Pay Per Click
How badly do you want to be #1?
If you want a top spot, and either cannot wait for time
and work to hopefully pay off, or just don't want to
optimize your pages at the expense of a design you don't
like, then Pay Per Click search engines may be for you.
What are they?
If you go to just about any search engine, you will
see some listings at the top or to the side that say
something like 'Sponsored Results' or 'Featured Listings'.
These are almost always paid advertisements. In most
cases, they work on a Pay Per Click (PPC) model. You
(the advertiser) chooses a keyword or phrase you want
to be listed on and you bid against other webmasters
for your position. For example, if you want to be #1
on the key phrase 'fly fishing', you subscribe to a
PPC service and enter 'fly fishing' as a keyword you
want to be seen with. When you do so, you will see a
listing of other advertisers that want to be listed
on the same key phrase, along with how much money they
are willing to pay the search engine every time someone
clicks on their listing. You might see something like
Position Site Bid
1 Joe's Fly Fishing $0.27
2 Fisherman's Warehouse $0.25
3 Fish-O-Rama $0.12
4 Fishing Kingdom $0.05
In this example, if you do a search on the PPC engine,
these will be the top four results you see. Furthermore,
many normal search engines partner with pay per click
engines, and display their results in their 'Featured'
or 'Sponsored' areas. In most cases, the partners only
display the top 3 results. If you do a search for Fly
Fishing on one of these engines, and you click on the
#2 listing, for example, Fisherman's Warehouse will
pay the PPC engine $0.25 for the click you just made.
Suppose you want to be #1 in the same results. All you
need to do is place a bid for your site at $0.28, and
you instantly become #1... until someone outbids you.
On the other hand, you may be satisfied being #3, in
which case, you can simply bid $0.06, so the clicks
are not too expensive for you.
In the end, you are paying for the traffic you receive.
Making money with PPC engines
This kind of advertising can get real expensive, real
fast if left unchecked. It is extremely important to
know what your maximum PPC bid should be. You do this
by calculating your estimated ROI (Return on Investment).
Here is an example how you may do this:
Joe's Fly Fishing experiences the following statistics:
75,000 visitors per month on the website, that arrived
from search engine searches.
300 sales per month to those visitors.
The average profit per sale amount is $200.00
With this information, Joe knows he has a 250:1 conversion
ratio, meaning that for every 250 visitors, he will
make one sale (on average). He also knows that each
sale is worth $200 in profit. He multiplies the profit
by the number of sales to get his total profit ($60,000).
He then divides the total profit by the number of visitors:
60,000 divided by 75,000 = 0.80. This means that each
visitor was worth $0.80.
If this is true, Joe knows that in order to break even,
he can bid no more than $0.80 per click. Now he needs
to figure out how much he is willing to spend per sale.
If he is willing to spend $100 in PPC advertising per
sale, so that he can make $100 per sale, he should set
his maximum bid amount to $0.40. This way, if a PPC
engine sends him 10,000 visitors, he knows that it will
cost him $4,000, but he will make $8,000.
The ROI should be checked very often, because different
types of advertising will have different results, and
markets change. Remember, these are just estimates that
you will have to figure out based on your own experiences.
Never spend more than you can afford to lose.
WHICH PPC Engines?
There are many PPC engines. Some are more popular and
some are less popular. Unlike normal search engines,
a wise strategy may be to concentrate on the less popualr
engines for PPC advertising if you have a limited budget.
The reason is that the more popular a PPC engine is,
the higher the bidding tends to be for keywords. So
if you are trying to get 1,000 hits, you may be able
to get a #1 position on a smaller engine for a price
that would make you #20 on a more popular engine. In
the end, you are paying for traffic, so the less expensive
#1 position may be to your advantage.
Beware of Click Fraud
Remember, you are paying per click. That means that
your competition can cost you money merely by clicking
on your ad. Typically, if a person at the same computer
clicks an more than once in a certain amount of time,
it will only be charged once, but consider the fact
that some pay per click programs also have affiliate
programs in which partner sites get paid based on clickthroughs
from their site. What this mean is that a whole new
scam market has opened up. There are groups of people
all over the world that get paid simplty to go around
clicking these ads, generating affiliate commissions
fraudulently. While this may not seem to be a big deal,
it has been estimated that this is roughly a $2 BILLION
a year problem!
To combat click fraud, you can generally get refunds
from the engines if you provide them solid evidence,
which you can generally get through their reporting
system. Still, it is difficult and time consuming. A
smarter alternative is to make use of a service that
will filter your PPC results, making sure you don't
fall victim. ClickSentinel is considered the leader
in this area. Click here to visit their site.
Do it in AddWeb
AddWeb has a section called 'PAY ENGINES'. This section
provides you a listing of PPC engines that you can subscribe
to. Within AddWeb, you can simply click on an engine
link and it will take you directly to their pages.