Understanding Pay-Per-Click Advertising

An effective pay-per-click (PPC) advertising campaign will be one that generates return on investment (ROI). There are a number of things you need to consider when embarking on this type of project to ensure that your efforts reap rewards.

The campaign must be geared around search – what, when, where and how are people searching for products online, who are they, and what is the value of that search?

If you know what people are searching for, you can better plan the content of your display ads, which in turn will trigger the right responses from Google’s web crawlers that determine site rankings by usefulness and relevance.

What users are searching for gives a very specific, recent indication of where their interest lies; when they do it informs their needs or values, for example: time of day or night could indicate location (home or work) and whether the search activity happens during the week or on weekends.

Where they search will be deduced from their IP address and domain name, which gets more specific with a country designation like ‘.za’ than ‘.com’.

The ‘how’ of the search refers to the ever-increasing number of platforms available now:

• Desktop pc or laptop,
• Phone, smartphone or tablet,
• Operating system or carrier (phone plan providers that vary by area).

Ads need to be designed and displayed differently depending on their application – this is influenced by screen size, download speeds and urgency. Mobile phone searches top the ratings in immediacy when it comes to urgent search results.

Google is able to determine who the searchers are by demographics distilled from:

• Online profiles,
• Behavioural data gained from AdSense and remarketing
• As well as ‘topical interests gathered from sites visited in the Display Network’.

When it comes to applying a value to search traffic from PPC advertising, analysts and advertisers will consider:

• The number of sales or leads generated;
• The average spend per order;
• The cost per acquisition (CPA) i.e. conversion, lead or sale;
• Return on ad spend (ROAS) i.e. revenue over cost;
• Profit (ROI);
• The quality of leads and opportunities created
• And lifetime value (LTV) per customer.