Pay Per Click Marketing:
Make Sure You Understand Your Conversion Rate!

© 2006 John H. Dow

Pay per click advertising seems like a great solution for web site owners looking for highly targeted traffic. You can specify “keywords or phrases” that match your service and product. The only time you pay for the advertising is when someone clicks on your ad and actually goes to your web site.

That’s all true, and a fair description of the advertising method. Keyword research is the first step in the process. Once you establish what keywords might apply, then you will need to expand the keywords into phrases (commonly referred to as long-tail). This process is both an art and a science, and you need to also write a short ad (25 characters for the headline, 35 for the two lines of copy). The ad writing is as important as the keyword research and even more difficult.

All right, you’ve chosen the best keywords, got a good price, wrote a good call to action ad. Now all you do is sit back and wait for the money to roll in when the prospects click on the advertisement. The next day you haven’t seen any sales so you go over to check if your ad is running and see what the stats say. You take a look and see that your advertisement displayed 350 times and got 42 clicks.

You shake your head and say, well at least I’m getting some action. This goes on about the same for the next 5-7 days, you average 2100 displays and about 250 clicks. So that’s 250 views by highly targeted traffic and no sales. Now you figure out the catch 22. Your conversion rate that you based your pay through for the advertising campaign on isn’t proving out. You’ve got a big (read that expense) problem!

And that's what many of the experts don’t tell you. If your sales copy isn’t proven and you don’t know your true conversion rate, then it doesn’t matter how many targeted visitors you get. BTW, the conversion rate is the number of visitors divided by the number of sales (100 visitors and 3 sales gives you a 3% conversion rate). You must know this conversion rate in order to see if the keyword cost will be acceptable (if each click costs you .50, and your product sells for less than $50.00, and you only convert 1 in 100 you will lose money).

So how to do accurately determine the conversion rate? Well, that my good friend is one of the most challenging areas about selling services and products with pay per click advertising. You can’t really launch any kind of sizeable or costly marketing program with out knowing your conversion rate. And due to the popularity and increased cost of pay per click advertising, it can get very expensive to test. But if you can’t get traffic, how do you come up with this mystical figure called the conversion rate?

Well you can use pay per click to test. But I’ve always thought that was a pretty pricey method and sometimes difficult to judge as a strictly conversion or sales test. There are some better ways that are much less expensive and might work better.

The first rule of testing is to make sure you’ve done your research. Do a search on the net for similar products, look at the content of the sales message, pricing, and any promotional material. That will give you some idea for a starting point. Don’t worry about the competition, that’s for later on and it’s actually a good thing to see that someone else is selling the same type of services or products.

For now lets just say that you need to review some similar products and see what methods and copy is being used to sell them. Also look at the pricing and any other pertinent information. Make sure you can target the product or service at a profitable rate and that a market does exist.

First you establish the basics. A product with potential, a well defined the target audience, who's your competition, and how to price your item. I have 3 good places to start that don’t cost a lot of money and have a great diversity in prospects.

1. Number one is eBay. One of the great things about testing on eBay is the traffic and the cost. With so many daily users, ebay is a great source of instant traffic. You can also run a featured auction for around $24. That’s a pretty reasonable cost for some great feedback (no pun intended). Just make sure you pick an accurate category and you feature the auction so as many people will see it as possible. Price is the name of the game on eBay so you might want to choose a lower price just for this test but that’s up to you.

2. Number two is Ezines. They cost a little more but once again you can pick an ezine that lends itself to your product or service. Check out the ezine for readership and subject matter, number of ads per issue, and circulation. Use a classified ad since it will relate well to your Pay per click ads. An easy way to do this is to check out the Directory of Ezines (www.directoryofezines.com ), it’s owned by an old friend of mine, Charlie Page,  who is one of the smartest Internet Marketers I know. And no, I didn’t use my affiliate url like some might but I do believe DOE is a very good place to do ezine research.

3. Number three is writing an article and posting it to some of the major submission sites is also very cheap (mostly free but I’m going to suggest you spend a little on some). Write an article that is along the same lines as your product or service (not an advertisement for your item – don’t do that). You always get a bio or signature block that is perfect for getting some targeted traffic. There are several good article submission sites and you can get on the front page of some for a week for as little as $15.00. I do that often with new articles.

So there are three good and cheap ways to test your sales copy, conversion rate, ad copy, and pricing. And once you get a handle on your conversion rate, these are good sales vehicles for day to day sales. I’ve been using these methods for years and have had excellent results and you can too.

 Free Software

Good Keywords is free Windows software tool from Softnik Technologies for finding the ideal set of keywords for targeting your web pages. Use Good Keywords to find suitable keywords sets, create your meta tags, brainstorm product ideas, etc. This is a great tool for keywords. You can download from this url:

http://www.goodkeywords.com/  

If you want to learn more about Pay Per Click and Google Adwords in particular, I have two ebooks that I recommend. Click here for more: Pay Per Click and Google Adwords Recommendations

Or if you want to have it all done for you, click on the link below.

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