We Just Clicked

Disadvantages

Budget Limitations
Because businesses only have so much to spend on their campaigns, they need to set a budget for not only how much they will pay for each click, but also what their daily maximum will be. Because there is a set limit on the money that can be spent, this also limits the amount of exposure the ad will have. Once the daily maximum has been reached, the ad is no longer shown and potential customers could be lost.

For those on limited budgets, this can mean that some of the larger players will gain more exposure because of their financial ability to pay more per click. But having the budget doesn’t necessarily mean becoming number one. It takes patience, determination, creativity, keyword selection and daily analysis to be successful.

Just Looking...
Just because someone clicks on a link, it doesn’t necessarily mean that they will buy. Some people are just doing some research and may click through to see what else is being offered at another spot. It might even be a competitor who is nosey.

Is It Working?

The best way to figure out if CPC is working for a particular business is the acquisition costs - how much does it cost to get a new customer? Basically, identify what the sale is worth: sales price - (cost of goods + overhead) = sale. Keep all CPC costs below this point.

Major Players

The two most successful CPC search engines on the Web are Google and Overture, although there are others.

Google AdWords
There are some keys to producing a great CPC ad in the Google AdWords search engine. Because Google ranks its CPC advertisers on a different scale than the others, it is sometimes difficult to determine who will get the top spot. With Google, the sum of the CPC bid, times the click-through rate, is what determines the number one position.

The key to this engine is to start the bidding high, just to see where the market is. Because Google only shows the top eight spots frequently, it is important to figure out how the search is running. Bids that are too low will not produce a high click-through rate so Google might cancel the ad.

It is also important to monitor the cost for each click, depending on how the ad is performing. For example, if the click-through rate drops, up the CPC for a short time until the business is back in the top range. This will result in some click-throughs and the ad will again be successful, reaching nearly 60 million Web surfers worldwide.

Overture
Through its pioneering advertising campaign, Overture enabled businesses to pick (and pay for) specific keywords so that they could appear in the number one spot for the particular subject. Businesses who join with Overture reach 80 percent of the Internet and the group receives a total of 170 million sales lead each month. Overture’s goal is always to find new ways for customers and businesses to connect online.

In the second quarter of 2003, Overture had facilitated 608 million paid introductions.

Other Keys To Success

The most important thing is to have a plan. Without a plan, the CPC method will never make money. In addition, it is important to utilize the tools offered by search engines when choosing which keywords will be used. Since the most popular keywords are ultimately going to be the most expensive (costs are driven up to get the click-throughs), ROI tracking is very important.

Sourced By: MarketingFind.com

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