Optimizing Paid Search Advertising
Author: Kevin Gold
Published: Tuesday, November 9, 2004
Is Your Paid Search Advertising Generating Positive Financial Results?
As an online business, you may be familiar with or currently utilize "pay for performance" search engines to send visitor traffic to your website. Also known as pay-per-click, PPC or paid search, it has literally taken the online marketing world by storm especially the two largest players, Overture and Google Adwords.
A 2004 "New Methods in Search Marketing" study by Piper Jaffray stated that "paid search constitutes more than 87% of U.S. search market revenues." This staggering statistic begs the question, "Are advertisers achieving a positive return on their paid search investment?" In other words, are sales being generated or is money just being spent?
The answer to this question may stem from understanding the role of the two critical performance metrics generated by all paid search campaigns (1) click-through rate and (2) website conversion.
The click-through rate is defined as the percentage of times a paid search ad is clicked on out of the total number of paid search ad views within a given period of time.
Click-through Rate (a.k.a. CTR) = Click-throughs (i.e. Total Visitors) / Impressions
For example, if your paid search ad is seen by 10 users and one user clicks on your ad, the click-through rate is 10 percent.
Website conversion is defined as the percentage of users who visit your website and complete your primary objective (i.e. purchased a product) out of the total number of users who visit your website in a given period of time.
Website Conversion (a.k.a. sales conversion) = Sales / Click-throughs (i.e. Total Visitors)
So what role does each play in understanding the effectiveness of a paid search campaign?
Standard practice among advertisers is to concentrate on writing ads that achieve a high click-through rate to send more visitor traffic to their website. Unfortunately this general assumption, "more traffic equals greater positive results", is flawed.
Consider this. Which click-through rate is better?- A 20% click-through rate for a paid search ad that achieves zero sales (0% website conversion).
OR
- A 0.2% click-through rate for a paid search ad that achieves 10 sales (10% website conversion).
The answer is obvious. The click-through rate, especially for newly setup PPC campaigns, is relative - it is the website conversion rate resulting from visitors clicking through a particular paid search ad that defines success or failure.
|
 |
|
|
|
|
|
|
|
|
|
|
RELATED NEWS
|
 |
Governor Walz Announces New Campaign to Attract Business to Minnesota
ST. PAUL, Minn., Sept. 9, 2024 /PRNewswire/ -- Governor Tim Walz and Explore Minnesota today announced the launch of a new ef...
|
|
Schneider Electric Foundation Turns 25, Launches '25 Years Young' Campaign in the U.S.
-- '25 Years Young' celebrates the 25(th) anniversary of the foundation -- A global call for contributions will awa...
|
|
Bulleit Frontier Whiskey launches its biggest US brand campaign to date: "We Aren't Made To Be Still"
LOUISVILLE, Ky., Sept. 16, 2024 /PRNewswire/ -- Bulleit Frontier Whiskey is announcing the launch of its new US brand campaig...
|
|
TECNO Launches #GoalTogether Campaign to Celebrate Saudi Arabia Youth's Unstoppable Pride and Ambition
RIYADH, Saudi Arabia, Sept. 16, 2024 /PRNewswire/ -- As the AFC Champions League Elite(TM) is officially kicking off, TECNO,...
|
|
Marketeam.ai Appoints Veteran Marketing & Advertising Executive Clive Sirkin to Head the Company's Board of Advisors
TEL AVIV, Israel, Sept. 10, 2024 /PRNewswire/ -- Marketeam.ai , a leader in AI-native marketing solutions and the developer o...
|
|
Submit News |
View More News
|
|
|
|
|
|
|
|
|
