by Charlie Yeoh, 9/30/2006
In order to determine if pay-per-click is a cost effective form of marketing for your business, you must do some computing to figure out how much each visitor to your site is worth. You can compute this value by dividing the profit you make on your website over a given period of time by the total number of visitors for that same time period. For example, if your site made $5,000 in profits and there were 2,5000 hits, each visitor would be theoretically worth 50 cents. The basic formula is profits divided by visitors.
The figure of 50 cents per visitor is the point at which your business breaks even. The idea, of course, is to show a profit, not to merely cover your costs. Therefore, you are aiming at a figure less than 50 cents per click.
Be aware that the most popular keywords often cost considerably more than 50 cents a click. The only way around this is to bid less for these phrases or you will be paying too much for each individual hit.
The key (pun intended) to success is to learn everything you can about search engine keyword research. The good news is there isn't a limit to the amount of keywords you can add to your bid because additional keywords do not add additional cost. This translates into a lot less hassle for you because there is no need to optimize your site to index a particular set of keywords.
Obviously, some keywords are much more effective than others are, but they will not cost you anything except time to set-up your account in your pay-per-click bid. Of the popular search engines that offer pay-per-click, one called Overture provides an online tool that will give you the data on how often particular keywords are entered into their search engine. They also offer suggestions for keywords after you enter a description of your site.
In pay-per-click, this written description is crucial. You must understand that the object of your description is not to generally attract visitors, but to be as specific as possible so that only those visitors who are likely to buy your service or product go to your site. You must use expert marketing copy to guarantee that your description is both precise and enticing to attract the most ideal candidates to your site. This description is your most powerful tool to insure that your bid is profitable.