Pay Per Click Metrics

To measure the success or failure basically a pay per click account, advertisers need to understand some metrics and their meaning. Here is a simplified account on pay per click campaign optimization, focused on three factors - keyphrases, ads and landing pages - and three metrics - click-through rate, cost per click, and conversion rate.

Phrases, ads and landing pages

Good deal to optimize keyphrases, ads and landing pages. This is a little 'is an abbreviation for different reasons. For example, "keyword phrases" would be more properly defined as "phrase match", given that an ad is shown for different batches of queries and keyword phrases are not necessarily different, and the ads and landing pages could be broken into more elements, since these terms include separate important factors. These three elements, however, provide a good basis.

A user makes a query, your sentences to determine whether an ad is displayed, the ad determines whether the user is viewing the landing page, landing page and determines whether the user makes a transaction.

Click-Through Rate (CTR)

CTR is influenced by key phrases and ads, landing pages have little or nothing to do with this metric. Since phrases constant improvement means that the CTR of your ad text or position has "improved". "Improved" means the text of the ad catch your attention better, offers something that the user is interested in, or is in a higher position. This does not mean that the ad is more profitable. Given constant ads, improving CTR means that sentences are more relevant ads for new keyphrases or touching in a group more interested seekers. Even that does not mean the ad is more profitable.

Advertisers who are trying to improve CTR their campaign and have a conversion rate of return are trying to get their ads to do more work for them, more and more users to the landing page and possibly reduce costs in Adwords . Advertisers can also use CTR as a general indicator of the rate of conversion of a landing page. Roughly speaking, if an ad accurately describes what is found on a landing page, this may be an acceptable assumption, but advertisers should not rely on this assumption. CTR and conversion rate should be treated as independent parameters. Advertisers can also try to improve the CTR to reduce costs in Adwords because this is a factor score of quality of an ad. The relationship is further complicated here. In general, the goal is to find keyword phrases more specific or less competitive, or write the text better.

If a keyphrase-ad-landing page combination is cost effective, advertisers may try to improve click-through rates. If the combination is not cost effective, advertisers should focus on decreasing cost-per-click or to increase conversion rates.

Cost Per Click (CPC)

For most programs pay per click, cost per click is virtually synonymous with the offer. Google Adwords complicates the picture with the quality score. Advertisers can reduce the average CPC, without lowering bids, improving click-through rates, making good landing pages, and writing good ads.

If an advertiser has a non-profitable keyphrase-ad-landing page combinations, he / she may choose to lower groped his / her CPC. The best and easiest way to do this, even in Adwords, is to reduce the deals. An advertiser in Adwords could then try to increase their quality score from a profitable position, increasing their offer if the quality score has improved enough to make it more profitable high positions.

A poster with a profitable keyphrase-ad-landing page combinations may decide to increase their CPC to make the combination more profitable. In doing so, the advertiser must be presumed to be in a position of higher rank will not increase the conversion rates. There are arguments against this. There are arguments to be at a lower rank will increase conversion rates because the user is more likely to be browsing through the text ad to find what they really want, instead of simply clicking on the first thing he / she sees. In general, it is better to assume that rates of CPC and conversion are independent parameters. A lot of companies with stars in their eyes, who want to be number one for their end of the field and trying to increase traffic to forget this. Sometimes (most of the time because the systems offered in AdWords and Overture to get people to overbid), it is more profitable to be in a lower position. Unless there is some other value that is not represented in numbers (brand recognition could have a value that is not represented in the calculations of conversion), an advertiser should look to see what CPC maximizes profits and not pay attention the voice in his head that he should be number one. Pay per click advertising is (may be even more if Adwords released details of their classification system) very mathematical. In a world where people had time and energy, algorithms could probably be created to find the hotel ideal as a function of profit taking offers and find the offer that maximizes profit (with calculation). If there is a bid management tool that did this, I would buy right quick.

Conversion Rate

Phrases, ads and landing pages all affect conversion rates. An advertiser must always strive to improve conversion rates. This statement needs qualification. An advertiser can often increase conversion rates, writing a text that qualifies you as someone who is more likely to make a transaction - essentially lowering the click-through rates. If a keyphrase-ad-landing page combination is useless, this is a good strategy. If a keyphrase-ad-landing page combination is profitable, this may not be a good strategy. In this case the increase in conversion rate could increase the return on investment, but decrease the overall profit. A similar argument exists for phrases. An advertiser could not miss the opportunity of a good advertising if they are too selective, not wide enough, in their list keyphrase.

Other than that, given constant phrases and ads, an advertiser should always be editing a site to increase conversion rates. This means creating content that is directly relevant to what you're looking for and facilitating the transaction process. This involves establishing trust with you and make you sure that he / she is getting what you want at a cost that is better than what they find elsewhere.

Conclusion

Conversion rate, cost per click and click-throughs are three main parameters to measure the success or improve a pay per click campaign. Most advertisers do not look at these parameters correctly or sucked into the belief that they are interdependent. These parameters must be treated separately to increase the profitability of a campaign. As should be treated depends on the profitability of the campaign keyword-ad-landing page combinations ....