How Is PPC Advertising Connected To Conversion Rate
Written on July 30, 2010 – 2:51 pm | by Guru
A Pay Per Click (PPC) advertising campaign’s victory is highly related to the website’s conversion rate. This means that the more paid search bid prices increase, the more crucial a site’s conversion rate is to have a high return of investment (ROI).
You must realize the trials that come with low conversion rates, so as to comprehend how conversion rate is associated to the success of PPC marketing. These trials are: (1) if you have a PPC search advertising campaign and the keyword price increases, your website’s existing conversion rate may not support the higher bids required to stay on top, (2) if you don’t have a Pay Per Click campaign but when you resolved to join in the game, keyword bid rates have already continued to rise, and (3) if you’re caught in any of these scenarios, you would need the know-how and skill to increase your conversion rates efficiently.
Let’s take a look at a typical online retailer’s conversion rate and its relation to the PPC advertising bids. Brand Y vends ladies’ bags at $300 each and has a 10% profit margin wherein he makes $30 per bag. Brand Y markets 20 bags for $6,000 and produces $600 in profit from those sales for every 1,000 visitors. By dividing $600 profit by the 1,000 visitors, the break even bid is $0.60, making Brand Y’s normal cost per click (CPC) on Yahoo or AdWords at $0.60 or less.
Ideally, Brand Y’s overall PPC advertising campaign must be played under the $0.60 bid ceiling. The higher the bid gets the fewer audience the retailer can reach. But then again, the reality is many targeted keywords have bid prices that are more than a dollar. Thus, in the above scenario, before he even had the chance to begin his campaign, Brand Y is now out of the game.
This example is only based on a 2% conversion rate. If he raises his conversion rate to 4% or higher, he could raise his bids, and at 4% conversion rate, he can compete with a $1.20 bid for the top spots. Brand Y’s PPC internet advertising campaign could be very lucrative at 8 to 10 percent conversion rate. In the competitive world of PPC advertising, as you can see, boosting the website’s conversion rate is the secret to triumph.
You could be in serious risk because bid prices are going up rapidly if you haven’t began your Pay Per Click marketing campaign. By the time you would have started to get to learn more about paid search advertising, it will be too expensive to understand through trial and error. What’s worse is if your competitions have already launched their campaigns and are at the point of improving their sites’ conversion rates while you’re still about to launch yours.
Increasing your site’s conversion rate is an important part of your PPC campaign. Don’t wait until bid prices are too expensive to concentrate on increasing your conversion rates. If you want to increase your conversion rates effectively, turning to a qualified PPC management company would be the best decision you’ll make in your campaign. As bid prices continue to rise, it’s more and more important that you let the pros do the PPC search advertising for you.
Tags: paid search advertising, ppc advertising, PPC management company, PPC search advertising
