Pay Per Click (PPC) Methodology

Pay per click (PPC) advertising allows you to pay to have your ad listed on the major search engines. They are the sponsored links you might see when you perform a search in a search engine. They usually appear at the top, bottom or right side of the search engine results page (SERP) and are identified as Paid Listings, Sponsored Links, Sponsored Listings, or Featured Listings. Pay per click advertising search engines call for you to pay to have your advertisement listed on the major search engines by allowing you to bid on keywords that are related to your business.

The rank or relative positioning of PPC campaign ads are based on an open bidding system. In this system, advertisers bid to have their advertisement listed. The bid amount is paid by the advertiser when a visitor clicks on the ad; hence, this is also known as a "cost per click" program. These terms are sometimes used interchangeably to describe Pay Per Click Internet advertising even though PPC refers to a payment method and CPC refers to the cost involved in each payment. Theoretically, whoever bids highest gets the highest listed position, although some search engines, such as Google, have made it a little harder by using a formula that bases position on more factors than just your bid. And as more of your competition enters into this developing market, the competition will only become more fierce. Optimizing your PPC search engine marketing campaign will keep you one step ahead of the pack.

To read a more general introduction about the benefits of Pay Per Click search engine advertising, please refer to our PPC overview.

Need More PPC management Help? PPC Overview, Article: Pay Per Click: The Crown Jewel of Search

Step 1: Discovery

As a search engine marketing tactic, there are many things to consider when deciding to launch a pay per click marketing campaign. In addition to resolving just how much of the PPC management, if any, to outsource or manage in-house, some amount of understanding on how they work will be required. A budget of time and money will need to be set and metrics should also be set in place to measure the success (or failure) of your PPC campaign.

A PPC account acts as a great keyword conversion testing ground to determine if your search engine optimization campaign is targeting the right keywords. Run a PPC campaign to see how well your chosen keywords convert. Then, incorporate the best keywords into your search engine optimization (SEO) campaign.

To a large extent, search engine marketing is about identifying the most effective keywords for your web site, and keywords in a PPC campaign are just as important as in an SEO campaign. If you are handling your own pay per click management, you will want to identify your industry's most targeted keywords so that you can eliminate wasted words and increase your chances of gaining conversions. Targeting your ads for the wrong keywords will cause you to miss certain customer groups and decrease your ROI.

So, what is a keyword? A keyword is a word or phrase that people (consumers or businesses) would employ to locate information on the products or services or topic that they are interested learning more about or purchasing.

For example: A mother of seven is interested in purchasing a new type of peanut butter. She turns on her computer and visits her favorite search engine.

In the search box, she enters the keyword peanut butter. In addition, she may also enter chunky peanut butter, creamy peanut butter, or natural peanut butter. Of course, since she is a savvy consumer, certain types of peanut butter are important so she might also enter organic peanut butter, soy butter, or reduced fat peanut butter.

Finally there are different ways to use peanut butter: peanut butter cups, peanut butter cookies, and peanut butter recipes.

The core idea behind keywords for a PPC search engine marketing campaign is identifying the words or phrases that are important to your target audience and therefore will be the most effective to use on your Web site.

Traffic is good, but the bottom line is really conversions. Some questions to consider are:

• What are your long and short term goals?
• How will they be tracked and measured?
• Who is your target audience?
• Do you have any regulatory requirements?
• Do you have any feedback (positive or negative) about the usability of your site?
• Who are your pay per click marketing competitors?
• Have you done research to determine what keywords to target?

The purpose of the this phase is to gain an understanding of the short- and long-term needs, associated issues as they relate to PPC Advertising and determine what keywords will be bid on.

Need Help Getting Started? — Budget Basics, How to Choose Keywords, How To Use Keywords

Step 2: Design

For the creative advertiser, there are a variety of pay advertising models available. Choosing the right one, or ones, to invest in depends on your target audience, your product or service and of course, your budget. From pay per click (PPC) to cost per click (CPC) and the newest pay-per-call, online advertising guarantees you immediate exposure and potential leads. Picking the search engine marketing services that fit best with your goals will help build a PPC campaign that will generate the best results.

The purpose of the Design Phase is to design the pay per click advertising campaign based on the strategy and short-/long-term needs identified in the Discovery Phase and help develop your bidding strategy.

This phase could include:

• Modeling the keywords in terms of monthly counts, estimated click-thru rates, and conversion rates.
• Identifying which PPC Engines will be used for the campaign and any variations in the campaigns by PPC Engine.
• Identifying site landing pages and destination pages for conversion purposes.
• Identifying any tracking and reporting tools.

Unless prior data exists to suggest otherwise, all pay per click Internet advertising campaigns are launched as Exact Matching (sometimes referred to as Standard). In addition we do not advocate Content Match unless data exists to suggest its immediate implementation. "Excluded words" should also be uploaded as well.

Over time, as metrics validate Click-thru and site level conversion, the PPC Advertisement Campaigns can be expanded to Phrase, Broad and then Content Matching. As the PPC Campaigns are expanded, special attention should be paid to the bidding. Usually, Phrase and Broad Matching bids should be lower versus Exact Matching as they are less precise. However, bids could be the same based on the nature of the keyword phrase.

Need Helping Picking a PPC Campaign? — Pay Advertising Models

Step 3: Development

The purpose of the Development Phase is to develop the pay per click marketing campaign as a result of the short- and long-term needs, strategies and campaign design produced in the first three phases. This phase includes converting the audience issues into "creative content statements." Once the creative content statements are finalized, the ads are customized for each PPC Engine to adjust for each engine's constraints, such as the length of the ad, the reach and demographics of the engine, etc., and bidding strategies are developed.

For ad copy to convert readers to visitors, it must grab the reader's attention. Whether it's a print ad in a magazine, a PPC ad on a Web page, or a sponsored listing on a search engine results page (SERP), your message must call out to the person reading it. You may be advertising in the right place at the right time, however, without the right message, you will have a problem. If you're not appealing directly to the person who is reading your ad, you risk them seeing it without realizing how it relates to them.

If the ad is a pay per click (PPC) ad, your potential customer has executed a search and is looking for something specific. If you write your ad to speak directly to them, there's a better chance they will click on it and visit your Web site. So what characteristics do you look to include when writing ad copy?

Step 3 will tell you the importance of creative writing and how to appeal directly to your customers needs to increase traffic and conversions. Remember to emphasize W.I.I.F.M. (What's in it for me?) in your ads. Site level conversion is often influenced by the Landing Page that visitors are directed to when they click on the PPC ad. Site level conversion is supported when the PPC ad is linked to the web page that discusses the subject of the keyword in the ad.

For some keywords it may be best to link the PPC ad to the Home Page. These are often keywords that are general keywords for that market or service. But more often it is best to link the PPC ad to a page that contains targeted information about the subject matter of the keyword AND is action oriented for the visitor (e.g. the page contains a "Buy" button, or a "More Information" link or phone number). In many situations it may even be necessary to develop new Landing Pages to help increase site level conversion.

Conversion Tracking is the most important part of any pay per click advertising program. If you cannot track conversions, you will not know how to measure the success of a PPC Advertising Campaign. Some ways you can track conversions are by using tracking tools offered by the PPC Engines, use 3rd Party tracking tools, develop your own tools or simply use an Excel spreadsheet.

At the conclusion of the Development Phase, you should have:

• Development of Creative (Title and Description) by PPC Engine for each keyword
• Application of tracking URLs and Reporting Tools
• Development of new Destination Pages or editing existing pages
• Implemented Tracking & Reporting Tools

Step 4: Deployment

The purpose of the Deployment Phase is to "launch" and monitor the PPC search engine marketing ampaign as a result of the short and long-term needs. The Deployment Phase begins by uploading (manually or electronically) the PPC advertisements to the PPC Engines. Some pay per click search engines allow advertisements to "go live" almost immediately and others require editorial approval.

Most PPC search engines employ a "pure" bidding model where the highest advertising bid is positioned the highest followed by the next highest bid and so forth. However at least one pay per click search engine employs an "algorithmic rank" based on several factors including the bid multiplied by the previous click-thru of the advertisement. Although seasonality should be considered, often it takes 3-5 business days for approval of the PPC advertisements. Most PPC Engines will send an email alert to indicate when PPC Advertisements have been approved or declined. Nonetheless, it is recommended to login and review the account two times per day when the ads are initially uploaded to check for a change in status.

Where possible, it is recommended that Creative (Title & Description) and subsequent Landing Pages, be modified to maximize Advertisement Click-Thru and then Site Level Conversion. This process is typically referred to as A/B Testing where one advertisement is considered the control and another advertisement is the test. Different aspects of the advertisement can be tested to maximize click-thru rate for that creative.

Similar to Organic Search Engine Optimization, log files should be reviewed for keyword opportunities not initially discovered under PPC. These new keywords should be evaluated and considered for implementation in a PPC Campaign.

Need Help Getting Off the Ground? Importance of Keywords in a PPC Campaign, Writing Effective Ads (Creatives) for Your PPC Campaigns, PPC Analytics