PPC Traffic Demystified: Making it Inexpensive and Effective

A couple months ago, I wrote an article about traffic sources. Some folks consider PPC traffic to be an expensive and ineffective way to attract traffic to your site. I disagree. If it is set up well, PPC traffic can actually be less expensive and more effective than any other available traffic source. Let me clarify how PPC works and demystify some of the concerns that surround this type of Web traffic.

What Is PPC Traffic?

PPC traffic is the number of visitors to your website who got there by clicking on a link provided through a paid ad.

When you opt for pay-per-click (PPC) traffic, you act as an advertiser and pay the publisher a certain dollar amount for each visitor you acquire through their site or search engine. The most popular provider of pay-per-click advertising is Google Adwords; however there are other providers such as Bing ads and Facebook advertising.

Myth: PPC Traffic Is Expensive

I’ve said this before, but I will say it again: There is no such thing as free traffic. No matter which traffic source you use, there will always be a direct or indirect cost associated with it. With PPC traffic, you will have direct costs associated with acquiring each visitor. Your price is determined based on the cost per click and the number of clicks you get within a specific time frame.

Cost-per-click rates vary by market and competitiveness. Think of it as an auction. Everyone is trying to reach the top and trying to outbid those around them so they can remain on the top. The more competitive your market is, the more you will pay for each click.

The number of clicks you get is determined by you. You set the budget and you control the number of clicks that you get in your campaigns. Set a daily budget that you are comfortable with. You can spend $400 or $40,000 per month on your pay-per-click campaign—it all depends on your business and your advertising budget. As long as the clicks you get remain profitable, the amount that you spend should not concern you that much.

Here’s why.

You have to understand how these clicks play into the bigger picture. Assume that in your business model, you know that with every 100 clicks, ten people will contact your business and five will become clients.

If you paid $10 for each click you will have spent $1000 for 100 clicks. If each client is worth $1000 in revenue to your business, you will have obtained $5000 worth of business from your $1000 campaign. Assuming that the associated overhead is not too significant, this campaign is a profitable one.

This can work for any size business. You just need to adjust your scale accordingly.

Myth: PPC Traffic Is Ineffective

While it is true that some PPC campaigns are ineffective, they do not need to be. Ineffective PPC campaigns are the result of a bad setup and bad management. There are a number of mistakes you can make that will make your PPC campaign ineffective. The most common are:

  • Mistake #1: Targeting a geography that is too wide. If you have a small business in Schaumburg Illinois and you only serve clients within about a 10 mile radius of your office, you should not advertise in all of Illinois. Sure, you’ll get a lot more clicks if you advertise in a larger geographical zone, but these clicks will not generate a lot of clients.
  • Mistake #2: Focusing too much on broad keywords. Broad keywords allow your ads to show up in a very large number of variations. For example, let’s say you own a roofing company, and bid on the broad keyword “roof repair.” Your ad could show up in online searches for not only “roof repair,” but also for “repair my satellite dish on the roof,” “surgical repair to the roof of the mouth” or even just “roof.” Many business owners end up paying for a number of non-related keyword and doing so results in an ineffective campaign.
  • Mistake #3: Having one ad for all keywords. Different searches will have different user intents. A person who is searching with the words “hail damage siding repair” will be less likely to respond to an ad that says only “Joe’s Roofing Company” on the title than they will to an ad that says “Siding Repair after Hail.” Building different ads for different keywords can keep your campaign from becoming ineffective.
  • Mistake #4: Having Landing Pages that Don’t Match Users’ Intent. Let’s return to the person who is searching for “hail damage siding repair.”  When he clicks on the ad that says “Siding Repair after Hail” he will expect to be taken to a page that says something about hail damage to siding. However, a lot of business owners send their users to the wrong sort of landing page, such as if this user were directed to a page about roofing. This will likely not have any information about siding repair after hail damage and the user will search somewhere else, making your campaign ineffective.

Final Thoughts

PPC can be a very useful traffic channel as long as you have set it up well and manage it correctly. If your campaign is bleeding cash, do not blame the channel, it’s probably failing because of bad management. Remember, there is no such thing as free traffic so you always have to consider the cost of acquiring your clients and weighing them against the potential profitability of your campaigns.

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Tom Bukevicius

Tom Bukevicius (boo-ka-vicious) is a Principal at SCUBE Marketing, E-Commerce marketing agency delivering results through PPC & CRO. Tom’s motto is “Magic bullets are for losers. Execution is key.” Check out Tom’s new SCUBE Rating self-assessment to improve paid search campaign efficiency.