Learn More on CPC Advertising

What is Cost Per Click (CPC) Advertising?

CPC advertising is the process of appearing on the "sponsored" links section of a search engine like Google or Yahoo. It is the fastest way of getting traffic through your site.

In order for your ads to appear in the sponsored links section, we define "keywords" that are relevant to your business. When a user searches for these keywords on a search engine like Google or Yahoo, the search engine decides whose ad to show in the search based on several criteria e.g. geographic location, the Keyword, how relevant your key word is to the rest of your site, what context the keyword is used on your site, the amount you are willing to bid on the keyword etc. The users sees the ad and if interested will click it to be directed to your website. That’s the point in time you pay for it. So if your ad shows a thousand times, and only 3 users click on the ad, you only get charged 3 times - hence the name "Cost Per Click".

Obviously you do not want users clicking on your ads without giving you any business. If done incorrectly, CPC advertising can become very expensive very quickly. For this reason you need to not only measure but also refine your campaign almost on a daily basis.

How Successful is your CPC Advertising Campaign?

In order to determine the success of your online advertising campaign, it is important to track a number that indicates how well the campaign is doing. With CPC advertising it's easy to get inundated with what numbers should be measured. The one number that allows you to gauge the success of a campaign is the Lead Conversion Cost (LCC). For example if a campaign's average LCC cost is $10 then in order to be profitable you must earn at least $10 from the action to break even.

Before your LCC can be measured, it’s important to decide upon a measurable action on your site that a user can perform for example buy a product or request more information. This action is considered part and parcel of your sales cycle. The action of submitting is a process known as Conversion Tracking.

The Importance of Conversion Tracking

The key to a successful CPC campaign lies in continually tracking and refining the keywords and ads in the campaign to make sure they perform below the break-even LCC target that is set for the campaign upfront. Through continual refining of the keywords and ads, the goal is to remove the underperforming ones to achieve better results. If left unchecked, it’s estimated that more that half the allocated budget per month would be wasted. As an example, say your budget is $100/day which adds up to more than $3,000 a month. Would you want to lose $1,500 a month of your hard earned money? Goes without saying that most people would have said a resounding NO!!. As you see this part of a CPC campaign is vital to it’s success and your bottom-line.

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