Pay-Per-click (PPC) advertising

Pay-Per-click (PPC) advertising is one of the best ways to generate targeted traffic quickly to a website.

The ads will bring in visitors who are already looking for the kind of products the business is marketing. A similar result using SEO would require much more time.

When an online user enters a query for a particular set of keywords (says ‘best camping tent’), the company’s paid ad targeting those keyword phrase could appear in sponsored results in the Search Engine results pages (the result pages will also include other web page links organically ranking for these keywords).

Chances of the company’s Kathmandu’s ad ranking on top of the sponsored search results will depend on a few factors, including the amount the company bids for each keyword, and the company’s overall Quality Score (Google’s rating of the quality and relevance of the keywords and PPC ads).

The company may use PPC advertising to promote their best-selling camping tents, and offer a discount (limited-time offer) if bought before the month-end.

keywords: best camping tent, how to pitch a camping tent, camping tent review

While calculating the ideal max CPC is difficult, as one doesn’t have a control over how much the competitor will bid and their quality score, there’s a method to ensure you pay reasonable amount per click.

The company may already know the conversion rate on its best-selling product pages (how many products are bought per hundred visitors). For example, if the conversion rate is 2% and if the profit per customer is $10, the ideal (or the break-even) CPC would be $10 x 0.02 = $0.2. So, for this example, the max CPC should be kept around that number.

In general, the ads should be placed at a level where they can be profitable at your ideal Max CPC. The factors that usually limit or hold back profits include the conversion rate of the website and the profit margin (price of the product/service).

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