From a marketer's point of view, or for that matter anyone trying to advertise their products, the establishment and growth of PPC has been little short of revolutionary. As many of us know, any form of advertising is a somewhat hit and miss affair. And no matter who might tell you otherwise, all forms of advertising involve some level of risk. And it's usually quite high.Pay Per Click, however, reduces this risk to an absolute minimum.
Is it possible to lose money from a scheme such as Google AdWords? Yes, of course it is. In fact it's actually very easy to do so.
Scenario 1:
With a daily budget of only $2.00, and a maximum cost per click (CPC) of $0.05, Company 1 isn't going to gain very much. Obviously. Nor are they risking losing much either.
But potentially they might gain forty customers a day, for only $2. Potentially.
After seeing a reasonable level of interest in their ads, Company 1 start to realise that they're being held back by their daily budget and low CPC, so they cautiously increase their bids, and open up the daily budget to $4.00, and then to $5.00.
By this point, they're reasonably confident that they can't lose, as they're only paying for each click anyway.
They're wrong.
Scenario 2:
With the experience of a few years behind them, Company 2 have a daily budget of $25, and most of their bids are around $0.50 maximum CPC.
Company 2 are a well established company, and their website receives a fairly large amount of traffic. They'd really like to be able to accurately track their sales, but they just don't have the time to do so.
They work on the basis that when you advertise, you throw a little bit of money around in many directions and hope that some of it sticks.
Their sales are great, so from their point of view, $750 a month on Google is peanuts.
And besides, they're only paying when someone actually clicks their ads, so they can't lose, right?
They're also wrong.
Over the next few days, we'll be looking at how Company 1 and Company 2 are losing money, and how they can both turn their losses into profit. We'll also be looking at the quick and easy accurate way to measure your campaign's effectiveness, how to increase your click through rates, dynamic titles, how to raise your position without spending more, and how to convert clicks to sales.
If you're wondering how to get more out of your Google AdWords spending, you'll find the information I share to be of interest. Watch this space.
