Is Your Paid Search Advertising Generating Positive Financial Results?
In the last few years pay per click marketing has become a favorite marketing tool of several businessmen across the world. This is because a perfectly executed pay per click advertising campaign can get results very quickly at low to medium costs to the organization. Hence you should always keep the general rule in mind when you are starting a pay per click advertising campaign and that is you should pay for performance.
Research shows that today more than half the people across the world use search engines to look for products and services. In fact paid searches constitute up to 87% of the search market revenues in the US alone and this percentage is rising in other countries also. Hence it becomes very important for advertisers to gauge whether their pay per click marketing campaign is cost effective and whether it is working in their favor or not. The other question is whether enough sales generated against the money spent on advertising.
We can find the answers to the above questions if we take into consideration the two most important performance factors and these are the click through rate and the website conversion. The click through rate can be defined as the percentage of times that search ad is clicked by the visitors divided by the number of times the ad is actually viewed by the user in a given period of time. Hence if your search ad is viewed by 10 users but only one user clicks on it to view it, then the click through rate is 10 percent.
However many advertisers feel that so long as they achieve a high click through rate their goal is achieved. However these advertisers don’t know the fact that they are paying for clicks though the visitors are just viewing their ads and going away. The viewers are not getting converted into customers who will actually buy the advertiser’s products.
Hence most of the advertisers today refer to the most important performance factor of their pay per click advertising campaign and that is website conversion rate. The website conversion rate refers to the percentage of visitors who have actually bought your product (and become your buyers) divided the number of time they have clicked your ads. Hence the main aim of all businesses would be to generate as much sales as possible.
So we conclude the assumption that more traffic to your website achieves more results does not hold true. Success of the organization should be measured by the sales and the profits that the organization achieves by the end of the day.
Let’s take another example to strengthen our claim mentioned above. On one hand a business has a 20% click through rate but there are zero sales. On the other hand there is another business that has a click through rate of just 0.2% but it generates 10 sales. Obviously the performance of the second business in terms of sales is better of than the first business.
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