[Internet Marketing] Managing Your Pay Per Click Provider

Features - Business Strategy

Knowing the basics of pay per click can help you determine how hard your provider is working for you.

May 28, 2013
Justin Sous

The terms “Internet marketing,” “search engine optimization” (SEO), and “pay per click” (PPC) advertising all seem to yield some kind of discomfort for business owners. This might be driven from the lack of knowledge on the subject and an unsettling feeling of not knowing how to properly manage an Internet marketing provider. After all, PCOs have their own businesses to run — who has time in their day to learn about the intricacies of PPC and SEO?

It’s worth knowing the basics. With a bit of knowledge, a pest control company can successfully manage its PPC advertising provider, putting minds at ease that the account is performing as it should.

Click-through Rate. The Click-through rate (CTR) may be the most important statistic in all of your Internet marketing. It demonstrates the rate at which you’re bringing paid traffic to your website, and it can also help you determine how hard your provider is working for you. In almost all cases, the higher the CTR, the better. If you’re generating traffic at a higher rate, then you’re generating leads at a higher rate, as long as you’re converting visitors to customers at the same time.

Remember, if your CTR improves from, say, 2 percent to 6 percent, that’s not a 4 percent increase — it’s a 200 percent increase. This means you’re bringing three times as much traffic to your website and potentially generating three times as many leads (with conversion remaining constant).

CTR is also important because it’s a major piece of the Google AdWords ranking algorithm. Maintaining a high CTR increases your quality score and allows you to bid less on the keywords you advertise for. This is the best way to fight the natural progression of an increasing cost per click. Make sure your provider is doing the best they can to keep your costs low, especially if their fee is determined by your total ad spend.

What Makes Up CTR?
Click-through rate is defined as “clicks divided by impressions.” In other words, it’s how many times your ad was clicked on (clicks) divided by the number of times your ad was shown on a search results page with an opportunity to be clicked on (impressions). When a user searches for something that matches one of the keywords in your account, your ad shows on the page and creates an impression, giving them the opportunity to click on your ad.

A common question, then, is this: What is considered to be a good CTR? If your provider tells you that a 1-3 percent CTR is good, this should be a red flag — this is a poor range to fall in, and for pest control, CTR can exceed double digits. It’s a matter of rolling up your sleeves, putting in the time, writing some creative ad copy and knowing how to properly organize an account to maximize potential. Sometimes PPC providers get away with a low rate because their clients have nothing for comparison.

CTR depends on a number of different factors: the industry, the service area, the account’s goals, the time of year (for instance, seasonal pests). Consider the following:

  • Industry: For example, advertising in pest control may be more or less competitive than advertising for laptop computers. In each case, a certain CTR may be considered good or poor.
  • Service Area: Certain metropolitan areas are more competitive than others. This means that with a higher level of competition (more pest control companies in a given area), costs may be elevated and superior CTRs may be more difficult to achieve.
  • Account Goals: If an account’s goal is something other than to generate leads, then CTR may be less of a concern — an account’s goal may be branding, for instance.
  • Time of Year: Some pests may be easier or harder for you to achieve high CTRs, so if you’re properly scheduling your advertising by season, you may see CTRs fluctuate through the year as certain pests come and go.
  • Unique Situations: If a business has a poor or absent organic presence, they may choose to bid on their own branded keywords, like their business name. These keywords tend to inflate an account’s CTR.
  • Network: The majority of your advertising should be on the search network, meaning your ads will only show up on a Google search results page. If this is the network you’re using, beware of companies who tell you to expect a 1-2 percent CTR. Double digit CTRs are attainable and should be sought after.

The Bottom Line.
With some basic knowledge, you’ll be able to keep your provider accountable by continually checking CTR on a biweekly or monthly basis. As you see CTR fluctuate, you should also be monitoring your cost per lead (CPL). You always want to be aware of how many leads you received and how much they cost you. If managed correctly, an increasing CTR should increase the quantity of leads and lower your CPL.

The author is a New Jersey-based search consultant for A Second Opinion, where he provides pay per click solutions for small businesses around the country. He can be reached at jsous@giemedia.com.