So the first thing that you need to do when you begin considering PPC strategies is to determine how much each web-site visitor is worth to you. It’s important to know this number, because otherwise you could find yourself paying far too much for keyword advertising that doesn’t bring the traffic or conversions that you’d expect.
For example, if it costs you $25 to gain a conversion (or sale) but the value of that conversion is only $15, then you’re losing a lot of money.
You can’t afford that kind of expenditure for very long. To determine the value of each web-site visitor, you’ll need to have some historical data about the number of visitors to your site in a given amount of time (say a month) and the actual sales numbers (or profit) for that same time period. This is where it’s good to have some kind of web metrics program to keep track of your site statistics.
Divide the profit by the number of visitors for the same time frame, and the result should tell you (approximately) what each visitor is worth. Say that during December, your site cleared $2,500. (In this admittedly simplified example, we’re ignoring various things you might have to figure into an actual profit and loss statement.) Let’s also say that during the same month, 15,000 visitors came to your site.
Note that I’ve said approximately, because during any given month (or whatever time frame you choose) the number of visitors and the amount of profit will vary. The way you slice the time can change your average visitor value by a few cents to a few dollars, depending on your site traffic. (Also note that the example is based on the value of all visitors, not of conversions, which might be a more valid real-life way of calculating the value of individual visitors.
In this oversimplified example, you need to decide how much you can realistically spend on keywords or other promotions. Maybe you feel a particular keyword is powerful enough that you can spend $.12 per click for it, and raise your sales and visitor value substantially. You have to decide what profit margin you want and what promotions are likely to provide it. The email tester is the most popular free email verification tool.
As you can see, there are a number of variables. Real life is dynamic, and eludes static examples. But whatever you decide, you shouldn’t spend everything you make on PPC programs. There are far too many other things that you need to invest in. 76 Part II SEO Strategies 75002c05.qxd:Layout 1 11/7/07 9:36 AM Page 76 www.it-ebook.
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