CPC PPC and Traffic Acquisition Explained

Using Google Resources for Keyword Research and Know Your Numbers

Why you should always be able to calculate the cost of acquiring traffic, the anticipated income, and the market price of keywords for your product niche, or risk leaving money on the table!

Someone asked me the other day why so much time is spent concentrating on PPC, CPC and the cost of traffic. It's easy - if you don't know your numbers in business, whatever the business, you're doomed to failure from the start. Whether you're talking about keyword research, AdSense/AdWords or other pay per click advertising, or just looking to buy some bulk traffic or ezine adverts, the only way to know that it will be profitable is to know the numbers. Chiefly, it is in the infopreneur/affiliate marketer's interest to know:

• the cost of traffic acquisition
• the conversion rate
• the income per action

In other words, it is necessary to have a good handle on how much the campaign will cost, what proportion of the resulting leads will become customers, and how much each anticipated action is going to make. It is only when in possession of these three indicators that the calculation as to whether a campaign is worth the time and money can be performed. Before making any sense of these numbers, it is necessary to understand a few terms.

PPC

This acronym refers to a specific model used to acquire traffic, Pay Per Click. It is the model used by Google AdWords, amongst others, whereby the advertiser pays a fee for each visitor directed to their site via an advert that they supply. From the point of view of an online entrepreneur, the model is very powerful in allowing adverts to be tested for a relatively small fee.

What is more important is the amount of control that the advertiser has over the budget. For example, the PPC provider (be it Google or another) will let the advertiser know up front how much each click will cost (see CPC, below). Added to that, the advertiser can also pick a budget for the campaign that fits their needs, and know how many guaranteed site visits that will bring.

It is a very, very, powerful, and flexible, traffic acquisition model indeed.

CPC

CPC is the Cost Per Click. It is the amount that an advertiser has to pay, per click, to receive a single visitor. Depending on the traffic source (paid inclusion, context sensitive advert, email advert, site advert, etc.) this can vary greatly. A reasonable indicator (for reasons explained below) of CPC is the Google AdWords cost.

This can range from $0.05 (five cents) right up to $10 and more. For a single click. This is a very important metric, as it allows the site owner to calculate the expected profit of a campaign, based on the cost of traffic acquisition.

The profit is equal to the selling price, multiplied by the conversion rate, multiplied by the number of visitors, minus the CPC multiplied by the number of visitors. So, if a site owner sells a $37 eBook, from a sales page converting at 10% (0.1), then the profit from a 100 visitor campaign, with a $0.05 CPC would be:

profit = (($37 x 0.1) x 100) - (0.05 x 100)
profit = $370 - $5
profit = $365

Simply turning this equation around allows the site owner to calculate the highest CPC that they will tolerate, for their product price and conversion rate.

Google AdSense and Google AdWords

A final word, since this is a keyword research blog, on AdWords and AdSense.

Google AdWords works by allowing site owners to bid on keywords. The more bidders there are, the higher the CPC. Then, the Google AdSense system is used to display adverts on pages which seem to match the keywords in content and context. The owner of the site running the advert then gets paid a (small) portion of the CPC.

So, when researching keywords, it often pays to look at the Google AdWords Keyword Tool and check the CPC. It's a great indicator of keyword value, be it for an AdSense affiliate, or an AdWords advertiser.

Specifically, the AdSense and Keyword Research Guide gives direct instructions from both sides of the marketing fence.

Until next time,
Guy

Using AdSense CPC with Search Volume

How to properly leverage the AdWords Keyword Tool Keyword Research Results

This article highlights techniques for using the AdSense Keyword Tool as a keyword research resource, using both CPC and Search Volumes effectively - and why you need to use both!

Regulars here at the KeywordCracker blog will know that I often preach that the CPC column in the Google AdWords Keyword Research Tool is the best way to gauge the profitability of a keyword or keyword phrase. Of course, this works well for beginners, but some of us want to master AdSense, as well as drill down onto keywords that will enrich us via other revenue streams.

If you only look at AdSense revenue, of course, CPC remains a good indicator; after all the higher the CPC, the more the keyword will make when a visitor clicks on it. And since you are using the Keyword Cracker methodology, you know where the tipover point is, as well as the anticipated conversion rate for both the keyword phrase, and other products on the page. From a purely revenue point of view, this is enough for a throwaway site.

However, if you are building for long term visibility and wealth generation, the equation shifts slightly.

Now, not only do you want to know how much a keyword will pay (relative to other keywords, of course), you also want to know what the traffic will be on that keyword. In addition, it would be nice to know where the tipover for the whole keyword set is. In other words - which keyword has to take priority, based on current and historical search volumes?

Luckily, Google have made this really easy for us. The first thing to do is export the keywords to a spreadsheet. That could be a Google Document, OpenOffice Calc spreadsheet, or an Excel sheet; it's not important. What is important is to make sure that you have exported the CPC, Search Volume, and Average Search Volume, along with the Advertiser Competition.

These are the four metrics that you will use to create a 'score' for each keyword phrase.

I have been fooling around with this for a while, and I think I have found a good combination which yields the most profitable keywords, and at the same time, identifies those that will offer long term wealth. But it's a moving target, and has to be recalculated every month as seasonal demands change.

And don't be fooled - every single keyword phrase can be subject to seasonal shifts, not just the traditional ones like weight loss, diets, sunglasses and vacation destinations.

My current formula multiplies the CPC by the Advertiser Competition, and multiples that by the average search volume over three months in the same period of the previous year. The result of this multiplication is then weighted by last months search volumes, where available.

I'll keep you posted as to how that gets on!

Learn more about this topic in 'The Adsense and Keyword Research Guide'.

Until next time,
Guy

The KeywordCracker
'The Adsense and Keyword Research Guide'

Making Money with Keyword Research

Web Marketing and Money Making Tips from SEO, PPC and Business Strategy Guru.

Marketing tips and ways to increase income using keyword research, SEO, PPC and everything else you are already doing.

Nothing you do online should ever be a one-shot activity.

If you write a blog entry (like this one), then it should be done with re-use in mind. If you write articles, they should be easy to rewrite as blogs. Any Yahoo! Answers question that you answer can itself become an article or blog entry, and vice-versa. The same goes for forums posts, emails, phone calls, etc.

Over time, this will all bring great search engine marketing dividends; but how does keyword research fit in to this 'monetize everything' strategy?

Here are a few key ideas:

• Single keyword lists - multiple uses;
• AdSense / AdWords arbitrage;
• Content themeing;
• PLR resource creation;
• etc.

Do you see a pattern? It starts with the keyword research, expands with knowledge about the keywords being used to describe the niche, and spreads into wider knowledge about the subject. Before you know it - you're an expert, and another people will pay you for the niche knowledge that your research has thrown up.

Let's take these one point at a time.

A keyword list (such as you might download from Google AdSense) of around 100 - 150 words contains information that can be used for different things. For example, sorted by PPC value, it tells you how much you can make from clicks on adverts related to the keyword phrase. Sorted by average search traffic, it tells you how many visitors, comparatively, you might expect for a set of keyword phrases.

It's the same list, sorted two different ways. So, learn how to use a spreadsheet like OpenOffice.org, or Excel, and start making multiple uses of the same data. This is key to the Keyword Cracker mentality, spelled out in the acclaimed eBook 'AdSense and Keyword Research Guide'.

In that list, you might spot anomalies which indicate an arbitrage opportunity. For example, in my list 'adwords keyword research' has a PPC value of $0.05 which means that for every 1,000 visitors that click my link, I will pay $50. Now, if I have a product with a good sales page that converts at around 10-15%, and sells for $37, then I can make $3,700 from that $50. This is a good ratio, but there's more.

My research also tells me that 'adwords' appears in items with a PPC of around $16. So, even if my product fails to make a sale, some of the visitors are bound to click on related adverts displayed to them on the exit page, or a popup/under. I only need a few tens of those to click through to recoup my original $50 : it's a kind of safety net.

Now that I've started looking at AdSense and AdWords in my keyword list, it would be silly not to theme some content around the keywords. After all, sorting the same list by Advertiser Competition reveals what the industry thinks is important : 'AdWords', 'Pay Per Click Optimization', 'AdWords Advertising', 'AdWords Marketing', and 'Search Engine Marketing' are the top 5.

Now, I happen to know enough about all 5 to write 5 articles, and create a themed web of content around them; off the top of my head. And, I can even allow people to customize them and use them for their own site (the PLR angle). If I write 5 tightly focussed, 400-600 word articles (like this one), optimized for keyword phrases that Google reports as having a PPC of $5 to $10 per click, all with above average search engine traffic, how much would you pay for them? $10 the set? $15? $20?

If I make just two or three sales per 1,000 clicks, my time has been worthwhile.

Put all these streams together, and one little bit of research will pay dividends.

To your continued success with Keyword Research,
Guy

The Keyword Cracker
Get the acclaimed 'AdSense Keyword Research Guide'

Keyword Research Mistake That's Costing You $$$

Most people who use keyword research make the same basic mistake. They think they're doing everything right, but they inevitably leave one aspect to one side. In their admirable quest to provide quality content (good) in a popular niche (excellent), they neglect to take the extra step...

...and look for "Buyers Keywords".

A buyers keyword is one that indicates that the visitor is in a buying frame of mind. They know what they want, and are ready to buy it from the site that can offer it. It's a niche long tail keyword phrase with real earning power.

Learn how to research keyword phrases that really pull in the orders (or AdSense clicks!) in the Keyword Cracker eBook. I'll give you a clue : 'nokia n65 leather case' is, and 'cell phones' isn't.

Have a great weekend.
Guy

Secrets of an AdWords Professional

Pay Per Click Optimization and AdWords Marketing Guru Reveals All!

In this post, read the top tips from an AdWords professional, learn all about pay per click optimization and AdWords marketing, and follow some simple steps to success...

Google AdSense and AdWords are two sides to the world's most popular, influential, and widespread pay per click (PPC) advertising platform. Content creators can use AdSense to generate income, whilst online sellers can deploy AdWords as their PPC traffic generation mechanism.

AdWords and AdSense are also linked to Google search too, which means that keyword researchers can use the same tools that AdWords professionals use to target their keywords accurately to optimize their content for search engine marketing.

The goal of the AdWords professional is to use pay per click optimization and PPC keyword research to get the best return on investment for their clients, but also to use the techniques to deploy their own content to attract attention in their chosen niche.

It requires some careful tracking, management, and some clever manipulation of the tools Google makes available to it's users to achieve the best effects. But when they come together, the results are outstanding - whatever the final goal:

• Great search engine placement
• Naturally occurring Web 2.0 promotion
• AdSense revenue generation
• AdWords keyword campaign ROI

Part of the whole process involves making sure that the pay per click results are carefully optimized.

Pay Per Click Optimization

Running an efficient AdWords campaign means getting the most clicks (actions) from the investment. This usually means making sure that the revenue from each action - on average - outstrips the cost of obtaining that action (the _pay_ in PPC).

For a low margin product, such as AdSense income through advertising (a.k.a AdWords / AdSense arbitrage), the cost per click (CPC in the Google AdWords Keyword Tool), must be minimized, while the expected CPC from AdSense income must be maximized.

High margin products, on the other hand, might pull in enough money that a high CPC can still reap benefits. If the conversion rate is 10%, for example, and the CPC is $10 (easy numbers), then the cost of a single sale is 10 x 10, or $100. So, the margin has to be higher than $100 on each product in order for the AdWords campaign to break even.

And, it goes without saying that the keywords have to be logically connected for the entry and exit points of the system. It is no good paying for cheap AdWords that have nothing to do with the content / product on sale.

AdWords Marketing and Search Engine Marketing

The other side to the technique is as a way to get great search engine rankings using the PPC paradigm and Google AdWords. Here the trick is to leverage the AdWords and AdSense tools to research keywords that have actually been used in real Google searches, and at the same time, are being targeted by advertisers. The result ought to be content that is heavily weighted in favor of good natural search engine rankings.

So, from the point of view of an AdWords professional, anyone can use pay per click optimization techniques to help deliver more traffic. And because it concentrates on AdWords marketing, the result is content that is heavily optimized towards search engine marketing, as well. Using pay per click advertising services such as Google AdWords as a form of keyword research is a key secret to traffic success on the world wide web.

The Keyword Cracker
Get the acclaimed 'AdSense Keyword Research Guide'