PPC for Newbies
Posted by acehain on Sep 21, 2007
Sponsored Links: First off, PPC stands for pay-per-click. It refers to using the sponsored links found on search engines such as Google, Yahoo and MSN. These appear as the very first 2 results on Google and all the search results found on the right column.
See below:
In order to be found in this section, you basically have to setup an account with Google (Google AdWords), Yahoo (Overture) or MSN and you have to bid on key terms that you’d like your website to be found under. For example, if you are a Realtor specializing in Las Vegas, you might want to use terms like: Las Vegas homes, Las Vegas property, las vegas real estate, etc.
How it works:
Each key term has a current bid amount which determines your position in the sponsored links section. You can then decide how high up you’d like to be ranked based on your budget. Each time a search is made and your site appears as one of the sponsored links, is called an impression. These do not cost you any money but are worth looking into statistically to determine the effectiveness of your campaign. If someone clicks on your link, they are taken to the page on your website that you have linked it to and your account is debited with the amount you had bid for that term. This is referred to as the cost-per-click (CPC). You can set a budget each day and for the month and as soon as your budget for the day is depleted, you will cease to be found in the sponsored search results for that day unless you decide to reallocate more funds to your daily budget.
Ok, that may have been a bit of a mouthful to digest so let’s break it down and illustrate it:
You: a Las Vegas Realtor specializing in new home construction in Summerlin, Henderson and Las Vegas.
Your possible key terms: las vegas homes, new las vegas homes, summerlin property, henderson property, plus maybe about 70 other variations that are related.
For the sake of simplicity, let’s just focus on Google since it’s technically a verb and let’s only take into account 1 key term – “new las vegas homes”.
Your budget: $900/ month set at $30/day. That’s a lot of cash but that’s ok because Vegas is hot right now and you’re so money you don’t even know it. Let’s assume that you’re running your campaign 7 days a week because you believe that the market’s so hot right now that people are searching even on weekends instead of going to church or watching college football.
Let’s also assume that as of today, at this hour, the current cost per click for this key term is $3.00. That means, the person sitting at #1 is paying $2.75 every time someone does a search for “new las vegas homes” on Google, AND clicks on their link (which is sitting at #1 in the sponsored links section). The guy ranked at #2 has bid $2.50 and the third guy bid $2.35.
So here’s the guy at #1 at $3.00 CPC and here’s you – and you decide that this key term is so relevant to you that YOU want to be ranked #1 for the next few hours. So you access your AdWords account, set “new las vegas homes” to $2.76 to see if you’re now the new #1. Well, the guy in #1 is smarter than that and has set his campaign so that he’s bidding at a maximum of $2.99 to be in #1. You conveniently adjust your bid to $3.00 and hope that nobody else bids or it’ll make this example a little more painful to illustrate.
Congratulations, you’re now #1 at $3.00 CPC. So far so good… now watch the fish come to you!
As the day goes, and people Google (see how I used it as a verb?) “new las vegas homes” — some of them will immediately find out that your site is exactly what they are looking for and will click it and will be taken directly to a page on your site, maybe your properties page, maybe your homepage, maybe your MLS. That’s cost you $3.00. So your account is now down to $27 for the day and you’ve got maybe about 9 more clicks to go.
A couple of things to note at this point:
- If someone outbids your maximum bid, you slide down to #2 at your lowest bid for as long as your lowest bid is still higher than the guy in #3 (your lowest bid was $3.00 and the guy in #3’s highest bid was $2.50). If the guy in #1 has depleted his budget for the day, then he drops off the face of Google and you’re back in #1, if you’ve still got some cash left in your daily budget. You can also raise your bid if you still want to be #1 though in certain cases this is overkill.
- What happens, you ask – if your competitor is a douchebag and basically clicks on your site, goes back to Google, searches the same key term and clicks on your site again just to kick you out? Well, the eggheads at Google have thought about that too and have basically made sure that if someone from the same IP address clicks on the same sponsored link in the same day – then it won’t count as double. Further simplified – you only get charged once for that click despite it being clicked on multiply times from the same computer from the same IP address.
So the day goes on and about 9 other people click onto your site and your remaining $27.00 is done. Your budget is depleted for the day and you sir, are no longer on the sponsored links for that day. The person who was next in the bidding war takes your place. Hopefully the 10 unique people (or IP addresses) that have clicked onto your site have found what they were looking for and hopefully, have generated you some business.
That’s the basic idea – but now multiply that over the multiple keywords that you’ve got and you get a full-blown PPC campaign. The control panels for managing campaigns like this typically allow you to set your daily budget across the board for the entire campaign. They also allow you to globally monitor the status of each key word in terms of positioning, which allows you to determine which key term you’d like higher than the other.
All in all, while PPC may seem to be a costly and quite laborious endeavor to undertake in order to gain traffic and rankings – it is quite effective if managed and utilized to its potential. I like to compare it to maybe using drugs, minus any of the negative effects other than cost in that – the effects are near-instantaneous and continue as long as you are using the ‘drug’.
One thing I forgot to mention as well is that the control panels for these campaigns provide you with a host of statistics in order to gage how effective your campaign is going. Usually you’ll be looking at the number of impressions you’ve gotten (again, an impression is when your site has come up in a search as a sponsored link). If you find that you’re getting a lot of impressions but not enough visitors to your site, it’s possible that you’re either not being descriptive enough for your keyword or link, or that you might be bidding on the wrong keyword.
Below are some really helpful tips for efficiently and effectively managing a PPC campaign:
- Keyword Selection. Choose less competitive keywords by going geo-specific. General terms like “mortgage” are going to be incredibly expensive (I’ve seen that term go for as high as $13/CPC and even higher). By going more specific (i.e. ‘reno mortgage loans’ or ‘calabasas home loan’ are going to be less expensive than just ‘mortgage’ or ‘home loan’) you are effectively narrowing the list of competitors for your key terms. Essentially you are bidding against your competitors in the industry and unless you’re a big corporate machine with the budget to spare – you’re going to need to pick your battles.
- Proper Positioning. It isn’t always worth it to be #1. I can tell you honestly that, as a user of search engines, I only find that the top sponsored link is what I’m looking for about 40% of the time. 60% of the time I find what I’m looking for in positions #2-6 on sponsored and on natural (natural is everything that I didn’t mark in RED in the screenshot above. Choose your battles. Pick your most relevant key terms and determine what position you’d need to place them in. This will be based on the cost-per-click of these terms as well as your established daily budget.
- Do Thy Research. When establishing a budget for your PPC marketing, take into consideration the business you’re in and determine whether your campaign needs to run 4,5 or 7 days a week. Someone who sells office supplies will most likely need to advertise only during work hours as I would think it to be rare for someone to look for great office deals on a weekend. I could be wrong though for this example, but you get the idea. Figure out how much money you have to dedicate to PPC based on the cost of the keywords you’ve selected. Managing a PPC campaign effectively is a balancing act of selecting the right keywords (in some cases, the more the merrier but in others, having a focused set of keywords placed up top is more than enough), positioning them correctly, and ultimately being able to convert the traffic you’re sending yourself.
- Every Trip needs a Destination. When you setup a link from your PPC campaign – where are you driving the traffic? Are you sending people to your homepage with the 10 second flash intro? Are you sending them directly to your property listings? Are you sending them directly into your MLS where they can do a search and then not call you? One really effective means to maximize traffic I’ve learned in my previous job is to send people to a page on your site that provides relevant information to what they’ve searched for and then providing a means for them to give you their information (lead capture). With PPC, assuming you’ve done steps 1-3 correctly, in a perfect world – the only people who should be finding your site are the people who are looking exactly for what you’ve got to offer. By directing traffic to a page that whets enough of their appetite and then asks them for their information, you’ve converted your traffic into a lead which is the overall goal.
Another great idea is to combine PPC with a service that some IDX providers are able to offer which allows a user to do a search on the MLS, displays the results, but… prior to clicking into t he details of the property, asks the user to provide information to the site administrator. You’ll find that people, in general, will dance with you once you’ve earned their trust – and what better way to do that than by offering them the right amount of information. Quid pro quo, as they say.
- Leads Need Love. Now, just because you’ve got traffic and great leads, it doesn’t mean that you’ve actually sold something and have made money. You’ve got to continue to build off of the trust you’ve just earned by constantly following-up and providing information to your lead.
So, in closing… is PPC the right thing for you? Maybe, maybe not. But let me tell you that it works if you do it correctly. Also, let me say that it is a lot easier than how I may have made it appear to be. Once you see the control panel and the tools, you’ll get a better feel for it. Services like Google’s AdWords provide a LOT of tutorials and guides on how to use their tools. And we’re also here to answer any of your questions as well.