Another advantage is the simplicity of the pay-per-click process. You just bid and you're up and running. It doesn't demand any specific technical knowledge, though the more you know about search engines and keywords, the easier and more effective the process will be. The downside is that pay-per-click is essentially a bidding war. A higher bid than yours will lower your position on search engine results. This means that you will have to raise your bid to regain your position which can obviously become quite expensive, especially if you are bidding on a popular keyword.
In order to determine if pay-per-click is a cost effective form of marketing for your business, you must do some computing to figure out how much each visitor to your site is worth. You can compute this value by dividing the profit you make on your website over a given period of time by the total number of visitors for that same time period. For example, if your site made $5,000 in profits and there were 2,5000 hits, each visitor would be theoretically worth 50 cents. The basic formula is profits divided by visitors.
The figure of 50 cents per visitor is the point at which your business breaks even. The idea, of course, is to show a profit, not to merely cover your costs. Therefore, you are aiming at a figure less than 50 cents per click. Be aware that the most popular keywords often cost considerably more than 50 cents a click. The only way around this is to bid less for these phrases or you will be paying too much for each individual hit.
In order to determine if pay-per-click is a cost effective form of marketing for your business, you must do some computing to figure out how much each visitor to your site is worth. You can compute this value by dividing the profit you make on your website over a given period of time by the total number of visitors for that same time period. For example, if your site made $5,000 in profits and there were 2,5000 hits, each visitor would be theoretically worth 50 cents. The basic formula is profits divided by visitors.
The figure of 50 cents per visitor is the point at which your business breaks even. The idea, of course, is to show a profit, not to merely cover your costs. Therefore, you are aiming at a figure less than 50 cents per click. Be aware that the most popular keywords often cost considerably more than 50 cents a click. The only way around this is to bid less for these phrases or you will be paying too much for each individual hit.
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