So you've decided to give pay-per-click search engine advertising a try? That's a good move, because PPC advertising is one of the most affordable marketing options available to small businesses.

But like most advertising, you need a good strategy to get your money's worth. I find that too many people running their first PPC campaign make mistakes that can quickly turn expensive.

In this article I'll offer some basic advice about bidding and keyword selection to help you run a smart PPC campaign.

Just What Can You Pay Per Click?

The most important thing to know before starting your PPC campaign is how much you can afford to bid for a keyword. High traffic keywords on Overture and Google the leading PPC providers - can cost $5.00 per click for a top ranking. Can you afford that?

Consider this: the typical e-commerce site converts about 2% of its visitors. That means you need to bring 50 visitors to your site before you make a sale. At $5.00 per click, you'll spend $250 dollars to generate one sale. Ouch!

Keep in mind that you usually want one of the top 3 listings for a keyword. These are the listings distributed to most of the PPC engine's partner sites. For example, a #3 ranking on Overture will place your listing on Yahoo, MSN and Alta Vista. A #7 listing won't appear on any of these search engines.

So you're caught in a catch-22: you want a high PPC ranking to get traffic, but the top rankings for popular words are too expensive.

Cast Your Net Broadly

The solution is to cast your net broadly, targeting a large number of less popular keywords. These words are usually less expensive and, taken as a group, can give you a considerable volume of traffic.

For example, suppose you run a ski resort. The keyword "ski vacation" currently receives over 60,000 searches per month. That's great, but it costs $5.01 per click for the top ranking. Instead of competing head-to-head for that keyword, you would be better off choosing "ski trip" (4,771 monthly searches at $0.57 per click for the top spot) and "ski lodge" (4,244 monthly searches at $0.55 per click for the top spot).

By targeting a number of these less popular keywords, we get nearly the same traffic as if we had targeted "ski vacation," but at a fraction of the cost.

Note that this is the opposite of the strategy you typically use in your search engine optimization campaign. In an SEO campaign, you focus on perhaps a half dozen high traffic words. That's because it takes a lot of hard word to earn a top listing.

In contrast, it's relatively easy to create a new PPC listing. Since you don't pay unless someone clicks on your listing, there's no added cost for doing this, so targeting a large number of keywords makes sense.

The word "ski chalet" only receives 930 searches per month. So what? At $0.52 per click, it's worth adding to your PPC campaign.

It's common for PPC advertisers to target dozens of keywords. I've managed PPC campaigns for clients using over 1,000 words.

Smart PPC Management

The downside of this approach is that it can be hard to manage such a large number of keywords. You'll want to track your listings, making sure your rankings haven't dropped. Plus, you'll want to know which keywords are sending you traffic and converting visitors into customers.

Many businesses also use a PPC bid management software like Bid Rank or GoToast to manage their listings. These software packages track your listings, and can adjust your bid if you drop in the rankings.

Many companies also outsource the management of their PPC campaigns. Most SEOs now offer PPC management services. These options cost money, but they usually pay for themselves by running your campaigns more efficiently.

Keep in mind that you don't have to use a software package or a consultant to start your PPC campaign. But you do need to know what sort of cost per click you can afford. If you decide that $2.00 per click is your maximum bid, then stick with it. Don't get into an emotional bidding war if you lose a top ranking. It's much smarter to look for new and cheaper keywords. Cast your net broadly and you'll save money.
December 2, 2003

Christine Churchill is President of, a full service search engine marketing firm offering organic search engine optimization, strategic link building, and pay per click management. She is on the Board of Directors of the Search Engine Marketing Professional Organization (SEMPO), the professional association of the search engine marketing industry and serves as co-chair of the SEMPO Technical Committee.

Search Engine Guide > Christine Churchill > Pay Per Click Search Engine Advertising: Smart Campaign Management Tips