Pay Per Click FAQ

How does pay per click work?

Pay per click works like a word auction. We bid for the words and phrases that are relevant and you pay the bid price only when someone having searched for one of your words or phrases clicks on your listing in the search engines and gets to your web site. Generally speaking the higher the bid the higher position achieved though other factors such as Ad quality and landing pages affect position.

How does paid search differ from natural search?

The primary differences are:

• Paid search can be launched quickly. Natural search generally takes months to show a return.
• Paid search focuses on a large number of keywords. Natural search needs to be focused on a few high-return keywords.
• Paid search is highly measurable. Tracking results on natural search is more difficult (although not impossible).

Isn't paid search expensive?

Poorly managed, paid search can be very expensive. Properly managed, it can be a goldmine. Most critical is that the results are carefully tracked, and that the data received from tracking is used to optimize the advertising.

How long will it take to receive results?

Once the accounts are created and activated, traffic should be received by the website within hours, if not minutes. Generally, traffic will ramp up over the first few days of the campaign.

How many keywords can I bid on?

We will advertise on as many keywords as are necessary to adequately cover your particular marketspace. We would generally prefer to have too many keywords, rather than too few.

What about click fraud?

Click fraud is a legitimate problem with paid search advertising. The major paid search engines have technologies in place to prevent click fraud, but they do not always work. We closely monitor our paid search accounts for suspicious behavior. This often results in a credit being made to the account by the search engine.

How do you calculate bid limits?

The formula for calculating bid limits is as follows:

Transaction Value x Conversion Rate x Advertising Percentage

Transaction Value represents the value of the online transaction. For instance, if you are selling widgets for $100, and your cost of goods is $60, the value of a transaction is $40. If the site is collecting leads, you need to determine what a lead is worth.

Conversion Rate is the percentage of website visitors that submit a transaction. If 200 people come in on a particular keyword, and ten of them submit lead forms, the conversion rate is 5%.

Advertising Percentage is a strategic decision as to how much of the value generated by a transaction should be allocated towards discretionary advertising spend.

As an example, let's say you have a transaction that you determine to be worth $100. For a particular keyword, the conversion rate is 4%. You're looking to grow as quickly as possible, so you set the advertising percentage as 50%.

The formula would be:

$100 x 4% x 50%

For a bid limit of $2.00 per click.

Bid limits should be calculated on a keyword by keyword basis, as the conversion rate (and sometimes the transaction value) can vary greatly from one keyword to the next.