor makes a purchase
• Visitor completes a sales inquiry form
• Visitor downloads a white paper and registers

A conversion doesn’t have to be a sale. But a conversion has to be worth something to you. If you can’t think of any measurable, useful outcome of a visit to your site, do not spend money on pay-per-click advertising – there’s no point.

Google and Overture provide conversion tracking – most other pay-per-click services do not, so you’ll need to look at third party tools such as Urchin, which is also an outstanding site traffic reporting tool, or GoToast, or my own firm’s Xed.

If the pay-per-click service you’re using doesn’t offer a conversion tracker, and you can’t afford to pay for a third-party tool, try something more basic: In a spreadsheet, track the number of conversions, total, per day. Do the conversions increase after you start your campaign? If so, you’re likely on the right track. If not, then there’s very little chance that your pay-per-click investment is working.

Why PPC Advertising is Bad

But PPC advertising can cost a fortune. It’s easy to get caught up in a bidding war over a particular keyphrase and end up spending far more than your potential return. Some PPC engines, such as Overture, offer convenience features such as ‘autobid’ that will automatically increase your bid amount to maintain a particular rank. That sounds great on its face, but it can get expensive in a big hurry.

Also, ROI can be very hard to measure. Some PPC engines (Adwords and Overture, specifically) provide conversion measurement tools, so that you can track whether your pay-per-click campaigns are generating the desired result. But these tracking tools aren’t 100% accurate, and at the time of this writing the smaller PPC providers don’t deliver any conversion tracking.

And watch out for junk traffic. Most pay-per-click services distribute a segment of their results to several search engines. While you certainly want your listing displayed on Yahoo, AOLSearch and MSN, you may not want your listings showing up and generating clicks from some of the deeper, darker corners of the Internet. The resulting traffic may look good in statistics reports but is very unlikely to generate a return.

Finally, pay-per-click advertising does not scale. If you get more traffic, you pay more money in direct proportion to that traffic – your cost per click stays constant, and your overall cost increases. Compare that to natural search engine optimization, where you invest a fixed amount of time and/or money to achieve a better rank, and your cost per click goes down as you draw more traffic.

Pay Per Click Advertiser

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