How To Analyze Pay Per Click Results

Writing by Brick Marketing on Wednesday, April 2, 2008

In an article at SiteProNews comparing SEO and SEM (pay per click), I found this little nugget of knowledge:

A.) Google gets nearly half of all US searches performed on the Internet so you can bet that’s at the top of our SEO to do list. Here are the exact numbers as provided by the “comScore for searchenginewatch.com” survey:

42.7% - Google
28.0% - Yahoo!
13.2% - MSN
7.60% - AOL
5.90% - ASK
2.60% - All Others Combined

B.) Now that we know how much the search engines are used let’s get some inside information to help us plan SEO and SEM strategies. According to the UK based company Neutralize.com, users of Google versus those of MSN are just about polar opposites when it comes to natural versus paid search listings. Here’s what their research found:

Google: 72.3% of searchers prefer clicking on the natural listings that SEO helps you get. Only 27.7% prefer using the paid links you might use as part of your SEM plan.

MSN: Only 28.8% of searchers go for the natural listings while 71.2% rely on paid links. This is almost the exact opposite of how Google users work.

This is all very telling information. First, we all knew Google was dominating search so that is nothing new. In fact, all those search statistics are in keeping with recent history and anyone who has been keeping up already knows much of that information. But the search numbers can help us put the SEM part of this puzzle into perspective. Here’s how:

Since the author here makes a big deal about the proportions of MSN users and the proportions of Googlers who click on pay per click ads versus those who click on organic listings, let’s perform a little exercise. Assuming that the numbers are accurate, 27.7% of Googlers will click on a pay per click ad. That means that of every 42.7 Internet searchers (who are all Google users), 11.8 of them will click a Pay Per Click ad. Ah, but of the 13.2 who use MSN, a whopping 71.2% of them will click on a Pay Per Click ad. How many is that, exactly? 9.4.

So it seems to me that any way you look at it, your chances of achieving a positive ROI are better with Google than with MSN, whether you are targeting organic searches or searchers through pay per click advertising. I’d rather get 11.8 clicks than 9.4, wouldn’t you?

Pay Per Click Click Prices And Number Of Clicks
But hold on a minute. Another piece of this puzzle is the price you’ll pay for the clicks. This article doesn’t tell us what average prices per click are relative to each search engine, but I do know that click prices are considerably less at MSN than at Google. Since 9.4 is roughly 80% of 11.8, your click bids need to be 20% lower on Google than on MSN in order for you to have the same amount of ad spend. Based on that, you can figure out what your ROI is by tracking the number of conversions you get from each each search engine’s Pay Per Click ads. Assuming that your landing page is the same and that your ads on both search engines are the same, your conversion rate should be pretty similar. What could affect a difference in the conversion from both search engines is the mindset of the type of consumer you are likely to attract from each search engine. That’s a variable that can’t be measured.

I think it is safe to say that for most advertisers, your ROI is going to be better with Google. If you spend .80 for a keyword phrase and place second or third versus $1.00 at MSN for the top position, you don’t have to sell as many units to make up for your ad spend with the same level of traffic. Let’s say you get 100 clicks from each ad. Your total spend will be $80 at Google and $100 at MSN. If you sell 1 unit of your product for $100 from each ad then you have broke even from your efforts at MSN while turning a $20 profit from your efforts at Google.

This is the kind of analysis you have to perform in order to get to the bottom of your advertising ROI and measuring the difference in results from each of the search engines.

                      Category: PPC Management                      

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