PPC Conversion

Cost per click vs conversion

Cost Per Click (CPC) vs Conversion

What is Cost Per Click (CPC)?

Cost Per Click or Pay per Click (CPC or PPC) advertising is one of the best method of electronic marketing and is used much more widely by all advertisers than other methods like banners and theme link building. The main difference between banner advertisements and CPC is that you do not get charged per ad or in a lump sum, but only when a visitor clicks on the advertisement and is lead to a landing page on your website. You are able to decide on the Cost per Click using keywords and competitive rates, and can analyse the visitors based on the click-through rates. So when a visitor clicks on your advertisement, you are charged - that is the basic meaning behind CPC advertising.

There are various CPC advertising programs to choose from - the most common ones are from Google AdWords and Bing adCenter. Yahoo! folded recently and merged with Bing. Google Ads will be shown on Google Search Pages, partner sites like AOL, and other AdSense Publisher Websites.

CPC Budgets:

CPC price is simply the cost or fees you pay for the whole campaign to a website marketing company. As an advertiser you can set a monthly budget, daily budget, and also the maximum cost per click by keyword. Budgets generally range from $50 per month to $500,000 per month or more.

CPC Campaigns are conducted similar to auctions, where you place a bid for the search terms and your ad is displayed in the sponsored results column or advertisement panel by the Search Engine depending on your bid and others bids. Ads with higher bids are shown at the top of sponsored results. Google also takes into consideration the amount of click-throughs your advertisement is expected to generate, which in turn affects the total associated revenue.  Ads with the best revenue are placed at the top of the page.

Advantages of CPC:

CPC advertising does more than simply create traffic volumes for your website. If effectively managed, it puts the search engines to work for you and creates an effective brand image for you. It can dramatically increase the number of quality visitors, which increases the sale and re-sale elements. Effective CPC campaigns can lead to the following benefits:
* Instant increase in traffic volume
* Immediate results in terms of sale
* Need to pay only for performance
* Absolute control over your ad campaign and costs
* Flexibility in running the CPC campaign
* Helps in creating a brand image
* Search Results Page domination

In recent times, CPC or PPC campaigns have been very effective in bringing in new customers, so the advertising costs also have gone up, based on the keywords. Common and popular keywords cancost a fortune for better rankings now days. You have to look for alternate keywords with just the right price for your campaigns. Most keywords' CPC starts at $0.05 and goes beyond $4.00 per click. High value clicks have to be monitored, tracked and analysed continuously so as to avoid detrimental effects on the advertiser. This leads to a new concept called Conversion Tracking and Analysing.

CPC and Conversion into Actual Leads:

A conversion is a simple process where a click on your ad has led directly to a valuable step like a purchase, signup, phone call, form completion, membership registration, newsletter subscription or download of trial software. Such events can be clearly measured by tweaking your webpage code a little bit, for which Google Adwords give you ample support. Earlier, all advertisers were bothered about just the traffic. However, recently people have realised the importance of conversion rates and now most CPC campaigns are always followed on by a conversion tracking. The nature of conversion is different for each business, but the common philosophy is that a conversion occurs only when a visitor has clicked on the advertisement and followed it through with what the advertiser desires them to do on the landing page.

The conversion rate of a website is the ratio of visitors who convert simple views into desired actions. The mathematical formula is:
Conversion rate = Number of Goals Achieved / Total number of visits

If you are planning to run a CPC campaign, keep these points in mind before you start on your online marketing:

* Optimized Landing Pages - take visitors to a page optimized specifically for conversion, like 'Buy Now'.
* Ad Placement - analyse keywords, online value, and placement ranks continuously. Top ranks can inflate unwanted costs to your CPC rates. In some cases, placing second or third will bring the same number of visitors but will reduce your campaign costs a lot.
* Google Quality Scores - Every CPC & PPC campaign is assigned a quality score by Google based on your Ad quality, the quality of visitors clicking on your ads, quality of the substance in your landing page, time spent by the visitor and finally whether they are converting or not. With good quality scores, your ad will be placed better irrespective of the CPC bid.
* Return On Investment - plan your ROI ahead of your CPC bid, lower ROI for High CPC campaigns can ruin the logic.

Conversion rate optimization is a step by step procedure meant to increase the percentage of visitors who convert into customers. Instead of increasing the bid cost infinitely for high cost keywords, you can concentrate on making your website more persuasive which increases the ROI from your PPC campaigns. Conversion rate optimization makes your website more customer-friendly, which leads to more happy visitors. Optimization helps in reaping the benefits of CPC campaigns for even longer periods by generating loyalty.

Best utilization of CPC Campaigns:

There are multiple things to do to best utilize your CPC campaign:
* Post-click conversion optimization
* Inflate expectations in your ad copy and live up to the hype
* Insert the visitor search terms into landing pages dynamically
* Keep the most relevant product options on top
* Reduce your site pages to fit into their screen
* Remove or take down less relevant content and navigation choices.
* Treat the visitor like a shopper and provide relevant shopping tools
* Use retargeting campaigns with motivational messages and tag visitors using AdWords.
* Start thinking more about mobile shoppers

The better your conversion rates are, the lower your CPC bids would be, and the faster your income and profits will increase. Address both the pre-click and post-click factors of your CPC campaign for effective conversions. Without conversions, any CPC advertising campaign is useless.