Pay per Click how it works

Few young businesses have piles of cash for marketing but I’ll take the challenge of thinking hard about where to spend marketing dollars any day. One way we’ve had success is with tightly run, highly measured pay-per-click programs.

Before you start a PPC campaign, figure out what a customer is worth to your business, and what you are willing to spend to get that customer. For example: “A customer is worth about $100 to my business, so I am willing to spend $50 to get that customer.”

Since no business can convert every lead, use a formula based on a conversion rate to determine what you can pay for leads. In this example, if you can convert 1 in 10 leads into paying customers, you’d pay $5 per lead.

With this simple formula as a guide, here’s why PPC plus analytics can be a successful marketing vehicle for entrepreneurs.

1. PPC works with small budgets. Author and entrepreneur Seth Godin recently said “The big mistake (marketers make) is thinking that their job is to spend money to get attention. If they think that that is what their job is, they will never ever succeed in marketing.”

PPC can be extremely effective for small budgets.

Targeting.: You can use PPC to target visitors at all stages of the buying funnel. Start by focusing on the key words people type in when they are ready to buy. The lower in the funnel, the higher conversion rate you should expect. When you add geography, time and language, you have a surefire way to pinpoint your most qualified customer.

Matching. Avoid broad match or you’ll be paying for unqualified clicks that will just drain your budget. Start with a modified broad match to get higher relevance. Since PPC is an auction format, price is driven by demand/value. You can’t overspend when it’s self-serve.

There is no direct correlation between budget and results. If you get a big infusion of cash and you can triple your PPC budget, it won’t necessarily triple the volume of same quality of leads.

2. Test lots of messages: The days of committing to ‘one version’ with print brochures are long gone. PPC is a great way to test content and combinations of words and messages. Design tests to measure if you’re increasing relevance of keywords to ad copy to landing pages.

Think whether the promise from the ad is delivered consistently on the landing page and in the headline and body copy. We’ve found rearranging copy in a headline or changing the description line from prose to a customer quote can increase click-through rates by 8 percent or more.

3. Test lots of markets. Our online collaboration tool is used in 165 countries and is available in eight languages. We market directly to these different audiences using the appropriate language. If an ad is working in a certain market, we’ll test the same copy in another market but, remember, there are subtle nuances in each language. For example, the French word for "management" (gestion) implies "financial" management, so we've added extra descriptors in our ad copy to ensure we're not paying for clicks from French visitors looking to get a handle on their personal finances.

It’s a good practice to have trusted individuals who know the native language review your copy and not only rely on Google Translate.

4. Tests quickly point to the right direction. More often than not, the simplest, briefest version of your page will be the most effective. Always start with some basic best practices, create your hypothesis and then test everything - headline, buttons, video, CTA placement and so on. It’s a sure-fire way to validate what you’ve learned.

Give your tests enough time to reach a conclusion, then build a new test based on your findings. Keep at it even when you think you’ve nailed the perfectly performing campaign and you’re exceeding your expectations.

5. Numbers trump opinion and emotion. When funds are tight and every lead counts, using data instead of your opinion to make decisions is a lifesaver. We use Google AdWords and Bing Ads, along with some sophisticated tools like GA Content Experiments and Optimizely combined with our own analysis, to measure which market segments are the most valuable. We double down on those and turn off those that are underperforming.

Marketing on a small budget might seem a tough row to hoe but there are ways to get results. A carefully planned, highly detailed PPC and metrics program can generate the results your company needs without spending an arm and a leg. As businessman and author Jack Welch once said, “An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”