Pay Per Click
Google AdWords, Yahoo Search Marketing and MSN adCenter. You bid, they buy.
What is Pay Per Click
Pay Per Click advertising is perhaps the most popular form of online marketing and, if managed properly, can be extremely profitable for your company. Next time you search Google, Yahoo or MSN, take a look at the right side of the screen and you'll likely see a list of websites that appear to be separate from the search results. When you click on one of those links, you are taken directly to that company's website. The search engine then charges that company a small price for the click, hence the term Pay Per Click.
At Razorlight Media, we use Pay Per Click extensively and successfully in client campaigns to drive traffic to our clients websites and send customers to our clients' businesses. We handle all aspects of the Pay Per Click campaign, including creating or optimizing your website, researching keywords, writing the ads, and optimizing the campaign on an ongoing basis to maximize your customers.
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Here are some questions about pay per click advertising that our clients have asked in the past. These will help you understand how the system works and what Razorlight Media can do to help you get started.
Frequently Asked Questions
Do you manage advertising campaigns on all networks?
At Razorlight Media, we most often manage client campaigns on the big three networks: Google, Yahoo and MSN. We can also manage campaigns on other networks if it could provide a solid return on investment to the client.
Who sets pay per click prices?
Each network has its own automated system to determine prices you'll pay per click. The cost per click is paid directly to the network (i.e. Google, Yahoo, MSN).
The prices are determined automatically based on a bidding system and calculated based on the network's own proprietary algorithm. Each network will be slightly different, for instance, Google AdWords will have slightly different prices than Yahoo Search Marketing, which will be slightly different from MSN adCenter.
How are pay per click prices determined?
The price per click generally depends on 3 main factors - we'll use Google's system as an example here, but the same can be applied to Yahoo, Microsoft, or any other pay per click network.
- What the competition is willing to pay
If you're competition is willing to pay more per click than you are, their ads will appear higher on the page than yours. If enough advertisers are willing to pay more per click than you are, your ad will be pushed to the second page or may not show up at all.
- Landing page quality
Google's system - and sometimes Google's employees - will scan the actual page that searchers will land on when they click on your ad. This page is called the "landing page" and the more relevant that page is to the keyword(s) you're targeting, the lower your cost per click will be.
- Click-through rate
Not everyone who sees your ad will click on it. The percentage of those that see your ad who actually click on it is called the "click-through rate". Google assumes that if a larger percentage of people are clicking on your ad, it must be targeted closer to what they're looking for, and Google wants searchers to find what they're looking for, so Google gives your ad preferential treatment by reducing your cost per click.
- What the competition is willing to pay
What if I already have a Pay Per Click campaign?
Many of our clients come to us after attempting to manage their pay per click campaigns themselves and discovering just how much time and expertise is involved in running a highly successful campaign. Although some of them are able to build and manage their own campaigns profitably, they usually find that, with our experience and expertise, our service is an investment that pays for itself many times over and can significantly increase the profitability of the campaign, leaving our clients able to focus on what they do best...running their businesses.
How much does Pay Per Click advertising cost?
The cost per click varies dramatically from industry to industry. As a general rule of thumb, all things being equal, higher margin industries tend to have higher cost per click prices. For example, companies in the legal, medical, and financial industries tend to see the highest per click prices, whereas retailers like clothing stores tend to see lower per click prices.
Additionally, since pay per click advertising is based on a bidding system, more general keywords tend to have higher demand and thus cost more than specific keywords. For instance, a real estate agent may expect to pay as much as $10 per click to target searchers typing "real estate" into Google. However, if that same real estate agent targeted searchers typing "Los Angeles real estate agent" into Google, he or she may only expect to pay around $2 or $3 per click.
What do you charge to manage a pay per click campaign?
We charge 15% of the monthly advertising spend1 plus an hourly rate for things like landing page design and campaign optimization.
1 Minimum monthly management fee is $150
Can't I manage my own pay per click campaign?
Sure, and a lot of our smaller clients come to us after doing just that.
But why would you want to? We guarantee we can improve your campaign's performance by at least 15%, so there's no risk in test-driving our services.
What's the difference between Google AdWords, Yahoo Search Marketing, and MSN adCenter?
All three are pay per click advertising networks, the main difference is who owns them. Some of the other differences are:
- Traffic level - Google's system is the largest and most heavily trafficked, followed by Yahoo, then MSN. For any given keyword, Google AdWords will generally have about twice as many searches as Yahoo Search Marketing and three times as many as MSN adCenter.
- Cost per click - Google's system tends to be more expensive per click because there is more competition than on Yahoo and MSN.
- Demographics - Demographics vary slightly as well. Yahoo tends to have a slightly higher percentage of female searchers than Google and MSN. Average incomes and locations vary across networks as well, but only slightly.
- Conversion Rate by Industry - Conversion rates per industry will vary slightly between networks.
Our clients don't really have to worry about these specifics, however, because we manage every aspect of the campaign for them.