Advertising, Marketing Strategy

How to Make Google Pay-Per-Click Advertising Cost-Effective

For marketers, Google pay-per-click (PPC) advertising options can seem confusing, overwhelming, and expensive. Here’s how to make the choices that make this type of advertising cost-effective.

Source: TarikVision / iStock / Getty

In reading reviews and articles about Google PPC advertising, opinions are all over the place. However, many that are negative are related to the results as compared with the cost of the advertising. When you can set a budget and target your audience—and only pay when someone clicks to your site—it’s hard to understand why so many find PPC to be too expensive for results.

Competitive PPC Bidding Is Only Part of the Picture

Most advertisers understand that they’ll have to tell Google the most they’re willing to pay for a click, which is a number that competes with their competition. If this is all you know, you would assume that the more you bid, the higher you’ll display in paid results and the higher you’ll rank over your competition. Although that’s the belief, it’s not the reality if you understand Google’s ad scoring and pricing algorithms.

Your Google PPC Ad’s Quality Score

When you first place an ad, your position in the paid results is almost completely related to your bid and the bids of your competitors for the chosen keywords and phrases. At the start, that’s all Google has to work with. But as time passes, data are gathered that Google uses to compute a quality score for your ad. As your score changes, your cost per click changes, as well, no matter what your maximum cost-per-click bid amount is. In other words, if Google likes your ad, your cost will go down, while your position in paid search results will actually get higher. That’s a better position for your ad for less money than some competitors who are paying more! Let’s take a look at some of the things Google is scoring:

Click Through Ratio (CTR)

CTR is the ratio of the number of clicks you get on your ad to the number of times it is displayed (impressions). If your ad is consistently getting clicked more than those of competitors (higher CTR), your cost per click will go down, while your position in results goes up. What would make your ad more “clickable”? It’s all in the wording of the title and ad text. You are competing for the eyes and attention of searchers, and those ads that catch their eye and get them to click will score better.

Searcher Activity on Your Website

Once a searcher clicks on your ad and gets to your site, Google gathers data on what he or she does and where he or she goes. If this individual immediately leaves the site, it means he or she didn’t find what he or she expected from your ad—and Google doesn’t like that. If searchers stay on your site awhile, you benefit, and if they click on other pages or links in your site, you get more benefits. If they take action, such as submitting a form, Google likes it even more.

There are other things Google keeps secret, but you get the idea. Google wants its searchers to keep using Google, which means getting the information they want quickly and easily when they get to a site. So, when you’re doing well with the two aspects above, your ad quality score increases.

When your ad’s quality score is higher than that of one or more of your competitors, your ad will move up in the results, and your cost per click will decrease. Yes, you’ll pay less for a better position! Google knows that your ad is doing more for its searchers, and you’re rewarded for it.

If you take the time to test different ad titles and wording, you can find one that does best with CTR. Then, make sure that visitors find what they want on the page your ad takes them to. You’ll begin to see your cost per click decrease and your position go up.