Source: Based on Google Adwords™ advertising programme Traffic Estimator.
Each PPC keyphrase ideally needs to be managed individually in order to make sure that the bid (amount per click) remains competitive in order to show up in the top of the results. Experienced PPC marketers broaden the range of keyphrases to include lower-volume phrases. Since each advertiser will typically manage thousands of keywords to generate clickthroughs, manual bidding soon becomes impractical.
Some search engines include their own bid management tools, but if an organisation is using different pay-per-click services such as Overture, Espotting and Google, it makes sense to use a single tool to manage them all. It also makes comparison of performance easier too. Bid management software such as Atlas One Point (www.atlasonepoint.com) and BidBuddy (www.bidbuddy.co.uk) can be used across a range of PPC services to manage keyphrases across multiple PPC ad networks and optimise the costs of search engine advertising. The current CPC is regularly reviewed and your bid is reduced or increased to maintain the position you want according to different strategies and ROI limits with amounts capped such that advertisers do not pay more than the maximum they have deposited.
As more marketers have become aware of the benefits of PPC, competition has increased and this has driven up the cost-per-click (CPC) and so reduced its profitability.
Beware of the fake clicks!
Whenever the principle of PPC marketing is described to marketers, very soon a light bulb comes on and they ask, 'so we can click on competitors and bankrupt them'? Well, actually, no. The PPC ad networks detect multiple clicks from the same computer (IP address) and say they filter them out. However, there are techniques to mimic multiple clicks from different locations such as software tools to fake clicks and even services where you can pay a team of people across the world to click on these links. It is estimated that in competitive markets 1 in 5 of the clicks may be fake. While this can be factored into the conversion rates you will achieve, ultimately this could destroy PPC advertising.
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