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Making Money The "Click" Way | March 16, 2005
By Paul Lima
PAY-PER-CLICK IS FAST EMERGING AS THE CHOICE FOR ONLINE ADVERTISING
“Click” is slowly replacing “ka-ching” as the sound of transactions in Canada.
Online shopping is still a small fraction of overall consumer spending in Canada, with households shelling out $3 billion on the Internet in 2003, according to Statistics Canada. But that represents a 25 per cent growth rate and sellers want to start scooping up a bigger piece of that market.
So to drive traffic to their Web sites businesses are turning to pay-per-click (PPC) advertising, offered through Google, Overture, FindWhat, Espotting
and a host of other companies.
Unlike banner advertisers, who pay for page impressions (or views) on a cost-perthousand (CPM) basis, PPC advertisers place a small ad on an existing Web page and then pay only when consumers click on their ads. Most PPC programs encourage advertisers to bid against each other for ad positioning on search engines such as Yahoo! and Altavista. The more you bid for the keywords associated with your product or service, the higher your ad is positioned in search results. Google’s PPC program, called AdSense, displays ads to the right of its search results. Google’s results are based on a combination of the
amount paid and ad popularity (the number of times visitors click on it). Design a crummy ad that nobody clicks on and you can watch it sink no matter how much you are willing to pay for each click.
PPC programs also feed ads to participating Web sites that contain content relevant to the PPC advertiser’s keywords.
Some companies that offer PPC are profiting handsomely from it. Google, for instance, posted record third-quarter profits of US$905.9 million, up 1,005 per cent on the year. Almost its entire revenue stream is based on PPC advertising and the behemoth search engine plans to add another 400,000 advertisers over the next four years.
SELLING YOUR COMPANY
That is all fine and well for Google, but what of the businesses that employ PPC?
RinkRake, a Richmond Hill, Ont., company that sells backyard ice rink products, uses search engine optimization (SEO) and PPC strategies to drive
traffic to its Web site. SEO ensures the company’s Web site ranks well in free listings when relevant searches are run, and PPC reinforces those links and serves up the company’s ads. In addition, PPC gave the company exposure in popular search engines before the company’s Web site was indexed (listed).
A PPC campaign can be running within days on Overture and within hours on Google. By comparison, it can take an SEO campaign three months to gather
momentum as search engines have to find and index Web sites before they show up in listings, said Aaron Wolski, project manager with Martek Business Solutions, the company that implemented the RinkRake PPC campaign.
“Pay-per-click is the ideal way for RinkRake to get its message out while paying only for qualified leads,” Wolski said.
Of those visitors who click on RinkRake’s PPC ads, three to four per cent purchase products — better results than typical direct-mail campaigns and at a fraction of the cost, he said.
To maximize results, PPC advertisers should closely monitor campaigns, Wolski said. The major PPC players provide advertisers with tools that report
ad impressions (number of times ads are displayed), click-throughs and clickthrough-rate (ratio of click-throughs to page impressions), and sales. It is up to the advertiser to monitor results. Make changes to keywords, ad copy and Web site copy and continue to monitor results, Wolski said. “Work [your campaign] until you find the combination of keywords, ad copy and Web page content that produces maximum results.”
PPC advertisers can test several ads and several sets of keywords as they monitor results, said Stephanie Hetu, president of EGenese, based in Laval, Que. Her company does SEO and PPC consulting and Hetu uses PPC to drive traffic to http://www.cutepuppydog.com, a Web site for dog owners that she runs. Visitors to her site can sign up for a pet care newsletter or purchase “deluxe dog products.” Also, Hetu has Google ads on her site and when they are clicked part of the fee lands in her bank account.
HOW TO CLOSE SALES
When launched, Cute Puppy received 40,000 visitors in six days using Google PPC ads, Hetu said. It generates a PPC click-through rate (the ratio of impressions to clicks) of up to 20 per cent.
Click-throughs, however, do not necessarily generate sales because many PPC campaigns break down after prospective customers click through.
Effective PPC campaigns can drive traffic to a Web site, but the site has to close the sale, Hetu and Wolski said.
One problem is many companies direct PPC visitors to a home page filled with too many navigation options, Hetu said. Instead, they should direct traffic
to a sales letter or direct marketing page that captures the interest of the visitor, builds trust, sells the benefits of the product, offers guarantees and “leads to a buy button.”
Wolski concurred. “Ask for the order.
A lot of sites don’t.” PPC ads should direct visitors to a teaser page that anticipates and answers questions about the product and leads to the close, a page with pricing, buy-now incentives, how-to-order information and a final reminder of any guarantees or warranties.
PPC sales may also fall flat if there are no payment options, Wolski said. Most online visitors are willing to use their credit cards online, as long as the deal takes place through a secure transaction environment.
However, some customers want alternatives: a toll-free number or a mail-order address. “The more methods of payment, the merrier, but each one costs the merchant and those expenses have to be built into the price of the product,” he said.
Speaking of pricing, Wolski reminds merchants to build costs into their pricing, as PPC fees add up. If an ad generates 100 clicks at $0.20 per click, that’s $20 in marketing that has to be counted. If 100 clicks lead to two sales, on average, that’s $10 per sale that has to be built into the price of the product.
Some companies become fixated on having their ad ranked first and get caught up in PPC bidding wars, Hetu said. Instead of blowing the budget on a number-one listing, she advises companies to look at the price of the number three placement and bid a penny more. “In PPC, coming in second can be just as effective and far more cost-effective that coming in first,” she said.
Web PPC
Google AdSense http://www.google.com/adsense
Martek http://www.martekbiz.com
Overture http://www.overture.com
RinkRake http://www.rinkrake.com
PAY-PER-CLICK IS FAST EMERGING AS THE CHOICE FOR ONLINE ADVERTISING
“Click” is slowly replacing “ka-ching” as the sound of transactions in Canada.
Online shopping is still a small fraction of overall consumer spending in Canada, with households shelling out $3 billion on the Internet in 2003, according to Statistics Canada. But that represents a 25 per cent growth rate and sellers want to start scooping up a bigger piece of that market.
So to drive traffic to their Web sites businesses are turning to pay-per-click (PPC) advertising, offered through Google, Overture, FindWhat, Espotting
and a host of other companies.
Unlike banner advertisers, who pay for page impressions (or views) on a cost-perthousand (CPM) basis, PPC advertisers place a small ad on an existing Web page and then pay only when consumers click on their ads. Most PPC programs encourage advertisers to bid against each other for ad positioning on search engines such as Yahoo! and Altavista. The more you bid for the keywords associated with your product or service, the higher your ad is positioned in search results. Google’s PPC program, called AdSense, displays ads to the right of its search results. Google’s results are based on a combination of the
amount paid and ad popularity (the number of times visitors click on it). Design a crummy ad that nobody clicks on and you can watch it sink no matter how much you are willing to pay for each click.
PPC programs also feed ads to participating Web sites that contain content relevant to the PPC advertiser’s keywords.
Some companies that offer PPC are profiting handsomely from it. Google, for instance, posted record third-quarter profits of US$905.9 million, up 1,005 per cent on the year. Almost its entire revenue stream is based on PPC advertising and the behemoth search engine plans to add another 400,000 advertisers over the next four years.
SELLING YOUR COMPANY
That is all fine and well for Google, but what of the businesses that employ PPC?
RinkRake, a Richmond Hill, Ont., company that sells backyard ice rink products, uses search engine optimization (SEO) and PPC strategies to drive
traffic to its Web site. SEO ensures the company’s Web site ranks well in free listings when relevant searches are run, and PPC reinforces those links and serves up the company’s ads. In addition, PPC gave the company exposure in popular search engines before the company’s Web site was indexed (listed).
A PPC campaign can be running within days on Overture and within hours on Google. By comparison, it can take an SEO campaign three months to gather
momentum as search engines have to find and index Web sites before they show up in listings, said Aaron Wolski, project manager with Martek Business Solutions, the company that implemented the RinkRake PPC campaign.
“Pay-per-click is the ideal way for RinkRake to get its message out while paying only for qualified leads,” Wolski said.
Of those visitors who click on RinkRake’s PPC ads, three to four per cent purchase products — better results than typical direct-mail campaigns and at a fraction of the cost, he said.
To maximize results, PPC advertisers should closely monitor campaigns, Wolski said. The major PPC players provide advertisers with tools that report
ad impressions (number of times ads are displayed), click-throughs and clickthrough-rate (ratio of click-throughs to page impressions), and sales. It is up to the advertiser to monitor results. Make changes to keywords, ad copy and Web site copy and continue to monitor results, Wolski said. “Work [your campaign] until you find the combination of keywords, ad copy and Web page content that produces maximum results.”
PPC advertisers can test several ads and several sets of keywords as they monitor results, said Stephanie Hetu, president of EGenese, based in Laval, Que. Her company does SEO and PPC consulting and Hetu uses PPC to drive traffic to http://www.cutepuppydog.com, a Web site for dog owners that she runs. Visitors to her site can sign up for a pet care newsletter or purchase “deluxe dog products.” Also, Hetu has Google ads on her site and when they are clicked part of the fee lands in her bank account.
HOW TO CLOSE SALES
When launched, Cute Puppy received 40,000 visitors in six days using Google PPC ads, Hetu said. It generates a PPC click-through rate (the ratio of impressions to clicks) of up to 20 per cent.
Click-throughs, however, do not necessarily generate sales because many PPC campaigns break down after prospective customers click through.
Effective PPC campaigns can drive traffic to a Web site, but the site has to close the sale, Hetu and Wolski said.
One problem is many companies direct PPC visitors to a home page filled with too many navigation options, Hetu said. Instead, they should direct traffic
to a sales letter or direct marketing page that captures the interest of the visitor, builds trust, sells the benefits of the product, offers guarantees and “leads to a buy button.”
Wolski concurred. “Ask for the order.
A lot of sites don’t.” PPC ads should direct visitors to a teaser page that anticipates and answers questions about the product and leads to the close, a page with pricing, buy-now incentives, how-to-order information and a final reminder of any guarantees or warranties.
PPC sales may also fall flat if there are no payment options, Wolski said. Most online visitors are willing to use their credit cards online, as long as the deal takes place through a secure transaction environment.
However, some customers want alternatives: a toll-free number or a mail-order address. “The more methods of payment, the merrier, but each one costs the merchant and those expenses have to be built into the price of the product,” he said.
Speaking of pricing, Wolski reminds merchants to build costs into their pricing, as PPC fees add up. If an ad generates 100 clicks at $0.20 per click, that’s $20 in marketing that has to be counted. If 100 clicks lead to two sales, on average, that’s $10 per sale that has to be built into the price of the product.
Some companies become fixated on having their ad ranked first and get caught up in PPC bidding wars, Hetu said. Instead of blowing the budget on a number-one listing, she advises companies to look at the price of the number three placement and bid a penny more. “In PPC, coming in second can be just as effective and far more cost-effective that coming in first,” she said.
Web PPC
Google AdSense http://www.google.com/adsense
Martek http://www.martekbiz.com
Overture http://www.overture.com
RinkRake http://www.rinkrake.com
