In using pay per click advertising, you also need to track if your advertising is working. One way to do this is the conversion counter which track sales and conversions. It lets you test and measure very quickly what advertisement is working.
A conversion counter is a free tool that is provided to the advertisers. It tracks the number of conversions generated from your keywords. This conversion occurs when the searcher who enters your site will perform your desired action, such as buying your product or service or signing up on your site.
Both Google Adwords and Yahoo Search Marketing have conversion counters offered free to use to their advertisers. This tool which helps you measure the conversion of your advertising is very easy to install. To use a conversion counter in Yahoo Search Marketing, you will need to sign up for it in the control panel then copy the HTML code into one particular page of your site, preferably the sales confirmation page. But it can also track down other conversations such as registrations, newsletter sign-ups and others. It tracks the number of conversions and break down this information into useful reports which can lead you to your marketing success.
After having all these information then you should be able to calculate how much you are going to pay to each visitor on your website. You need to determine your maximum cost per click in order for you to gain a maximum profit on your product or service.
Advertisers must truly understand the conversion rate so that they will not be spending more on advertising than profits produced. Conversion rate is the total number of buyers divided by the total number of visitors. For example, if you only have 1 buyer out of your 100 visitors then your conversion rate is 1% (1/100). 1 is the buyer and 100 are the visitors.
Of course any advertiser would like to have a high conversion rate. One thing which can ensure you of having a desirable conversion rate would be to make sure that you advertising is in line of your landing page. This can make you visitors find what they really want and buy your product or service.
In our example, your conversion rate is 1% and your profit for selling a product is $ 50.00, then we multiply the conversion rate by the profit the result would be $ 0.50. (1% x $ 50.00) The maximum bid price for your product should be $ 0.50. Because you have 100 visitors, you will pay $ 50.00. ($0.50x100) So you will break even from your profit if your bid is $ 0.50 per click and your profit of your product is $ 50.00. But if you bid $ 5.00 and your conversion rate is only 1% then you will lose money.
You can start with no conversion data to rely on for a few days. After a few days of data gathering you will now have the information needed such as the click through rates and the conversion rates. At this time you will be able to determine whether to bid high or low to achieve an optimum Return on Investment (ROI). |
