This is Part 5 of a 5-part series. Read the rest of the articles here:
- The PPC Guide for Beginners, Part 1: Intro to PPC ROI 
- The PPC Guide for Beginners, Part 2: Setting Your PPC Goals 
- The PPC Guide for Beginners, Part 3: The Landing Page Dilemma 
- The PPC Guide for Beginners, Part 4: Finding Your Keywords 
Who should use pay-per-click advertising? Does PPC really work?
Maybe you have been affected by Google updates , and your website disappeared from the SERP (search engine results page). Or maybe you simply want to make more money, and you’re looking for all the help you can get to boost sales.
There are times when a well-planned PPC campaign proves to be a quick and profitable solution to internet marketing woes. And there are times when it isn’t. But, if you have been with us since the beginning of this series – and have applied the suggested steps to your own situation – you know whether or not you are a PPC candidate, and if you are … you’re ready to get started.
Let’s recap the main points:
Smart PPC Considers Return On Investment
In Part 1: Intro to PPC ROI , we talked about the importance of determining whether a pay-per-click campaign could deliver a sufficient return on investment. Spending a nickel to earn a dollar is one thing, but putting out a dollar to get back a nickel is another.
The fundamentals of pay-per-click  advertising are not all that difficult to learn. Professional PPC managers dig way deeper than most. The can slice and dice the statistics 100 different ways. You can get by, though, by knowing just a handful of parameters.
PPC success stories are abundant, but there are also many ways to fail . Here are some of them:
- Not having clearly defined goals
- Not matching landing pages to goals
- Failing to attract qualified customers
- Not understanding how to set bids 
- Failing to cultivate your Quality Score 
- Not using metrics  to track progress towards goals
- Not monitoring results closely and making necessary adjustments
- Bailing out too quickly, in cases where favorable results are not immediately evident
- Not continuing to build and refine your list of keywords
- Not using negative keywords properly
- Not keeping up with changes – whether by Google or within the marketplace
Given the potential pitfalls (and there are many more that could be mentioned), you might wonder whether waging a PPC campaign is worth the effort – yet, properly implemented, many businesses have realized significant returns on their PPC investment. The most important question is, “Can you?”
Smart PPC Consistently Monitors Progress
In Part 2: Setting Your PPC Goals , we discussed a matter so fundamental it is often overlooked: Everyone wants to succeed, but few people take time to define exactly what “success” would look like. Consequently, decisions end up being based more on feelings than on facts … and that can be a sure path to disaster.
Your feelings can be influenced by your menu choice at lunch, but statistics – when correctly configured and interpreted – can tell you exactly where you are now and which way you are headed.
Metrics you will want to monitor include:
CTR (click-through rate) – Your PPC advertisement is displayed whenever your ad is sufficiently relevant to someone’s search query and your Ad Rank (Bid multiplied by Quality Score) is high enough to gain a spot for you in the results.
If you take the quotient of the number of times someone clicked on your ad over a certain period, divided by the number of times it was shown, and multiply that result by 100, you have computed your click-through-rate . The CTR is an indicator of how appealing your ad is to those who have an opportunity to view it. Moreover, CTR is a major factor in the computation of your Quality Score – so it is well worth your attention.
What is a good CTR ? That depends on a number of factors. Generally speaking, though, if 2% of your impressions results in a click, you’re doing okay. If you get a click-through on 10% of the impressions, you’re rocking it. If nobody’s clicking, something is wrong.
Conversion Rate – This metric tells you how many of those who click on your ad then go on to take the action called for in your strategy. For instance, your ad says “Get a quote on underwater bicycling insurance.” If 100 searchers are served your ad and 4 of those 100 click-through, you have a 4% CTR. Now, if 1 of the 4 people who click goes on to request a quote (your desired action), your conversion rate is 25%. Was it worth it? That depends on your Cost Per Conversion  (see below) and the value you receive from each conversion.
CPC (Cost Per Click) – This term serves double duty. It refers to the amount you are charged for any given AdWords click , a figure that can vary from impression to impression. CPC also describes the average amount you are paying for a click in any given period.
Cost Per Conversion – Now we’re talking reality. Are you making or losing money on your PPC campaign? Dividing the amount you have invested in advertising (Ad spend) by the total number of conversions for a given period will tell you how much you are paying for each conversion. Knowing this number helps you set the bids for your campaign. And when you compare the Cost Per Conversion to your profit from each conversion, you can tell whether you are making or losing money with PPC.
Quality Score (QS) – This is a number, one through ten, assigned to each of your keywords. The higher your QS, the less you pay for your ads and the higher is their potential for ranking. Google takes a number of factors into consideration to compute this number – things like CTR history for that keyword, the quality of your landing page, and how relevant your ad is to the search. Since Quality Score can drive down the cost of your campaign, thereby decreasing your Cost Per Conversion, you want to do everything you can to increase it.
These are fundamental metrics. There are many, many more formulas available to allow deeper insight and better campaign management. You can even set your account to automatically perform adjustments, based upon your goals and the parameters you deem most important.
Smart PPC Tailors Landing Pages to Match Each Ad Group
In Part 3: The Landing Page Dilemma , we saw that PPC can be a waste of time and money if the clicks you gain aren’t directed properly. Most of the time, that will mean a specific landing page  – not the home page of your website.
The most effective landing pages work symbiotically with the ad and the targeted keywords to boost your Click-Through-Rate, Conversion Rate, and Quality Score. The effectiveness of your landing pages can make or break your campaign.
What was he selling?
One afternoon, on assignment in Hawaii, I was heading towards Waikiki when I noticed a man on the corner holding a big stack of tickets. He would smile and eagerly hand one out to some of the passersby, but to others he would offer only a frown and a snub.
I was intrigued, so I took a spot on a nearby bench to observe. I wanted to see whether I could determine his criteria for selection – and thereby guess the product those tickets were intended to sell.
Your PPC ad is like that man. It should draw prime prospects to you and turn others away. Your landing page is the presentation and your call to action is the ticket. Will it convince the recipient to take advantage of your offer?
The better you dovetail each piece of the path along the way, the more you stand to gain from your efforts at PPC advertising.
Smart PPC Speaks the Customer’s Language
Finally, we talked about tools and methodology for developing your list of “words that work” in Part 4: Finding Your Keywords .
Once you have identified your customers and determined the problems they are facing, you can begin building a portfolio of words and phrases those customers are most likely to use when conducting an online search for a solution.
The secret to success is this: Find out what people need and provide it for them. Of course, the flipside of that principle is the secret to failure: Worry only about your own needs and help no one.
We spoke about tools to help with keyword research and how important it is to learn at least one of them well. Most people will work hard enough only to get by. But those who put forth the effort to work harder and learn more will discover patterns and niches the others never see … and their return will be well worth the effort.
Smart PPC Knows When to Ask for Help
Now for the question small business owners ask frequently: Can I manage my own PPC account?
It’s an honest question, and it’s certainly an appropriate question for this series of articles. From the beginning, I have hoped this project will be of special value to those who are curious about the possibilities of PPC, or who have dabbled on the edges a bit and have maybe even lost money and are concerned about the same thing happening again.
So, can you manage PPC in-house, by yourself, without hiring a consultant or PPC manager? Yes, you can. Many have succeeded at DIY pay-per-click. Why not you?
There is a caveat, however, and it is this: you could also represent yourself in a court of law, mount and replace your own tires, and cut your own hair – everything possible is not advisable. Only you can decide whether to go it alone or get some help, based on your own abilities and situation.
When I asked Richard Farr , founder of Conversion Max, about the potential for a small business to direct their own pay-per-click campaign, Richard told it to me straight:
PPC is a large and constantly changing field of endeavor. For a company to manage its own PPC, it would first need to have the right person on staff. Then, that person would need to invest lots and lots of time experimenting with PPC to get good. Then it would take an ongoing time commitment to stay current. Without an experienced guide to lead the charge, your efforts are likely to produce a poor (or even negative) ROI.
Of course, not all businesses can devote a large enough chunk of the monthly budget to attract a professional PPC team. Conversion Max, for instance, has earned a reputation for identifying trouble spots and plugging leaks that save big bucks for their clients – but their typical customer operates with an ad spend of $20,000 to $100,000 per month.
How can you decide how much to budget for your monthly Ad spend?
Stuart Draper , CEO of Get Found First, brings up an important point: the cost of an outside team will likely be lower than the salary package for an in-house person, and can almost certainly come in lower than the real cost of your own involvement.
Planning to do it yourself? Compare the cost of an agency to how much of your own time learning, managing, and keeping up with the latest developments in PPC will take. What else could you be doing with that time, and how valuable is it to you? AdWords may seem easy to do, but it is quite complex, especially if you want to get the most bang for your online ad dollars.
Where to Go from Here
Think you’re ready to jump on board? Learn how to set up an AdWords account .
If you’ve already got one, and you’re not sure if you’re on the right path, check out the free AdWords Performance Grader  – the fastest, easiest way to benchmark your current performance and find areas for improvement.
Thanks for coming along on this journey with me!
This is a guest post by Don Sturgill , a freelance writer and speaker from Bend, Oregon—PPC capital of the world. Don is the author of The Roadmap to Freedom , a work focused on helping entrepreneurs reach their dreams.