Please Note: You are viewing the unstyled version of MarketingFind.com. Either your browser does not support CSS (Cascading Style Sheets) or it is disabled.
We Just Clicked
What is Cost-Per-Click Advertising?
Cost-per-click advertising (CPC) is one of the most popular forms of advertising on the Web. Created by Overture in June 1998, CPC allows businesses to bid against each other for the top spot on the search engine results page, under a special heading, such as “Sponsored Links”. Also known as pay-per-click advertising, this method provides a win-win situation for all those involved. Consumers access companies that are providing specific products and services. Businesses only pay to reach a targeted audience — one more likely to buy. And search engines providing this service profit every time a link is clicked. Usually, companies that use this form of advertising report positive results, mainly because they are not spending money on advertising that may be reaching non-targeted prospects.
How It Works
Consumers who are looking for something specific, for example Web hosting, go to a search engine and type in their query. Included with the results is a list of “Sponsored Links” (on the right-hand side), which lists companies that offer Web hosting services. Voila! The consumer gets a specific company selling exactly what they are looking for.
The ad appears after businesses create their listing (description and URL); choose keywords (words that apply to the listing); and a bid (amount paid per click). The highest bidder usually moves to the top of the list, however business owners are not charged unless a targeted consumer clicks on the link.
Some believe that remaining the number-one ranked company in the free search engines should be enough, without having to pay for a higher position. However, studies have shown that unless a business appears in the top 10 listings, chances are the consumer will never find it. They will click on those that appear within this frame, and most often will settle for a company’s competitor. That is why having a sponsored link is very important — it ensures that whomever is conducting the search will find the Web site.
Writing Up The Advertisement
There are six things to remember when writing text for a CPC campaign:
Return on Investment
Having Full Control
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.
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.
The two most successful CPC search engines on the Web are Google and Overture, although there are others.
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.
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.