Pay per Click (PPC) or Cost per Click (CPC) advertising is one of the most cost effective and measurable ways of driving qualified traffic to your website and when managed correctly, can effectively maximise return on investment (ROI) for minimal cost.
When a searcher types specific keyword (for example ‘SPORTS shoes’) into the search box on Google, Bing or Yahoo!, a listing of results appears underneath. These results fall into 2 listing types, in particular ‘paid’ and ‘un-paid’ listings.
On this article, we will discuss the specificities of Paid Advertising (i.e. PPC Advertising).
PPC ads work on an auction model where you submit bids for
keywords based on what you are willing to pay for a click.
If you are new to search marketing, it is important to note
that the actual cost of a click may be lower than what you are willing to
pay/bid on a keyword or a keyword phrase.
This is because search engines reward quality ads. The more relevant the ad copy is to the
landing page; the more relevant the ad and lower the advertising cost or CPC.
Let’s first have a look at how search marketing works.
Consider the keyword phrase “Sport shoes in North Sydney”,
for example. The search engines (based
on their individual algorithms) will allocate a quality score to each ad that
wins the bid for this keyword phrase.
The position of the ad is then determined by the bid that you specified
for the keyword multiplied by the Ad’s quality score.
Every search engine has its own algorithm for determining
the quality of ads that are displayed.
Here is an example that explains the basic principle. Every search engine has their own specific
way of ranking ads, however, the basic principles apply to all major search
engines.
Here you can see the different CPC bids that companies A to D were willing to pay for the same keyword phrase “sport shoes in North Sydney”. In this example, company B was given the number 1 Ad position even though, all the other companies were willing to pay more for a click on their ad. This is because:
- Company B won the 1st position because their ad was given a quality score of 9 and when multiplied by the Maximum bid, the result is 27 (which was the highest score for this example)
- 2nd position was given to Company A’s ad. This was because their ad generated the 2nd highest quality score of 20. To determine how much Company B was going to pay for a click, the search engine looked at what the company at the 3rd position was willing to pay. It then lowered the CPC of Company A to $3.99 which is 0.01c lower than what Company B was willing to pay.
- Company D was willing to pay $6.00. Since its quality score was the lowers, the ad was put in the last position.
Hopefully this article has given you a bit of insight into Search Engine Marketing and how to effectively managing PPC campaigns.
At M&a we have a unique approach to managing PPC campaigns with clear and transparent management fees that cover all areas of data driven optimisation including Keyword Research, Ad Design, Bid Management, Reporting and Recommendations. Our approach to PPC strategy begins at the initial stages of briefing where we integrated ultra-specific landing pages into our web builds that are optimised specifically to ROI objectives and specifically to the campaign objective.
Visit us at http://www.mccorkell.com.au/
