PPC Advertising Explained

By Peter Gold

January 2013

Content

• Definitions.• Examples.• Intent vs. interrupt.• Setting a campaign budget.• CPC vs. CPM.• Managing a campaign budget.

Definitions• PPC = pay per click.• CPC = cost per click. (same as PPC!)

• CPM = cost per 1,000 impressions.• Impressions = view of an advert.• CTR = click through rate.• CTR% = click through rate %.• Conversion = desired result e.g. apply.

Intent vs. interrupt

• Google users have intent e.g. iPhone cover:– Cheap iPhone covers. Buy one get one free.

• Social network users are there to chat:– Let me interrupt your conversation.– Would you like a cheap iPhone cover?– Oh you don’t have an iPhone! Sorry

B2B ads

Recruitment ads

Setting a campaign budget

• You want 25 applicants. • Assume 90% drop off = 25 applicants.• Therefore you need 250 clicks to your job.• CPC is £3 = £750 but ONLY if you get the

clicks.• Would CPM be cheaper?

Calculations – 1% CTR

• 25,000 impressions x 1% CTR = 250 clicks x £3 CPC = £750.

BUT

• 25,000 impressions x 1% CTR = 250 clicks x £3 CPM (x25) = £75 = £0.30 CPC!!

Calculations – 0.1% CTR

• 250,000 impressions x 0.1% CTR = 250 clicks x £3 CPC = £750.

BUT

• 250,000 impressions x 1% CTR = 250 clicks x £3 CPM (x250) = £750 = £3.00 CPC!!

Managing a campaign budget

• Start with CPC as it is controlled.• Monitor as CPC may reduce (FB mainly).• When ad slows (ad fatigue) swap to CPM.• Ad shown as advertiser earning again!• Monitor for ad fatigue as cost continues.• Campaign will last 6-8 weeks.

Contact me

E-mail: petergold@hirestrategies.co.uk

Tel: 01822 811051