Winning at Pay Per Click Campaigns

To be successful at running pay per click campaigns, it is essential to obtain proper metrics. Without clear statistics such as impressions, click through rates and conversion rates, you might as well use dollar bills to start the BBQ fire this summer.

Pay per click advertisement offered by major players such as Google Adwords and Overture will show impressions and click throughs rates of your ads, if set up properly. This is only the first step. When you pay for a click or an eyeball to come to your website, you also need to quantify if this eyeball earned you any revenues. You can setup click throughs on the provider's end or on your own website. The easiest is to use URL tracking within Overture or your Adwords account.

Now that you know the impression and click throughs, you can measure the click through rate using this formula:

Click Throughs
x 100 = click through rate in percent
Impressions

The second step is to determine how to measure and quantify the conversion. A conversion does not always have to be a sale of a product or service. It can be an action (filling in a survey or watching a video etc...) or it can simply be viewing of your web page. For simplicity's sake, we will use a sale as a conversion for the purpose of this article.
Once you know the click through rate, you can measure the conversion rate by using the following formula:

Sales
x 100 = conversion rate in percent
Click Throughs

Now, armed with the above formulas, you can begin your pay per click campaigns. It is important that you measure statistics down to the level of your key phrases / keywords. It's great to purchase $100 worth of clicks and know that you made $150 but with fine tuning and really digging into each term, you will know which phrases actually brought in the sale (revenue generating) and which phrases only yielded clicks (non revenue or low revenue generating).

If you are not tracking your keyword phrases when running pay per click campaigns, you either have lots of money to burn (as mentioned in my opening BBQ comment) or you are already making more than you are spending and am not looking to increase your bottom line profit. :)

As for specific technical details on how to track impressions --> click throughs --> conversions, now that is a topic for another article.

Ian LeeInternet Marketing Strategist / Affiliate Manager