The High Cost of (Bad) PPC

Every internet marketing professional knows how successful good PPC can be, in terms of delivering increased traffic, improved conversion, and better targeted marketing spend.

However, performed badly, PPC can end up being very expensive, so it is worth spending some time and analysis on getting it right.

Site owners often think that doing PPC is just a matter of getting a Google AdWords account, plugging in some relevant search terms, setting a maximum weekly or monthly budget, and sitting back and watching the clicks roll in.  

It is not as simple as that.  For PPC to be cost effective over time, you need to know a number of things:

* What is your current conversion rate? If you cannot track this, you will never be able to work out if PPC is driving additional sales.

* What is your average lifetime value of a customer? Just because PPC gets you some short-term sales, is it converting into long-term value?

* What is your cost per acquisition, and how high can this go before it becomes unacceptable? You need to know at what point paying for in demand keywords becomes unsustainable.  

If you do not know these numbers, then you risk spending high on targeted PPC campaigns that get you short-term clicks and sales but that over time cost you more in acquisition costs than you make in profit - which is not sustainable for any business.  

Implemented correctly, PPC (especially in conjunction with good SEO) can give both short term and long term profits a boost, but do your homework first!