Pay Per Click marketing can be one of the most effective tools available and when utilized correctly it can be a critical part of your success. On the other side of the coin, if a PPC campaign is mismanaged it can be one of the fastest ways to watch your marketing funds literally vanish into thin air. It’s also prudent to mention that if your website makes a bad first impression, then that is a significant problem in itself, and a PPC campaign will only multiply the negative effects. This is why we generally recommend that you work out all the bugs in your design and media before you move into Pay Per Click marketing. It’s extremely important to understand that PPC is a tedious game of numbers and a small difference in your customer conversion ratio could seriously compromise the efficacy of the entire program.
Let’s take a look at a simple example. If you pay $1 per click to send a potential customer to your website and 100 people click through in a given week, then you just spent $100 to send 100 people to your website. You have already calculated that, on average, each new customer generates a $25 profit for your business in the first year. Now, you can probably see that if 4/100 people who visit your website become customers then you will roughly break even in the first year. This is not very exciting and keep in mind that if any less than 4/100 clicks convert to paying customers, then you will be losing money, at least in the first year.
On the other hand, if 10/100 people who visit your website become a new customer then you will make $250 in the first year. You only spent $100, and so your profit is $150, or 150%, which most businesses would consider an acceptable return on their investment. This is an overly simplistic model of course, but it illustrates how important it is that your website makes a good first impression.
Another major factor when operating a PPC campaign is the actual cost per click that you can afford to pay. You can probably see how a varying cost per click would drastically affect the scenario above. These are just two variables out of many more that need to be taken into account when planning a successful PPC campaign. Fortunately, we have the experience and expertise to make a big difference in your Pay Per Click marketing campaign and we are here to help.