Pay per click advertisting systems such as Google Awords, Yahoo, or MSN can be used to market your website. Poor marketing and poor ads combined with any pay per click search engine can cost you dearly in hundreds of dollars of wasted advertising dollars. A proper and successful advertising campaign relies on a few elements. Proper keyword selection, effective ad writing, and proper ad targeting.

All three are too involved to put in one article and deserve the attention we cannot give here. What we can do is help you pick which market is your most cost effective market to focus on and which keywords you should spend your advertising dollars on.

Pick a group of keyword you would like to bid on for your ads. Now determine the bid you are willing to pay for each of those keywords and write them down on a piece of paper. Next, write the average dollar amount brought in by each sale from that ad. For instance, let's say you sell surf boards and want to target the keyword 'surfboards' and are willing to pay $1.00 for each click from your favorite search engine. For each visitor that clicks on your 'surfboard' ad and makes a purchase spends on average $75. Estimating how much a typically visitor is easier if your business has been established for sometime and you have a reasonable amount of business. If not, then just make a reasonable estimate of what you think a typical sale amount would be.

Now that you have the keywords and average amount of revenue per buying visitor we can switch the the math. Don't worry, it's nothing involved, in fact its very simple, so simple I think you will be amazed at the simplicity of the forumla and what it can tell you.



As you can see our formula is simply the cost per click (CPC) divided by the average sale amount for the keyword. The result is the percentage of clicks from your search marketing ads that need to be converted into a sale in order for you to remain profitable for the keyword.

So in our surfboard example our cost per click is $1.00 divided by the revenue for each click that results in a sale. Our average sale price on visitors coming to our site on the keyword 'surfboards' is $75. Plug that into the formula and we learn that if we bid on the keyword 'surfboards' we need to have a click to purchase rate of 1.3% or we will lose money.

It may not seem like a big revelation to you, but it can help you decide it will be profitable for you to target the expensive keyword to get the number one spot on the search engine ad rankings or if you would be better of targeting a less costly keyword that might also bring in higher revenues. Use of website tracking software such as Google Analytics can help you track where your visitors so you can start to see what keywords are performing the best for you. The extra effort it takes to track your visitors will pay off big by not wasting money on ads and keywords that do not convert into a sale.