The efficiency of any program, plan or campaign is known by the results it achieves. The result of a PPC advertising campaign would be to increase the sales of the products/services it advertises. It is said in Quality Management, If it cant be measured, it cant be achieved. So the advertiser would have to measure the results to know the success of his program and therefore to take actions based on that.
The goals of an advertisement can be increased number of customers, higher dollar value of sales, requests to subscription of a service or just sharing personal data. The advertiser should be clear about the goals he/she sets out to achieve. Properly articulated goals, followed by well-crafted advertising campaign and periodic measurement of the result would complete the loop of an advertising campaign.
The metrics for measurement are Return-on-Investment (ROI) at the business level, cost per acquisition (CPA) and click-thru-rate (CTR). ROI measures the returns on the advertising budget; CPA measures the cost of converting a viewer/user to a customer; and CTR measures the number of visitors to the website. With increasing bidding prices for keywords, along with the heightened competition to remain at the same ranking, the numbers derived from these metrics become significant for the advertiser to take action upon modifying the campaign, etc.
There are software tools available to track the number of visitors clicking through. ROI and CPA can be measured from the actual sales figures and the advertising dollars spent. A word of caution to the advertisers: it would be myopic to look just at the numbers and miss the whole picture. For instance, a high click-thru-rate may be due to various reasons like fraud, etc and hence CTR has to be correlated to other metrics like CPA and ROI in order to get the real meaning.
With an average online conversion rate of around 2%, an online advertiser has to tightly utilize budget by continuously taking action on the measurements without which, the advertisement would be pulled off the portal where it is hosted, resulting in the loss of business.
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A limited resource seems to constrain, but provides opportunities to optimize the resource by effective application. Hence a PPC advertising campaign, with its limited budget, demands proper allocation of resources by different means. Measurement of the metrics like ROI, CPA and CTR indicate the direction and allows efficient allocation of the resource.
Optimization can be done by finding the websites and search portals that reaches out to most users, bidding for the maximum number of combination of keywords and design of the contents of the advertisements and websites. There are many search portals (classified as Tier1 and Tier 2 according to the number of searches done through the portals) and other websites providing PPC services. The strategy is to find the relevant sites according to the number of visitors, relevance to the products/services and other criteria. Getting hosted by a website whose products/services are very related might be effective, for instance, home remodeling and carpets may be related as the chances of someone going to remodel his/her home would also be looking for carpets are high.
Bidding for the right, maximum number of keywords is another optimizing tool. The strategy is to find niche keywords, for which the bidding price is less and the number of searches also less, but the click-thru-rates may be high.
The third optimization tool is the design of the contents of the advertisement and website. Currently, there are static advertisements, which dont change. Software is being developed to make the advertisements dynamic, i.e. the title would reflect the keywords typed by an online user making him/her wonder that there is a website that exactly matches the need. Further the click should lead the user to a landing page where he/she can find all the information about the product and also prompt him/her to take action, by requesting more information.
Designing of the website is another aspect that is not to be overlooked. It should be easily navigable, provide enough information and an easy way to take action, i.e. the buying experience should be comfortable.
Optimizing involves constant tracking of the metrics and also taking action by changing the design of the advertisement, website, bidding price, etc.
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