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The Perils of Pay-Per-Click Advertising

Have you been following the right recipe for Internet marketing success?

If you've ever tried to teach yourself how to cook, you probably made one of those classic, head-slap mistakes that ruin an otherwise perfect dish.

Common examples would be baking at the wrong temperature, using the wrong kinds of measuring cups, or substituting salt for sugar. In each case, they’re easy blunders to commit, but can kill the result you are looking for – even if you did everything else right.

The same principle applies to pay-per-click advertising, where too many business owners and executives are looking at the wrong goals. It's understandable, but keeping an eye on the right set of figures makes all the difference, and it isn't traffic, bid prices, or even click-through rates that matter most… it's your cost per conversion for each important keyword or phrase.

That isn't to say that those other numbers don't work into the mix, but that they should be secondary to the cost-per-conversion calculation. Here are a few quick reasons why:

Cost-per-conversion keeps you better aligned to your business goals. If you spend less on advertising than you make in gross profits, your bottom line is going to generally move in the right direction. You can't necessarily draw the same direct path from click-through rates or bid prices, though.

Watching your cost-per-conversion stops you from over (or under) paying for keywords. Sometimes, the best keywords seem too expensive, and the worst ones kill you slowly with low bid prices. Success with PPC is all about efficiency, and that's where your cost-per-conversion figure comes in.

Cost-per-conversion puts PPC advertising into the right context with regard to the rest of your Internet marketing plan. The better understanding you have of this number, the easier it is to decide where to put your marketing dollars, especially when you weigh the cost-per-conversion of PPC versus direct mail, telemarketing, and other tools.

As we've already said, cost-per-conversion isn't the only number that matters in online advertising, but keeping a close eye on it can help you make important decisions and stay on track. Have you been following the right recipe for Internet marketing success?

If you have questions contact us.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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