A well-oiled pay-per-click search engine campaign can land hundreds of highly targeted visitors on practically any website within a matter of days. That isn't new information. Most experienced online business owners already know it.But pay-per-click marketing is also one of quickest ways to lose money, if it isn't done right. At surface level, process appears to be as simple as writing an advertisement, bidding for keywords, and waiting for traffic and sales to come rolling in. Nothing could be farther from truth, particularly with today's heated degree of competition for top keywords.
So, for a few minutes, let us play role of devil's advocate, as we explore some of common downfalls encountered by hopeful but inexperienced pay-per-click advertisers.
1. - Making Advertising Decisions Based on Emotion
The excitement of tapping into a new market, and much anticipated thrill of watching click counters working overtime, can and often does lead to a hasty decision making process. Add to this a pressing need for a cash infusion, plus a bit of gambler spirit, and a framework for failure will emerge.
2. - Overly Generalized Keyword Selection
Keywords that are too broad in scope can inevitably lead to an excess of non-profitable clicks, driving an otherwise profitable campaign into red.
For example, a website selling athletic shoes should omit simple term "shoes" from keyword list. That term alone may generate a massive number of click-throughs. However, a good portion of resulting traffic will likely be looking for sandals, dress shoes, or some type of shoe other than athletic designs.
3. - Poorly Worded Advertisements
Pay-per-click ads are notorious for restrictions on allowed word count. While headline and ad body should contain as many prime keywords as possible, every single word in ad should be weighed and measured for effect. A vague or loosely related advertisement may pull throngs of curious visitors, but ultimate value of each of those visitors must also be considered. The point of a great ad is to attract only those who have a purchase already in mind.
4. - Failure to Calculate True Bid Value
An untested ad leaves much of this process to theory, but even a theoretical profit model is better than none at all.Otherwise, urge to bid simply for top positioning may ultimately spell an overall loss of profit.
Three critical points to consider are:
- product pricing - an acceptable profit margin per sale - a realistic clicks to sales ratio (CSR)
Let's say a modest CSR of 1% may be expected, meaning one out of each one-hundred visitors will order immediately. The product is priced at $69 and a 50% profit margin per sale is acceptable. Given these factors, up to 50% of product price ($34.50) can be spent to achieve sale and deliver product.