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Pay Per Click Marketing - Make Sure You Know Your Conversion Rate!
By John Dow
Looking from 50,000 feet, Pay per click advertising seems like the perfect solution for web site owners looking for targeted traffic. You can target "keywords" that match your service and product. The only time you pay for the advertising is when someone clicks on your ad and goes to your web site to take a look.
That's all true, and a fair description of the process. Figuring out the proper keywords and finding them at the right price is somewhat challenging, but can be done with a little research. The process is both an art and science since you need to also write a short ad (25 characters for the headline, 35 for the two lines of copy).
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 is what you based your pay through for the advertising campaign on isn't proving out. You've got a problem!
And that is what they 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 pay through (example: 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 friend is one of the most challenging things about selling services and products on the Internet. 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 be very expensive. But if you can't get traffic, how do you come up with this mystical figure called the conversion rate?
Well you use Pay per click to run some tests. 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. But that's a whole different animal we'll have to deal with in a future article.
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 and that a market does exist.
Once you establish the basics, product with potential, defined target audience, competition exists, and created or made arrangements to resell, let the testing begin. 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.
The key is to never stop testing. Always track everything you can about any campaigns or marketing methods. Know the best way to spend your advertising and marketing budget. What, no advertising and marketing budget? Well, that will have to wait for another article. I'm out of space and time for this one.
About the Author
John Dow owns www.jdWebWorks.com, a website that specializes in web site design tools, computer troubleshooting, and security. His WebMaster Essentials CD has helped many new and existing website owners by providing a collection of software, utilities, and marketing how to articles on Web Site Design and Marketing. Go here to learn more: http://www.jdwebworks.com/Webtools/webtool.htm.
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