Thursday, 18 August 2011

The Pay Per Click Advertising Minefield

Pay per click advertising is exactly as it sounds. You advertise online and every time someone clicks on your advert... you pay. It’s a great way to get on the front page of Google or Bing... however, it is a minefield and many people have lost $1000’s using pay per click advertising and failing miserably.

Basically, if you had a dog training product to sell you would open a Google Adwords account and advertise using the key phrase ‘dog training’ and your advert would appear down the right hand side or at the top of Google searches where the potential customer has entered a phrase including ‘dog training’. The customer clicks on your advert, you get charged 50 cents or whatever your bid was for that particular phrase and the potential customer visits your website or eBay product page and hopefully buys something.

This sounds very simple and it is... it is so simple that anyone can do it with little or no knowledge of advertising or marketing. This is exactly why Google makes so much money so easily. The problems arise when you need 100 clicks to get a sale. Do the math... $50’s to get a sale. This of course means that your product needs more than $50’s profit in the price of it after running costs etc. As you can see, pay per click advertising is a minefield. You have to get the keyword right so that it is targeted traffic. Meaning... traffic that actually wants to buy a ‘dog training’ product.

Facebook and many other social networks also offer pay per click advertising and this is more targeted as you can pick exactly which customers see your adverts but it is very expensive. You will pay twice as much per click for Facebook advertising as Google or Bing. On Facebook you won’t get much for less than a $1 per click. The internet is riddled with people losing sometimes thousands on pay per click advertising. You do have to be very careful and experiment with keywords or phrases as some will yield great returns and some will get you lots of traffic but no sales.

Pay per click advertising leverage is what you aim for, clicks that cost 20 cents and make you on average 40 cents per click. If you have a product with $40’s profit and it takes 100 clicks to get a sale (which is normal) and you have paid 20 cents per click you have made $20’s per internet sale. That’s good leverage. This is not easy to achieve... so be prepared to experiment slowly until you find the right key phrase at the right price.

If you can get the pay per click advertising leverage working you will make money very easily. However, my advice would always be to work on SEO even if you have to pay someone to do it for you as it will generate free traffic and sales which won’t eat into your profits. Search Engine Optimization will get you on the front page of Google and Bing for free. $50’s spent with a good SEO company will generate a lot more sales in the long run than any pay per click advertising will.

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