If you are new to pay per click advertising you may be struggling with deciding the size of your budget. Even experienced advertisers sometimes struggle with these issues so there is no shame. To be sure, you should limit your budget just so you don’t exceed your ability to pay the expense.

The reason you want to limit your PPC budget is because sometimes an ad will fail to get the type of result you’d expect it to get. When that happens you are simply losing money. You want to cap how much money you have the ability to lose so that you don’t end up casting a line into the water only to have the fish snag the bait and rip the pole out of your hands.

So much budget is too much?

Well, I’ve always believed you should start small. For most campaigns, $5 a day is adequate until you can get a handle on just how much you’ll pay for your advertising. You can always, of course, increase your budget as you need to, but one rule of thumb is to take a percentage of your overall advertising budget and devote that to your PPC budget.

The Yahoo! Search Marketing Blog had a great post yesterday on budget smoothing. What that means is they run your ads throughout the day to spread your budget out over the whole day so you don’t run through the budget before the day is out. That’s why you may go up during certain parts of the day and not find your ad running. Truthfully, all the search engines do it.

There are ways to keep those ads running longer. Yahoo! Search Marketing Blog recommends increasing your spend limit or selecting less popular keywords that don’t cost as much. Those are good recommendations, but there are other ways to keep your budget in check as well.

One way is to use the phrase match and exact match keyword match tools. And you can also use negative keywords to tell the search engines not to display your ads if certain keywords show up. For instance, if your targeted keyword phrase is “silver bullet” then you can use “silver spoon” as a negative keyword phrase to keep your ads from showing up for that phrase.

Put a little more thought into keyword matches and try to think like a searcher. What will they see when they search for certain phrases? Is that what you want?

The secret is out: PPC is a great way to drive targeted traffic to any landing page. But should you use it to drive traffic to your videos? Possibly.

It is possible to monetize your PPC traffic to your videos if you follow a few simple guidelines. The key to any Pay per click marketing is to get a return on your investment. Are your videos used for selling and do they make conversions? If so then they’ll be very apt for PPC traffic.

Here are a few tips to help you gain the most from your video marketing/PPC combination efforts:

• Have a strong call to action in your videos that will get the customer to buy something, join a list, or spend some money
• Don’t include more than one video per landing page
• Surround your video with optimized text so that you don’t rely on PPC alone and attract organic traffic as well
• Don’t just rely on the video alone; use other sales text on your landing page because not everyone will click to watch the video and if you don’t have a way to reach those people then you’ll spend money only to have them leave your site without doing anything
• Give your visitors a compelling reason on your landing page to watch the video
• Mention the video in your PPC ad title and/or description so that clickers know to expect it on your landing page

It is possible to monetize a video on a landing page through PPC traffic, but it’s best if you use the video in conjunction with other sales tools and don’t just rely on the video alone. The most important thing to remember is to include a strong call to action in the video that will motivate your viewers to buy what you are selling.

David Szetela brings up a very important point when he mentions in this article that the display URL on your ads don’t have to conform to a single web page URL on your web site. He gives to examples, which are reprinted below:

Outdoor Furniture
Durable Patio Beauty. See
Low Prices on Top Brands!
www.FranksFurniture.com/Outdoor

and the second example is:

Outdoor Furniture
Durable Patio Beauty. See
Low Prices on Top Brands!
Outdoor.FranksFurniture.com

Notice that in both examples you can add the keyword to before or after your URL. If you put it after your URL you’ll have to precede it with a forward slash to make it look like a folder on your URL. If before, place it in front of a period as if in a subdomain. Keep in mind that these pages have to actually exist. In other words, don’t just throw in the keyword for the heck of it. Create the page that the URL corresponds to and make that your display URL. The display URL does not have to be your home page.

But the side benefit to doing this is you have your keyword in the ad one more time. You have it in the title, you have it in the description, and then you have it in the display URL. Employ this technique and watch your click through rate go up.

Planning is very important. Especially for a successful PPC campaign. If you are starting out on your PPC venture then you need to plan it carefully and know what your breaking point is, but also where your profit point is. Here are some tips for planning a successful PPC campaign:

• Start with the proper keyword research
• What is your competition doing?
• Optimize your landing page to sell
• Match the most important keywords for your landing page
• Set up your account and write your first PPC ad
• When writing your ad, make sure your primary keyword is included in the ad’s title and description
• Only target one keyword per ad
• If you want to test keywords against each other, write two ads and split your budget between them for one week; whichever one does better is the ad you want to use - drop the other and increase your budget for the ad you plan to use
• Monitor your results
• Tweak your click bids and daily and monthly budget to increase your ROI

It’s important that you not get ahead of yourself. Don’t rush the process. Not every PPC campaign will make you money, but you have controls so that you don’t bust your budget. Use those controls.

Jeremy Mayes recently discussed the ad placement option in Google AdWords’ Content Network. He seems to think this is going to be good and, in his words, more efficient. But will it?

I think it might. The gist of the new feature allows advertisers to specify a particular web property they want their ads to show up on only when a certain keyword appears on a page or to raise your bid when a particular keyword when it appears on a certain web property. With the last option your ad will appear across the entire content network, but clicks will cost you more on the property that you specify when setting up the campaign. This allows you to make value judgments about particular content sites within the network. It’s actually a pretty useful feature. But how should you use it?

As stated above, there are two ways to use this feature. First, if your keyword is a low-volume keyword but there is a specific website that it would work extremely well for because of its narrow niche then you can specify that you want your ad to show up on that site on pages that use your low-volume keyword.

The second way to use this feature is to identify specific websites where a keyword is extremely valuable and to offer to pay more for clicks from that website. If you notice that you are getting a lot of clicks from a particular web property and that those clicks are converting well then you might use this option. Lower your bid across the content network but use the placement feature to keep your bid at the higher amount on that web property that is leading to greater conversions.

When it comes to pay per click advertising, the most important principle to keep in mind is to think like your customer. What will make her click? What is she looking for? What information will tickle her pickle?

PPC is about more than choosing the right keyword. It’s also about not choosing the wrong keyword. Speaking of keywords, have you identified your high-volume and low-volume keywords?

High-volume keywords are those keywords for which you will get a lot of traffic and the low-volume keywords are those keywords for which you will get some traffic, but they won’t be your highest traffic keywords. That doesn’t mean they can’t be just as valuable. They could be more valuable in terms of conversions and ROI. But identifying which keywords are likely to bring you more targeted traffic is an important piece of understanding your customer.

Bottom line: Advertising is about putting yourself in your customers’ shoes and giving them what they want. To start that process on the right foot, ask yourself this question, “If I were looking at this ad on a SERP, would I click it?”

Here’s an interesting chart showing the average CPC by vertical.

It’s interesting that the CPC for all of these industries is in an upward trend except for the automotive industry. I wonder if gas prices have affected this. If the automotive industry is declining because of lower auto sales and smaller vehicles selling more while larger vehicles selling less then that is very telling for the economy. But even more telling is the increase in every other industry.

The mortgage and auto finance industries have increased - tremendously. Dating, travel, and retail have only slightly increased. I believe these numbers may also reflect more competition as a whole in each of these industries. The travel industry has always been competitive, but fewer people are traveling these days since the cost of fuel is rising. That probably explains why the travel industries CPCs are not skyrocketing. On the other hand, to avert foreclosure, many homeowners are refinancing. That would equate to a huge increase in the competitive field of mortgage financing, driving CPC prices up.

When you plan your budgets for advertising and you are in an industry where CPC is going up, you need to account for that fact. As CPC goes up, you will get fewer clicks for the same number of dollars in your budget. Will that affect your conversion rate and ROI? You need to know.

If you see a sudden spike in clicks or impressions on your pay per click ads, it could mean that your latest campaign is working or it could mean that you are are experiencing click fraud. What should you do?

Well, first, try to find out why you are seeing a spike in click. The Yahoo! Search Marketing Blog recently reported that you could see a spike in clicks for any of the following reasons:

• Changes to an ad’s ranking in search results
• A change to the match type used for your ads
• Keyword seasonality
• A new distribution partner added to the Yahoo! network
• Yahoo! Buzz placement, where searches on certain popular keywords can be performed directly from the page content.
• Yahoo! Front Page placement, where searches on certain popular keywords can be performed directly from the page content

If a placement of your ad changes for any reason then you could see a spike in the number of clicks that you get. For instance, let’s say your number 1 competitor pauses his ads and that causes you to rise in your ranking a few places. That could increase the number of clicks that you are getting. You can always adjust your keyword bid temporarily until you see yourself suddenly decline then adjust them upwards again. But what if there is click fraud? What should you do?

Yahoo! has a Traffic Quality Center that lets you report sudden spikes and ask for an investigation. Their report will tell you why your clicks have suddenly gone up and you’ll be able to act accordingly. Each of the search engines has a similar service and all you have to do is report what you see and they’ll let you know what they see happening. Most likely, if you see a sudden rise in clicks, there is a logical explanation for it and it’s not always click fraud.

Google AdWords has announced that its website optimizer will work with some CMS platforms. That’s good news, but your CMS has to be a technology partner with Google Adwords or it won’t work.

The website optimizer is a good tool for any website, CMS or not. It allows you to test your content and find out what your visitors really want. You can get direct feedback from your website visitors, which allows you to increase your website effectiveness and get more conversions from your content. By testing and analyzing the content on your website and allowing your visitors to give you feeback on it you are telling your customers that you care about their concerns and will take them seriously. The website optimizer reports allow you to drill down your results and feedback into manageable criteria for better analyzing.

When it comes to pay per click campaign management, Google AdWords has the best tools for webmasters who are serious about increasing their conversions.

(Source) On average, 4% of clickthroughs* from a search engine results page lead to conversions – that’s about 1 in every 25 clicks. This differs by search engine, and rises to 7.5% on Live Search; in other words, 1 in every 13 click throughs goes through to a conversion. In fact, when we look at clickthroughs from Live Search to retail sites, that rises to 1 in every 5 clickthroughs going through to a conversion, massively increasing the value of your search ad and increasing the ROI.

These are stats that search advertisers should pay attention to. If your conversion rate is lower than 7.4% on MSN adCenter or 4% on Google then you might want to take a look at your ads and landing pages to find out why. One overarching question is, Why does MSN adCenter seem to have a better conversion rate?

Keep in mind that you’ll have a lot fewer click throughs on MSN adCenter. The traffic is nowhere near where it is on Google. So that 4% conversion rate might actually mean more total conversions. On the other hand, you’ll be paying more for clicks too. These are considerations you’ll need to consider when judging your ROI.

Here’s an illustration that might help:

For every 100 clicks throughs you’ll have 7.4 conversions from MSN adCenter, but you’ll only have 4 conversions from Google. Those clicks might cost you 5 cents on average at MSN adCenter and 25 cents on average at Google. If you make $10 per sale after expenses from each unit sold then your total intake from your MSN adCenter conversions amounts ot $74 and from Google, $40. Your click through payouts are .50 and $2.50, respectively. It might seem like a no-brainer and that MSN adCenter has a slam dunk just considering these figures, but you also need to take into considering the length of time it takes to reach these numbers.

If you consider that it could take 10 times longer to reach the 100 click throughs on MSN adCenter than it does on Google then you could reach that 100 click throughs in 1 week at Google compared to 10 weeks at MSN adCenter. That means you’ll earn an ROI of $37.50 per week at Google, but $7.35 per week at MSN adCenter.

While these figures might not be realistic in terms of what you should expect at each search engine, they do reflect the kind of mathematical thinking required to figure your ROI at each search engine and encourage you to compare apples to apples.

Here’s a good list of pay per click ad optimization tactics. It won’t work just for adCenter either. You can use it for Google AdWords or for Yahoo! Search Marketing.

Here are some highlights:

• Always test multiple ads
• If you have a low CTR, repeat your ads with a higher CTR and remove the poor performers
• Be sure to use negative keywords
• If you have a high CPC and low ROI then lower your bids
• Do you get low traffic from your ads? Use shorter keyword phrases and expand your keyword list
• If your conversion rate is low it’s time to update your landing page
• Include your exact keyword in your ad’s title and description

Pay per click advertising is largely a matter of tinkering. You have to play around and experiment. If something doesn’t work, throw it out and try something else. Keep what works and move on.

I’m not sure what Kevin Gold is driving at here. He seems to be complaining that PPC advertising is taking on the feel of traditional organic SEO. But I’m not sure that this is a real change. PPC has always involved some element of SEO.

Consider this:

• It’s always been keyword-based
• Relevant landing pages have always mattered
• Getting the click has always meant enticing the searcher to click your ad

OK, admittedly, that last point doesn’t necessarily involve SEO. And it’s true that in the early days of PPC you didn’t have to point searchers to a landing page centered around the same keyword that your ad targeted. Many searchers found those types of ads misleading and those landing pages didn’t convert well. If you wanted to see high conversions from your landing pages then you tried to match the keywords from your ad to your landing page and actually sold a product that your PPC ad advertised.

But Gold does make a substantial point in mentioning load times, aging requirements, and other SEO-related criteria. These measures are in place to improve the search experience and to improve the ads that are offered to searchers. They are an improvement and if you don’t believe me then just go back in time to 1991 and see what kinds of ads matched what kinds of landing pages. There was some obvious deception going on.

Google wants PPC advertisers to give thought to theirs strategies, and I can’t blame them. Is it more difficult? Yes, in some ways. But if you do things by the guidelines, you can see your advertising become more effective. PPC is still PPC at the core.

David Utter had a great article on conversions at WebProNews. There’s a lot of meat in this article, but I like that last paragraph:

Even the regulars may provide better profitability in converting sales, either more frequently or with larger purchases depending on one’s business niche. When looking for conversions, don’t neglect the customers you already have, even as you seek a broader customer base.

Today’s e-tailers have to think about the needs of two types of customers - those returning and new customers. They have entirely different needs. New customers will not do business with you if they can’t trust you. That’s the first thing to keep in mind. You have to give them every reason to trust what you are doing. Otherwise, they’ll go elsewhere.

What distinguishes you from the competition? It’s got to be more than price. You may be the least expensive service on the Internet, but that won’t make people buy from you. Easing their worries will.

As for your returning customers, if you put too much emphasis on gaining new sales then your customers will buy from you one time then never return. Is that what you want? If not, then you should seriously consider conversions from a dual standpoint - what your current customers want and potential customers need.

A good article on the relationship between PPC and SEO at Marketing Pilgrim talks about how PPC is impatient and SEO is a better long-term thinker. I like the analogy.

Something new PPC advertisers need to keep in mind is not to throw out SEO just because you’ve got an advertising campaign going. You have to make sure that your PPC campaigns and SEO compliment each other. If you just start buying ads and not testing them or ensuring that your landing pages are well optimized and ready to convert then you’ll end up just throwing your money down a sinkhole.

PPC is good for driving quick traffic to your web pages. But the best thing to do before you start advertising is to optimize your landing pages and make sure they convert before you spend money on clicks. If your landing pages convert with free traffic from articles, forum postings, blogs, and other free traffic-driving methods then they’ll convert from paid PPC traffic. The one thing to keep in mind is to start at the beginning.