Does it pay to go for the #1 spot? For organic page rank listings, the answer is an obvious YES! But for paid search, the question is more complex because every click you get costs you money. If those paid clicks aren’t generating revenue once folks hit your web site, you’ve got trouble.

Why? Because the real goals of your website are almost never traffic for its own sake. This is consistent for small businesses as well as for the bigger players. Ultimately, you’re looking for visitors to you come to your site and take action of some sort whether that action is 100% online, 100% off-line, or somewhere in between. This desired action is commonly called "conversion." Examples of conversion include visiting a retail store, redeeming coupons, calling a toll-free phone number, registering online with contact info, lead generation, or everybody’s favorite… making an e-commerce purchase!

Note: Tracking conversions is essentiall to managing the PPC advertising campaign. If you are tracking any form of online activity, you owe it to yourself to have some kind of web analytics built into your website. GDM InterActive can help you install and manage your website analytics very affordably. Our preferred web analytics tool is Google analytics which tracks keyword campaigns very effectively. To find out more call us at (888)-GDM-4977 or send us an e-mail

Do you know your site’s conversion rate?

Sadly, many small businesses do not have the analytical firepower (or time) to stay on top of their page search advertising. But, it can be done. If you know your volume of traffic per day, per week, monthly, etc., and you know the number of people who convert (those you persuade to take the desired action), then you have the makings of the conversion rate. It starts off as a simple equation:

Conversions / traffic = conversion rate

For example:

This is pretty straighforward for most online conversions but can be anywhere from simple to complex for offline conversions. If you are not tracking your off-line conversions, you should start now to make every effort to track them. GDM InterActive can help you develop strategies for offline tracking --  call us at (888)-GDM-4977 or send us an e-mail.

How much can you afford to pay for a conversion?

The answer to this question is different for every business model and in fact, for every business, so I am not going to spend time discussing basic marketing theory here. But knowing your allowable expense for conversions is crucial for success with any form of direct marketing including paid search.

Put another way... how much can you spend to buy a new customer? How much is the average customer worth to you? Do you get repeat sales? How much is the average customer worth to you per year, or say, over the span of three to five years? Until you know your allowable expense for conversions, you will never maximize your paid search campaigns.

Start crunching the numbers

Once you know how much you can afford or how much you are willing to pay to get each conversion (your allowable), you are closer to knowing how much you can afford to spend per click.

Let’s add the cost per conversion to the equation we introduced above:

Now let’s take a look at a sliding scale of different conversion rates and different cost per click values:

If your allowable cost for each conversion (what you are willing to pay to buy each new customer or lead) is $50, then you can succeed with any combination of cost per click and conversion rate highlighted in green.

Or,

Let’s say your allowable is a $25… then you can succeed with any combination of cost per click and conversion rate highlighted in blue:

Now start thinking about applying this math to every key word you are considering. It likely starts adding up to a serious investment of time. This is why you may find it more effective to work with a company that really enjoys number crunching (like GDM InterActive) to set up and manage your PPC advertising promotions.

But whether you go it alone or work with a virtual marketing professional, the good news is that a lot of the really hard work takes place at the front end of the process. So, once you have made the investment to set up your PPC advertising promotions, the ongoing management time (and therefore the real cost) decreases dramatically.

Don't take your hands off the steering wheel!

A well designed PPC advertising program can run on autopilot for a while. But, leave it untended for too long and you could be in for some nasty surprises. Overall, it pays to keep an eye on your PPC programs a few hours every week. if you are having difficulty keeping up with your page search advertising program or simply want to make it bigger , better, and more efficient , GDM Interactive at (888)-GDM-4977 or send us an e-mail.