Two Things You Should Understand Before Using Adwords

PPC Tip #1: you've got to know your numbers.

Pay per click is all about numbers. The 2 basic numbers are:

Cost per sale = Cost per click * sales conversion rate

Value of sale = average profit per sale from PPC

If Cost Per Sale < Value of Sale, you've got a profitable pay per click ad.

PPC Tip #2: break down your keywords into small groups

In PPC tip #1, I told you what the basic equation is. There's some bad news, to use the equation properly, you need to calculate the "Cost per sale" and "Value of Sale" for each set of keywords you are using.

This is because different key phrases will convert at different rates once they reach your website.

Now, this is obviously true if you are running different ads for different products. But it is also true if you are running different ads for the same product.

It works like this, what someone types into Google reflects what they are looking for and what level of interest they have. If they type different phrases, they are either looking for different things, or they're in a different stage of the buying process. So, not every click is equal.

So, group your keywords into small, closely associated groups and make sure you track the numbers for each group so you know which ads are bringing in a profit and which are losing you money.

Steve Gibson

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