PCM/PPC Advertising

There are two main types of paid advertising on the internet.

PCM Advertising where you pay for every thousand views of your advertisement.
PPC Advertising where you pay for each click through to your website. This is the most popular.

You write an ad, set up a campaign at one of the main Search Engines who place that ad on targeted websites and you pay for the traffic flow to your website.

Straightforward? Not exactly.

Determine Your Maximum Bid

Ther first thing you need to do is work out if you can afford PPC advertising. If you are impatient then you can launch an advertsiing campaign without researching it first, but it is best to wait until you have a steady stream of free traffic so you can calculate your conversion rates.

1. Calculate your conversion rate for each product and service; the percentage of vsitors who bought the product having viewed it on your website.

conversion rate = purchaser/viewers

2. Calculate your margin on each product.

margin = retail price of the product - cost of producing it

3. Calculate your advertsing break even point per click through to your site. It is the point where your costs for advertising will equal the profit you make. This is your absolute maximum bid i.e. if you spend this much you make nothing at all.

advertising break even = margin x conversion rate

4. Assuming you want to make a profit on each sale and you have other overheads then you have to adjust this figure. Determine how much you want to make for each sale. Your profit margin once you have added in your advertising costs.

maximum bid = advertsing break even * (1 - %profit/100)

Example

If your conversion rate is 1% which is quite reasonable on the internet and you sell a product for $10 which costs you $4 to produce or source.

conversion rate = 1/100 = 0.01 (1%) i.e. 1 in 100 visitors buy
margin = $10 - $4 = $6
advertsing break even = 0.01 x $6 = $0.06

If you would like to make 25% profit per sale then:

maximum bid = $0.06 x (1-25/100) = 0.06 x 0.75 = $0.045

You cannot afford to pay more than 4.5 cents per click through to your website. Not good enough for PPC advertising so you would need to revise your business model or rely on free traffic.

PPC Advertising Setup Warning

Unfortunately the 3 main Search Engines, Google, Yahoo and MSN, have set up advertising defaults which will probably not be to your advantage.

When these companies decide where to place your ads they use a search matching parameter which can be set to BROAD or EXACT. During the setup process you can easily miss this. Indeed it is not displayed at all and you have to search for it. You want all your searches to be EXACT unless you have a very good reason otherwise. The problem with BROAD matching is that it will display your advert for keywords that really have nothing to do with your website.

For example, if you sell 'cat litter' and have an ad running for this keyword, then you might find your ad appearing for keywords like 'litter collection' or 'cat naps'. The English language is too varied to run this risk and attracting unwelcome clicks which you pay for.

The other thing to watch is CONTENT advertising. Generally you don't want to include CONTENT in your advertisment placing. What is appropriate content for your website and its products is open to broad interpretation. You may decide later to allow less targeted advertising, but to start, you do not need this.

Writing Advertisements

Before you sign up write a few different advertisements. It is a good practice to run these past other people for ideas.

The ads have three text parts which vary in length for all of the three main Search Engines.

Your heading should include the search keyword as it may be highlighted on the display page. At least it should appear in the ad body.

Signing Up For PPC Advertising

Google, Yahoo MSN

You can signup with the three main Search Engines for PPC Advertising with the links below.

	Microsoft adCenter $5 deposit to sign up.
	Yahoo! Search Marketing Currently offering a free $50 credit coupon.
	Google AdWords $5 deposit to sign up.

Other PPC Advertising Websites

These are the best of the rest which may well give you better results than the main Search Engines though not so much traffic. Be as specific as possible in targeting your market and look out for sign up deals.

	MIVA - One of the better PPC search engines. click here for a FREE $25 bonus on signup.
	Enhance - A strong emerging PPC search engine with solid quality control. Click here for a FREE $25 bonus on signup..
	SearchFeed - Geo-targeting available. Reasonable traffic sources.
	ABCSearch - Solid targeting, decent traffic sources, and good customer service. Click here and ABSSearch will match your initial deposit up to $100.
	7Search - A smaller search engine with good quality traffic. Good interface. They claim better ROI than either Google or Yahoo! because of their high quality traffic sources. Needs a $25 deposit to sign up. Click here.
	Search123 - One of the first PPC search engines. Good support. Click here to signup for $50 and receive $20 free.
	GoClick - Cheap traffic of variable quality. Click here to start an account with only $10 and bid from 1 cent.

When to use PCM Advertising

Once you have established a good source of clicks through to your site you can analyse the the number of click throughs and work out if it would be cheaper to pay for each thousand ads displayed. A really good ad that brings in a lot of clicks is often worth changing to PCM advertising.