An Overture Pay Per Click Search Engine Marketing Guide

In recent months, there has been an abundance of research, statements, and news surrounding the effectiveness of pay per click ("PPC") search engine marketing. Overture, formerly GoTo.com - is the most substantial PPC system, and is incorporated across many of the top search portals. Successful online marketing can be easily acquired through the usage of Overture and other pay per click systems.

For those within marketing departments, and others responsible for measuring the success and investment of web site promotion, there are some clear issues that can present themselves. It is best for anyone within such a role, to become familiar with what some of these disadvantages are.

Since PPC marketing is most applicable to retail based operations with an online presence, let's focus on the variables of success that are measured the most often. From there, we can begin to predict and analyze what changes will become evident, and what to watch for.

Increasing Overall Web Site Visitors
Measuring visitors coming into a retail site is much like counting shoppers as they walk in and out of the doors of any storefront. The number of visitors coming into a web site will in turn affect a number of other variables, as we will discuss. Paying for visitors through PPC marketing should result in a dramatic increase in visitors.

Web Site Visitor Worth
An excellent way to determine your maximum bid levels when using PPC marketing is to analyze the worth of the average web site visitor. For the sake of example, we can imagine that our web site obtains an average of 75,000 unique visitors a month, while generating about 1900 orders of products. If the average profit per order (or sale) is $35.00 - than we can begin to figure out what our average visitor is worth.

To do this, take the number of orders per month and multiply that by the average amount of each order. For this case, we would multiply 1900 by $35. The result of this equation, within our example, is $66,500. So, our web site earns a profit of $66,500 based on visitors' orders on average.

Now, we must find out the general worth of our visitors to find out how much we can spend on PPC marketing without risking the loss of profit. To do this, we will divide the monthly profit of $66,500 by 75,000 - - the number of overall unique visitors that comes in to our site monthly. The final numbers through this calculation would show us that for each visitor to our site, we earn a profit of $0.88.

How does this apply to PPC marketing? Well, we now know that every visitor coming to our site is potentially worth $0.88. This means that we can then spend up to $0.88 on a single PPC bid if conversion rates were to stay the same - and not lose any of our profits.

While we could spend $0.88 to get someone to our site, we are like everyone else, and want to make money through our online store. Entry-level PPC marketers should be careful not to exceed one half of the general visitor worth within bidding. Bear in mind, the numbers game will drastically change once PPC is introduced to a web site.

Bid Selections and Changes in Conversion Rates
PPC marketing introduces more visitors to a web site at a cost. The visitors though, have been paid for because they are determined to be qualified and targeted visitors. When working within a PPC system, you are strongly encouraged to seek out search terms that are both popular in your market as well as ones that encourage transactions to be made.

One of the largest downfalls of the PPC marketing world is the ability to become too broad when defining the terms you want to bid on. If your web site sold toys like Toy's R Us would, you would not necessarily want to target keywords like "toys", because you could be spending money on visitors that have no interest at all within your site.

How could that happen? Using the Wordtracker database to our advantage - we can see that for the keyword "toys," many of the searches surround keywords and phrases that are absolutely not within our market as they deal specifically for mature audiences. Of course, the majority of those searching may exist within your targeted market, but a good number (often towards 40%) are absolutely NOT within your market. Those searching though, still click on that listing, see a site they do not want - and leave.

The result? You have paid for a click, acquired a visitor with no interest, and your conversion rate has dropped.

Countering the Detrimental Effects of PPC Marketing

Understanding the Problems
The most noticeable detrimental effect of PPC marketing is the ability to have conversion rates drop. Yet, the whole point of spending the money within the PPC marketing arenas like Overture, LookSmart, and others - is to INCREASE the number of visitors and sales through acquiring more targeted leads.

Importance and Focus on Conversions
A PPC system will deliver more visitors to a web site. Once at your site, that visitor needs to be encouraged to make a transaction. Creating a site architecture and design that motivates and facilitates transactions is critical. If you are unsure of the power and ability your site has to convert into sales - seek out professional usability tests before entering the PPC arena.

Increasing the site's ability to convert visitors into customers is critical to the success of a PPC campaign. You are far better off if you can improve your customer conversion rates before starting the campaign. The result will be evident in your ROI increase while the customer acquisition cost becomes lower. As a result of increasing conversions - you can generate more while keeping the same original campaign cost.

Moving the Focus from Conversions to Merchandizing
Once you have acquired a higher or more stabile level of customer conversions, you should then focus on making the site work well as a merchandizing tool. Otherwise, driving more traffic to your PPC intentions is partially wasted.

While every market is quite different from one another (like toy buyers compared to jewelry buyers) - some constant variables require attention.

Cater to Customer Needs
Your web site visitors are browsing for a specific purpose. Whether it is to purchase a product, or simply research things - they have come in for a specific reason. Nowadays, it seems as though no one has the time to just browse through sites without purpose. The Internet after all, is about finding what you want and need quickly and easily. Make that happen for your consumers.

Sell Your Products, Not Your Ego
When shopping within a retail environment, you tend to work best (and trust) those who are helpful to your needs without being arrogant. I have yet to meet anyone that enjoys a salesperson pushing products at them without regard to their needs. Your site must act like the salesperson your audience would expect in an offline environment. Offer helpful and pleasant advice; suggest products or sales items that meet their needs and budgets. Do not let your site assume the role of the overbearing sales associate set on pushing the wrong product at the wrong customer. It is simply unhealthy business practice.

Offline business has set standards for how online business and commerce should take place. Instead of facilitating the ideas that you can get away with anything - make the most of your efforts and assume that consumer's mind set and psychological approach to shopping has not changed with the implementation of technology.

Do Not be Afraid to Change
Sometimes the smallest of changes can make the greatest impact on consumers. Imagine buying a luxury car in this day and age that did not have power windows or power locks? Well, just a decade ago - that idea was not so far fetched. The reality of business, especially for retailers - is that there are trends set by some and adopted as the norm by the consumer. As a result, everyone else follows suit. Make your online store become that trend setter before it becomes a follower. If you believe that a slight change can make a difference - try it. It very well may give you the advantage over the competition.

Another reason to welcome change is this fact - You cannot repeat the same things over and over again while truly expecting different results. Make a change, evaluate performance, and go from there. No one ever said that running an online business was easy - they just said it can be fun and exciting!

Conclusive Advice
For those without any PPC experience, start by realizing that Overture is the largest and most used system available because it is the most effective. If you are going to start using any PPC system, I would advise using Overture.

When entering the PPC marketing world, do not expect a gold mine of results to await you immediately. PPC is a system that simply magnifies the number of targeted leads to your site - and it is not the only way to deliver targeted leads.

Lastly, please understand that in order to enter the PPC arena - you will need to set aside a serious amount of money. It is not uncommon to have retail operations spend thousands on a daily basis through PPC just to find out that their efforts were not the most targeted or accurate as they could be. Take the time needed to get everything in place and use industry tools to your advantage. Forecasting the results of a solid PPC campaign is crucial to making your site more effective in the long run.
May 28, 2002