According to Forbes, pay per click (PPC) advertising is growing at a very fast pace. By 2008, companies will spend $8 billion a year on PPC advertising. It will only get more expensive and more competitive in the future.

Managing an effective PPC campaign isn’t easy. There are several important issues involved, which I detail below. Not addressing all of these issues properly will result in poor sales performance, spending more than necessary, and overall decreased return on your investment.

Keyword Research

All pay per click advertising requires a list of keyword phrases. Identify which terms you think your potential customers will search for when thinking of your products or services. Since you already have a website, it’s often handy to take a look the existing search terms you’re being found for in the organic search results—look at your existing website statistics. There are many online tools that help with keyword research, including the online tools provided by Google AdWords and Yahoo! Search Marketing (formerly Overture). Wordtracker is also a good service to help with keyword research, although they charge for their research service. Hitwise also can help with keyword research and, like Wordtracker, also a paid service.

Once you come up with an initial keyword list, you’ll need to choose a PPC search engine, set up the account(s), write ad copy, decide on a daily and monthly budget, and set up landing pages for your ads.

Keyword search trends are constantly changing and evolving. Over time, your potential customers will be searching for different keyword phrases depending on industry trends, the time of year, changes in the economy, and other factors. It’s always good to do a major review of all of your keywords on a regular basis, perhaps once a month. And as you watch your website statistics and sales activity, adjustments will inevitably need to be made depending on which keyword phrases are returning the greatest ROI.

Choosing a Pay Per Click Search Engine

There are more than 15 major pay per click search engines. Google, Yahoo!, and MSN generally have the most traffic, but did you know that new pay per click advertising opportunities come available all the time? Each industry has unique pay per click opportunities—there are comparison shopping search engines that charge on a CPC (cost per click) basis that are good for companies that are selling consumer products. There are even Business to Business search engines that specialize in industrial products, as well. Choosing the right PPC advertising opportunity is key to your overall marketing campaign’s success.

If you’re selling a consumer product, you might consider listing your products in the following shopping search engines:

Pay Per Click Analyst is a website that reviews all of the PPC search engines.

All of the PPC search engines have different backend systems that work in unique ways. It’s necessary to keep up with the latest techniques for efficiently using each system. Unfortunately, only time and experience with using each PPC search engine will allow you to become more efficient at getting new campaigns set up and managing the account on a regular basis.

Click Fraud

Click fraud exists at every search engine. What is click fraud? According to a recent article by Duncan Parry about click fraud at Pay Per Click Analyst,

"Click fraud occurs when a pay per click advertising link is clicked on for a malicious reason – in other words, by somebody (or a piece of software) that isn’t interested in the products, services on content the advertiser’s website." There are several types of click fraud, including affiliate fraud, competitor fraud, and unintentional "fraud".

Each PPC search engine generally has a dedicated team of employees that are constantly watching for fraud in their system. However, that doesn’t mean that every PPC search engine will catch every instance of click fraud. But watching the traffic to your website on a regular basis by reviewing your website statistics, you should be able to identify inconsistencies when they arise. There are several companies that deal directly with click fraud issues—they work with you to recover money from the PPC search engines if and when fraudulent clicks exist. Some of these pay per click audit firms include:

Maximizing Your Overall ROI

To maximize your return on investment from a comprehensive pay per click campaign, you need to be doing the following:

  • anage the overall PPC budget – Don’t run out of money too quickly. If you bid too high and spend all that money, your ads won’t show up in the search results.

  • Keyword research – Create a list of keyword phrases and constantly adjust the list based on ROI of your campaign.

  • Copyrighting – Write effective online ads that causes searchers to click.

  • Competitive analysis – Do you know what keyword phrases are your competitors bidding on?

  • Detailed campaign analysis and reporting – Are you using the latest technology that produce reports to tell you where you’re getting the best ROI?

  • New keyword opportunity identification – Using a combination of competitive analysis and industry trends, you can identify new keyword phrases that are being searched for by potential customers. These new keyword phrases are typically less expensive and can provide an even great ROI than other keyword phrase.

  • Online sales tracking – It’s important to know exactly which keyword phrases are bringing sales. Are you using the latest technology and tracking capabilities to track all of your online sales and know exactly where they’re coming from?

Managing a pay per click advertising campaign can be a very time-consuming task, especially if you’re not well-versed in all of the techniques and all of the paid advertising opportunities out there. If you have a very limited budget and a very small number of keywords in your list, setting up and managing a PPC campaign might be something that you can handle yourself. However, as you add more keyword phrases to your list and compete with more and more competitors, a PPC campaign can easily become unmanageable, requiring the need for a expert pay per click consultant or search engine marketing firm.

Discuss this article in the Small Business Ideas forum.
October 21, 2005

Bill Hartzer currently runs a Strategic Online Marketing Consultancy that includes services such as search engine optimization, social media marketing, and online reputation management.

Bill Hartzer formerly managed the Search Engine Marketing division of Vizion Interactive and MarketNet, leading interactive marketing and website design firms in the Dallas, Texas area.

Hartzer is a successful writer, blogger, search engine marketing, and social media marketing expert. During the past fifteen years, some of his many accomplishments include: Search Engine Marketing Manager, Vizion Interactive, Search Engine Marketing Manager, MarketNet, Search Engine Optimization Strategist, Intec Telecom Systems PLC, Webmaster, Intec Telecom Systems PLC, Founder, Dallas/Fort Worth Search Engine Marketing Association, Owner/Author, Corporate Web Site Marketing, Administrator, Search Engine Forums, Frequent Speaker, Search Engine Strategies Conferences, Frequent Speaker, WebmasterWorld's PubCon Search Engine and Internet Marketing Conference.

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