Thursday, April 19, 2007

Go where the eyeballs are

posted by Andy Leff
Yes, eyeballs are in your head. But they're also on the Web. And no one knows this better than advertisers.

Online advertising is growing by leaps and bounds. It's already a multibillion dollar industry, and expanding at double-digit rates every year.

The reason, of course, is that everyone is online these days. They're either blogging, chatting, meeting people, searching for information, conducting business, shopping, and whatever else people like to do with their computers and an Internet connection.

And like loyal bloodhounds, advertisers follow. Then more advertisers pick up the scent, and so on. This means businesses that don't advertise online will struggle to make profits while their competition -- who uses the Internet to market -- slowly steals away their market share.

But don't freak out yet. I have a three-letter answer: "PPC."

They stand for pay-per-click, the most efficient, easiest, and popular way to advertise online these days.

In order to get started with a PPC advertising campaign, you have to understand exactly what it is, and how to budget for it. (Refer to my post on SEO, as some of these ideas overlap.)

In a nutshell, PPC is keyword advertising. You know the list of "sponsored links" that appears on the side of your screen when you do a Google search? Those are PPC ads. You might see PPC ads on other search engines, too, such as Yahoo! and MSN.

That's the short explanation. The more detailed explanation can get a bit complicated, so stay with me here. Advertisers bid on keywords they think people would type when searching for them, their competitors, or information related to their business.

For example, a real estate lawyer would bid on keywords such as "real estate lawyer" or "real estate law." Other real estate lawyers are probably bidding on the same words.

Then when someone searches for a keyword, ads by the top five to 10 advertisers that won the bidding on that keyword appear on the search results page. The ads are ranked by the amount of the bid, with the highest bidders landing on top.

When people click the ad, they're taken to the advertiser's Web site. The advertiser pays the keyword bid price when someone clicks their ad.

Here's where PPC can get expensive. Some top keywords might go for up to $15 a click, while others for pennies. It all depends on the popularity of the keyword ("real estate lawyer" would be more expensive than, say, "condominium lawyer in Philadelphia"), and where your ad falls on the sponsored link list.

But even something that sounds cheap, like 25 cents, can actually get quite expensive. Here’s how:

1. Your keyword makes the top of the list for a quarter.
2. You ad shows up every time someone searches Google with that keyword.
3. Google gets millions of page views a day.
4. Millions of people can potentially see your ad.
5. They click it, and you get charged a quarter each time.
6. Before you know it, you owe Google thousands of dollars.

This might not be bad if you have the budget for it, but you have to make sure you can effectively calculate your ROI. PPC ads work best if you have a product for sale directly on your page. It's easy to track how many clicks you got, and then how many sales occurred in a time period.

However, if you're a service-based company, people might just click to your site, surf around and not use you. You're still charged for the click, making it much harder to calculate your ROI.

Also something to keep in mind: When you buy PPC ad space, you have to create your own ads. Whether it's coming up with unique copy for your text-based ad, or making a flash-based ad, the time and money investment is yours.

There are companies that can assist in developing ad copy for you, but this can get expensive, too. If you use one, you're not just paying for the clicks, but also the creation of your ad. That needs to be factored into your ROI as well.

So where do you go from here? I'm all typed-out for now, so that, my fellow bloggers, is the story of tomorrow! Check back then for my advice on developing an effective PPC campaign.

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