How Is PPC Advertising Related To Conversion Rate

A Pay Per Click (PPC) advertising campaign's success is greatly directed to the website's conversion rate

. This means that the more paid search bid prices increase, the more important a website's conversion rate is to get a high return of investment (ROI).

You must realize the trials that come with low conversion rates, so as to understand how conversion rate is associated to the success of PPC marketing. These tests are: (1) if you have a PPC search marketing campaign and the keyword price rises, your website's existing conversion rate may not support the higher bids required to stay on top, (2) if you don't have a Pay Per Click campaign but when you resolved to join in the game, keyword bid prices have already continued to rise, and (3) if you're caught in any of these scenarios, you would need the know-how and skill to boost your conversion rates effectively.

Let's take a look at a typical online retailer's conversion rate and its relation to the PPC advertising bids. Brand Y vends ladies' bags at $300 each and has a 10% profit margin wherein he receives $30 per bag. For each 1,000 visitors, Brand Y sells 20 bags for $6,000 and produces $600 in profit from those sales. By dividing $600 revenue by the 1,000 visitors, the break even bid is $0.60, making Brand Y's average cost per click (CPC) on Yahoo or Ad Words at $0.60 or less.

Ideally, Brand Y's overall PPC advertising campaign must be played under the $0.60 bid limit. The higher the bid gets the less audience the retailer can reach. Then again, the truth is many targeted keywords have bid prices that are more than a dollar. So, Brand Y is already out of the game before he even got the chance to begin his campaign in the above circumstance.

This example is only based on a 2% conversion rate. If he increases his conversion rate to 4% or higher, he could increase his bids, and at 4% conversion rate, he can compete with a $1.20 bid for the top spots. Brand Y's PPC search advertising campaign could be very productive at 8 to 10 percent conversion rate. As you can see, increasing the site's conversion rate is the key to success in the competitive world of PPC advertising.

Because bid prices are climbing quickly, if you haven't began your Pay Per Click advertising campaign you could be in serious risk. It will be very pricey to learn through trial and error by the time you would have began to get to learn more about paid search advertising. What's worse is if you're still about to start campaign, whereas your competitors have already launched their campaigns and are at the stage of boosting their sites' conversion rates.

Increasing your site's conversion rate is an important part of your PPC campaign. To concentrate on raising your conversion rates, don't wait until bid prices are very expensive. If you want to increase your conversion rates effectively, turning to a qualified PPC management company would be the best decision you'll make in your campaign. As bid prices continue to rise, it's more and more important that you let the pros do the PPC search advertising for you.

How Is PPC Advertising Related To Conversion Rate

By: Peter Dulay

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