The Internet is a bit different. People use the Internet to search for information, entertainment, or services but don’t do so in crowds. There are over 16 million websites on the Internet so how do you make your site seen and relevant. Why spend thousands or even a few dollars on a website if you’ll never generate any “foot traffic”?

Most Internet Businesses Fail

Many years ago, in the early days of the internet, I decided it might be a good idea to start an internet business. I created a site with lots of content investing weeks of time adding all the products associated. In the end, I had a great website with competitive prices. My problem? NOBODY knew about my site. Finding my site, even back in 1998 was like finding a needle in a haystack. I knew little about promoting my site and generating the “foot traffic” and interest necessary to attract regular customers and make a profit. I learned a great deal, didn’t lose too much money, but I decided it wasn’t working and shut it down. This is the fate of most internet businesses. 99% of small business websites fail and is referred to as “churn” by web hosting companies. The “churn rate” is a strong indication of the failure rate.

There’s More to Online Profits than Having a Website

Many businesses assume they can just build a great website and people will flock to their store, and with little effort, customers will find them. They may even spend thousands of dollars hiring a professional web designer to ensure their Internet presence puts forward a professional appearance. The spectacular looking website is just a work of art for the owner to admire, however, if it does not generate any business. There is so much more to earning money or attracting clients from the web than merely establishing an online presence or having a “sexy” site.

Really Bad Ideas

Many places will sell bulk website traffic at what seems like low cost per visitor. This doesn’t work. Most operate by driving people to your site through pop-ups or redirecting them through popular domain names. Bottom line: Most people close pop-ups or block them altogether since they are such a nuisance and are not interested in sites they didn’t intend to visit. I’ve tested the effectiveness of many sites that supposedly deliver “targeted” traffic. You’ll get lots of clicks but no sales. The price is not low if you get no return on investment.

What about mass e-mails (aka “SPAM”)? I hope it goes without saying that this is the worst idea of all. Nearly 75% of all e-mail on the Internet today is SPAM. What do you do with SPAM? It’s a nuisance and you’re more likely to sully your reputation than benefit from this dubious method.

Beware of just paying for ads on Search Engines if you don’t know what you’re doing. You may drive some targeted traffic to your site but you can quickly spend more on advertising than you gain from the income of new customers. You need to learn the basics and know what you’re doing. You can make a lot of money on the Internet if you learn the ropes but, correspondingly, you can waste a lot of money on bad techniques.

Lots of bad ideas but how do you make your site sell and turn a profit on the internet?

What Works?

There are essentially four fundamental realities to using the web to provide information and driving interested traffic your way:

1.  Online, people search for information, look for solutions — they are not looking for you. Give them what they want by converting your knowledge into high-quality, in-demand CONTENT.

2. To generate traffic, you need to develop theme-based sites with keyword based pages that are attractive to search engines and the people looking for your informaiton. Your theme-based topical content ranks high at the Search Engines, attracting free, targeted TRAFFIC… interested, open-to-you visitors.

3. Provide free information that people can use. Establish yourself as a trusted source and not simply some shill trying to get them to buy something. Create content about which you have passion and knowledge in that others can benefit from. Develop trust and confidence (“PREsell”) by OVERdelivering relevant, original, high-value information to these motivated pre-customers.

4. Send your warm, willing-to-buy visitors to the goods and services you trust and use yourself. Sell hard goods, e-goods, your personal or professional services… or all three. Or become a “pure infopreneur” and earn substantial income without selling at all, through Google Ads, affiliate fees, finder’s fees and other techniques.

Site Build It!

I was searching around the Internet for some marketing tools and came upon an approach called Site Build It! (aka SBI!). The creator Ken Envoy has, in my estimation, created a product suite that allows businesses and individuals to quickly and easily create websites that generate target traffic. His company offers free eBook downloads that explain the how-to’s for free. You can benefit from reading these eBooks alone but the real strength of his product line are the integrated tools that come from hosting a website with the company.

Businesses can follow the step-by-step C-T-P-M process, using SBI!’s complete set of site-building-&-marketing tools. No HTML, FTP, CGI, graphic or programming skills needed (although SBI! is compatible with html editors if you have html experience) No Search Engine expertise required — no expensive tech, Web or graphic consultants necessary. The complete set of tools make it easy to build, market, and manage your site effectively.

SiteSell has detailed proof that their system works, comparing their product performance against other well known small business and affiliate methodologies. You can go to their question page to seek more help.

Being Excellent in the Basics – A Division Commander, in preparing his Division for war, enjoined his subordinates to “Excel in the Basics”. It is the small things in battle, and in life, that if done poorly will lead to failure. You can learn a lot of advanced tricks to take you beyond the basics but the basics must always be followed properly as a foundation to build upon. Forget the basics and the foundation crumbles. Even the best musicians practice their scales daily. I really believe that the SiteSell stuff, while basic, distills the essence of what makes web pages successful. Don’t move on to anything advanced until you’ve excelled in the basics.

The SEO Book

After I got an up and rolling website with SBI and learned many of the strategies, I found that there were some “blanks” in the information provided – particularly with regard to some strategies regarding link exchange, directories, and Pay Per Click (PPC) networks. Don’t get me wrong, SBI is an essential first step to get you moving in the right direction of building a content rich website. I use their site manager and hosting services.

I needed some additional, advanced SEO strategies to build relevant inbound links and figure out the inner workings of some of the Pay Per Click Networks and found Aaron Wall’s SEOBook. He has some great information regarding search engine optimization and pay-per-click search engines. Check out his site at Search-Marketing.info and decide for yourself but I highly recommend his SEO book as a very satisfied customer.

Is it difficult to succeed as an Affiliate? Not really depending upon your definition of success. It is quite easy to do very little work and make a few extra bucks promoting products to your friends and family.

What about a steady cash stream? This is very possible – some of the top performers earn over $250,000 a year just from affiliate programs. They are doing much more than telling friends and family.

Affiliate success boils down to this:

• Build a website
• Write content on a subject you have a passion for that will inform and interest visitors
• Partner with companies and enroll only in the affiliate programs you truly believe in that sell goods and services related to your content
• Recommend the products and services to the visitors of your site
• Earn a commission for every sale

There is a lot of software and information on the internet selling help on how to succeed with affiliate programs. Most are overpriced and do not work. I will only recommend to you the two products I have found successful for affiliate success: SiteSell and the SEOBook. SiteSell will introduce you to building a content-rich site based on finding a niche in the Internet. They have great research tools and an all-in-one site manager and hosting system that allows you to build and promote your website. SiteSell has detailed proof of results, comparing their product performance against other well known small business and affiliate sites.

The SEOBook provides more advanced Pay Per Click and SEO concepts, although the book does provide great supplemental material on how to build your site. I would recommend both but if you can only afford one up front then go with SiteSell to get started.

If you think either or both are too expensive then come back in a month after trying to advertise on the Internet without educating yourself and see how expensive SEO can be without a plan. Consider that 99% of business websites fail. Start with their free resources and move on from there. Their testimonials speak for themselves.

Why Promote?

The strength of the Internet is also its weakness – there is just so much information – not only good information but bad information as well. There are literally over 50 million websites on the Internet. It is both difficult to find the information you want and it is nigh impossible for users to find you unless they either stumble upon your website URL or find your site in a Search Engine.

There was an interesting experiment conducted in 2003 in Amsterdam. Using GPS to track the movement of a few hundred people over a one month period, the experimenters mapped where the subjects had travelled over that month. The results showed that there were “well worn” routes that nearly all people travelled in the city with many of the side streets and locales in Amsterdam nearly unvisited.

The same is true of the Internet. Although there are literally millions of “locales” and “roads” we could travel on the Internet, the top 20 websites receive over 90% of all Internet traffic! There are certainly more than enough visitors to go around for the remainin 10% to be significant but webmasters ought to have no illusions that people are just looking for your site – they are not unless you promote it.

Search Engine Submission

Search engines are so ubiquitous that it is a waste of time to describe what they are. What is misunderstood about them is how to promote your site using them. First, there are tons of free site submission tools to get your website included at hundreds of search engines throughout the world. You can also pay companies who will submit your site for you to the over 800 search engines that exist worldwide.

The fallacy is that simply submitting you site to a search engine will result in the traffic you desire. In fact, you may not drive a single interested visitor or customer to your site by just submitting the site to search engines. We would all like to have our site “bubble to the top” every time a surfer makes an Internet search related to our website. The truth is that there are likely many dozens or hundreds of other sites broadly related to the same topic. Search engines try to provide the most relevant and popular links that will provide their customers the information they need.

My advice: Use the site submission tools that are free but don’t pay for site submission until you’ve built relevant content that will build popularity.

Becoming Relevant

The key to becoming “relevant” to a search is building “keyword” driven web pages that over-deliver on the type of content that a user is looking for. These keyword pages ought to be woven together into an overall site concept that ties together the keyword topics that people will be looking for that you wish to serve. SiteBuildIt! and the SEOBook are the best guides I know of to providing advice on how to build keyword based sites and provides Brainstorming tools on the best keywords to focus on. I use them both. SBI is a nice resource for beginners while the SEOBook provides more in depth strategies once you get rolling.

Becoming Popular

On the internet, you’ll need to buy your friends. Until you become so relevant and popular that you will appear in the top 10 of the keywords you want to serve, you will need to promote your site. Your page ranking on search engines will increase as you receive more visitors and, especially, as your visitors start linking their own pages to yours because you provide such great information. Beware of who you engage in reciprocal link exchange with. Ensure the sites are relevant to your content and that they will not bring disrepute upon you. Linking to everybody that asks you to is not wise. Be patient, be selective. There is no shortcut to real relevance so don’t become link crazy – focus on content. There are also a number of free directories you can list with (more on that later).

Some Tips on Advertising

(See my Pay Per Click Advertising Guide for more details)

1. List with several advertisers to blanket your ad across the Internet.

2. Use the conversion tools provided by the advertising engines to determine which ads are generating revenue. Web advertising can become very expensive so drop the ads or advertisers that don’t make you money.

3. Use very targeted keywords as opposed to very general terms. You may drive more traffic to your site but if the visitors are disinterested you might be wasting money on the wrong demographic. For instance, if you are a children’s shoe store, you may find that you are paying for far too many clicks per customer sale if you advertise on the keyword phrase [shoe store] as opposed to a more targeted [children's shoe store] phrase.

4. Use a wide variety of keywords that pertain to your site and build several unique ads for each keyword or grouping of keywords.

5. Use SiteBuildIt! and the SEOBook. I can’t emphasize enough how much I believe in these products. They help you find the keyword combinations you need and help you manage your sales conversions and tracking of what is and isn’t working. Internet advertising can be profitable but it can also be very costly if done in an amateurish fashion.

Pay-per-click advertising is a quick way to establish relevancy and establish national or regional prominence for your product or service. There are a number of key elements to an effective Pay Per Click advertising campaign:

1. Quality of the Search Engine

2. Keyword choices

3. Keyword Cost-per-click (CPC)

4. Quality of Ad and Click-Through-Rate (CTR)

5. Quality of site advertised

6. Return on Investment (ROI)

Quality of Search Network

Right now the two top tier Pay Per Click Networks are Yahoo! Search Marketing and Google Adwords.

Yahoo! Search Marketing (formerly called Overture) sponsors links on Yahoo!, MSN, Altavista, CNN, and Infospace. It allows your keyword sponsored ads to be seen by the vast majority of Internet users. Ad placement is based on bid amount per keyword.

Google Adwords sponsors links on Google and with their search and content network of subscribers such as AOL and other prominent websites. Ad placement is based on bid amount and Click-Through-Rate (CTR). Google will de-activate low-performing keywords.

Yahoo! Search Marketing and Google Adwords will soon be joined in the top tier of Pay Per Click Networks by MSN when they launch their new service soon.

The two top tier Search Engines have broad distribution, lots of features, fast feedback, and are easy to maintain. The main disadvantage is cost – broad reach = competition = expensive for some keywords.

Middle tier Search Networks include Miva, Kanoodle, Enhance Interactive, Search123, 7Search.com, LookSmart, etc. These Search Engines have cheaper click prices than Google or Yahoo! Search Marketing and may work on some keywords that are expensive there. Some meta search engines mix PPC listings from these search engines with other search results making your listing on these more useful at times. The big disadvantage is the quality of the traffic sometimes suffers and there is much more click fraud on these search engines.

Smaller Pay-per-click Search Engines should be avoided. I learned this the hard way. You’re better off paying for web traffic than listing with small PPC Search Engines. There are always exceptions to the rule but the rule is that you will get a lot of clicks, spend a lot of money, and see very little Return on Investment. These search engines are very susceptible to click fraud. Instead of including that topic in this Pay Per Click advertising guide I have created an article on that form of fraud as well as on impression spam.

Keyword Choices

Remember, with Pay Per Click Advertising, you are paying every time somebody clicks on your ad. You want to make sure you choose keywords related to the content of the page that the searcher will be visiting. If you have a web page you want to advertise that is about cars then you don’t want to be advertising with the keyword “bicycles” because, although somebody might click through out of mere curiosity, you’re not targeting the right audience. Yahoo! Search Marketing will not let you bid on keywords unrelated to your content (which helps you) but others might. Don’t waste your money on clicks that won’t convert to customers.

Another aspect of keyword choice is variety and specificity. It is usually better to bid on many different very specific keywords related to your content than it is to bid on a very few general keywords. One reason is cost – very general keywords that lots of people are searching on are generally more expensive while variations or more specific keyword combinations may be cheaper and allow your ad to be placed more favorably.

Yahoo! Search Marketing and most other PPC engines work on a bidding system – the highest bid for a particular keyword always appears at the top of sponsored results. Google Adwords works with a combination of Cost-per-click you are willing to spend combined with the click-through-rate for your keywords. If you choose very general keywords on Yahoo! Search Marketing you are likely to spend a great deal getting to the top. If you choose very general keywords on Google, your Click-through-rate is likely to suffer because your ad will appear frequently but will be unrelated to a specific niche. In either model, your performance will suffer.

If you really must compete with popluar keywords, instead of less popular variations, then make sure you set up your search account to only “fire” on the exact match for that keyword. In Google, for example, you might want to compete for the specific keyword “web page”. With a broad match setting, your ad will show up if somebody types anything with either web or page in the search. You can narrow it down further by having your ad show only when “web page” appears somewhere in the search string. Finally, with exact match, you can have your ad appear only when the string “web page” is typed and nothing else is searched for.

With popular keywords, I recommend you stick to exact match for two reasons: cost and ad delivery. On one hand with broad match you may end up paying for a ton of clicks from visitors that figure out your product was not what they were looking for. On the other hand, you may receive too few clicks to maintain an acceptable click-through-rate (CTR) and have your ad disabled by Google. It is better to come up with very speciific exact match keywords (and lots of them) that relate to your site and have your ad appear only for those specific keywords.

Google offers free advice on how to optimize your keywords here.

Cost per Click

With Yahoo! Search Marketing and other PPC engines, your ad position is dictated purely by how much you are willing to spend for every click – this is called a bid amount for a keyword or sometimes called a Cost per Click (CPC) for some engines. Google uses an algorithm that factors in CPC along with how “successful” a keyword is for your ad (also known as Click through Rate – CTR).

There is not a single answer to the question – what should my maximum Cost-per-Click (CPC) be. Some very specific keywords fetch exorbitant click prices because the advertisers get a huge sale for every one that buys that product. Many people lose money based on their bid prices. Because there are so many people trying to sponsor ads, there are also many new entrepeneurs who will push the click prices way up. What you need to do is be smart about the bid amounts and figure out how much you can afford to spend per click. To do that, you will have to experiment.

There are services such as Atlas Onepoint that allow you to track keywords from click to sale to determine how profitable they are. These tools figure out which keywords have led to a sale and how much you had to pay for each click. You can also use the free conversion tools provided by Google and Yahoo! Search Marketing to determine which keywords are converting and how much you had to pay for each click before you got a sale. Your conversion rate is the number of sales (conversions) divided by the number of clicks for a keyword before you got a sale (sales/click). Cost per conversion is how much you had to pay on average for each sale (cost per click x number of clicks/ number of sales). If you can keep your cost per conversion below the amount of money you are making per sale then you are making a profit.

Tracking this information will allow you to determine which keywords are worth “upgrading” and which are dogs that are just costing you money. You may determine that a keyword converts really well and it is worth upgrading the max CPC in order to get it higher in the sponsored results. You may also lower the CPC price in order to make a keyword profitable.

Quality of Ad and Click Through Rate

In order to get clicks, people will have to want to click on your ad. Some sites allow a good amount of text but my experience indicates that less is more. Google’s restrictions to 3 lines with only about 30-40 characters per line is a good guideline. If you cannot grab the attention of the reader in that space then you will get few clicks. A few thoughts:

Click through rate (CTR) is a measure of how many clicks you receive on your ad divided by the number of times your ad appears (also called impressions). Yahoo! Search Marketing does not care about your CTR and will continue to give your ad placement based solely on CPC or bid amount. Google places your ad based on a combination of your CPC and how well your ad is performing (CTR). If your ad falls below a 0.5% click through rate (1 click for every 200 impressions) your ad gets in danger of being slowed down and eventually disabled for that keyword.

Make sure your ad title contains the keyword you are advertising for. PPC search engines bold the keyword in the search results and make your ad stand out. It also is an indication to the searcher that your content relates to their search term. Have many different ads for different search combinations to improve your ad performance.

Ads that appear on the first page of search results (positions 1-7 in sponsored results) have better CTR’s than ads that appear in the 2nd page or further of results. Folks assume that if it’s not in the first page then your site must not be as “important”.

With Google, if your CTR is really high you can pay far less in terms of CPC than others do for the same level of placement. This is especially true if a keyword has been disabled multiple times based on poor CTR. If your ad regularly gets a CTR for a keyword that exceeds 0.5% then you can try gradually lowering the max CPC and still achieve great performance. Some days are better than others so it’s always wise to track ad performance and “throttle” the max CPC for keywords based on how they’re performing for a given day. The basic rule of thumb is to try to keep your ad in the first page of search results and to change your CPC to do that. If your budget can’t afford that then turn off your ad on those days when you’re getting clobbered.

A final note on CTR in Google has to do with what I call impression spam (I’ve actually been interviewed about this phenomenom). I have had keywords disabled because there are huge spikes in searches for my keywords. On a typical day for my most popular keyword, there are about 6000 impressions for an exact match search. On occassion, I’ve seen as many as 30,000 impressions for the exact match in a single hour. Google repeatedly denies glitches in their system or click fraud but it is impossible to account for it based on “normal” traffic. The net result is that, because Google tends to measure keyword performance (CTR) every 1000 clicks, these spikes in traffic tend to disable keywords based on poor CTR. I’ve learned that these spikes tend to happen at night and in the morning hours and, so for very popular keywords, I don’t turn on ads until after 10 pm EST. I don’t know why it works but it just does. You’ll have to do a bit of experimentation to figure out if you have any keywords that tend to spike in the same way.

Quality of Site Advertised

So far the discussion has been limited to those factors that affect how well ads perform on Google or Yahoo! Search Marketing or other Pay Per Click engines. It is certainly true that you need to optimize your ads so they perform well and get you the highest quality clicks at the best prices. Equally, or perhaps more important is the quality of the site once the searcher lands on the site after clicking on the advertisement.

If your site does not have what the person is looking for, if the site layout is confusing, if the text isn’t compelling, or if the site is unprofessional your visitors may just visit quickly and leave the site. Conversion rate is as much about the quality of your web site as it is about keyword choice and cost per click. You need to build a site that people will want to read and make them want to purchase whatever you have to offer. I discuss the principles of a profitable web site in making money from your web site.

Return on Investment (ROI)

No Pay Per Click Advertising Guide is complete without a discussion of Return on Investment because the most important thing, in the end, is the bottom line when advertising: am I taking in more than I’m paying out? If the answer is No, then unless your motivations for your site are altruistic, then you need to come up with a better advertising strategy. ROI is a measure of profit realized from your use of advertising dollars. It is very easy to spend $50 at a time and have it add up to thousands of dollars a month wasted if you are not tracking the factors that contribute to profit and loss in Pay Per Click advertising. One dollar per click may not seem like much but if you’re paying for 1800 clicks per month and it leads to no sales then you have just contributed $1800 to your favorite search engine. The Pay per Click Reviews page gives some real world data that shows ROI for the major PPC networks and recommendations on the networks that seem to perform the best.

The maximize ROI you need to follow the strategies outlined above. I also highly recommend the SEOBook and SiteBuildIt! as my strategies are a distillation of the tomes of information provided with their products.

NOTE (Jun 2008):  This PPC Review List is based on data that is about two years old.  Some performance characteristics may have changed but it is still useful to note how ROI is related to PPC performance.  I still recommend tools to measure campaign performance.  Google Analytics now offers great tools for that work.

This Pay Per Click Reviews List is the compilation of real customer data from pay per click advertising on several ppc networks. There are many methodologies that could be chosen for pay per click reviews. The most important metric is Return on Investment (ROI). It is very important that you read some of the information regarding each pay per click search engine as some pay per click networks provide great ROI across the board while others only yield results for very targeted niches in less competitive categories. It must be kept in mind, therefore, that what works for some may not work for all niches. The pay per click reviews list is a broad stroke of the ppc networks as some ad and keyword combinations may yield dramatically better ROI results on the same pay per click search engine.

Pay Per Click Reviews List

When it comes to a PPC network the choice is not to choose only one but to choose all that provide positive ROI. Start with low investment, high ROI networks and build. If you are profiting from keyword ads then the more ad networks, the better.

7Search – Great ROI for both competitive and niche keyword categories. Highly recommended.

Enhance Interactive – Extremely poor ROI for competitive keywords and below average ROI for niche keywords. Not recommended except for experimentation with highly targeted keywords and measurement of ROI.

Miva – Good ROI for both competitive and niche keywords. Recommended.

Google – Acceptable ROI for highly competitive keywords and great ROI for niche keywords. The ROI results for the competitive keywords overshadow in this case and make it seem as if the network provides virtually no ROI. Benefit of advertising on a 1st tier network like Google, even with a “break even” ROI is exposure. The more “eyes” you get on your site, the more likely you’ll have repeat visitors. Google is a network you may be willing to take a small loss on in some categories just to build traffic. You can certainly lose money on Google so measure ROI but it is highly recommended once you get more comfortable tracking ROI in some of the less expensive pay per click search engines.

Kanoodle – Poor ROI across the board. Not Recommended.

Looksmart – Poor ROI for competitive keywords but great ROI for niche keywords. The key in this case is cost per click. Recommended with the noted caveat.

Yahoo! Search Marketing – Formerly called Overture, it has great ROI for competitive and niche keywords. You must be cautious here. Some competitive keywords can have $10 CPC prices or higher to get in top 10. Be willing to still bid on competitive keywords and accept 2nd or 3rd page placement and ROI is still pretty good provided your ad text is compelling for the keyword and your site relates. Niche keywords can even have high costs as Yahoo! Search Marketing has the largest distribution but ROI results are even better. Yahoo! Search Marketing is another 1st tier network you want to be on for exposure and establishment of a viewer base. Be willing to break even on some keyword categories if it is toward that end. A highly recommended pay per click search engine.

Search123 – Low cost per click make the network appealing. Acceptable clickthrough and good ROI make this network Recommended.

So how to you maximize ROI on Pay Per Click networks?

In my Pay Per Click Advertising Guide you will notice the many different Pay Per Click networks available to advertise your products and services. Pay Per Click advertising can be deceptively expensive especially since some advertising networks have bid prices as low as $0.01 per click. It adds up more quickly than you think and if you’re using a very rough gauge of success (i.e. “Gee, it seems like my sales went up when I started that ad.”) and cannot more precisely gauge the success of particular campaigns or specific keywords then you could be throwing away hundreds or thousands of dollars per month. That is not how you maximize ROI, in fact, you have a negative ROI at that point.

Here are a couple of scenarios in two extremes. First, on the one extreme is a keyword on Yahoo! Search Marketing that costs $8.00 per click to be in top position. Paying this amount could cost you $8000/day. Just because somebody is bidding this amount does not mean they are profiting – in fact, many lose a lot of money quickly on Adwords or Yahoo! Search Marketing and then give up on Pay Per Click networks. Of course, there’s always enough new people flocking to these networks all the time that drive up the price per click and make it unprofitable. That $8/click may very well be profitable but how can you know unless you measured that after every 10 clicks you made a $100 sale or some other metric?

An opposite extreme is a network like Xuppa. You can pay $0.02 per click for the same term you would have to pay $8 per click on Yahoo! Search Marketing. What a deal! That is until you are paying $50 for 5000 clicks and you still haven’t gotten a single sale from the leads on that network. I have actually measured Kanoodle keyword target ads ROI – I had 400 clicks without a single user leaving my landing page. In fact, half of those “visitors” never even let the page fully load. The reason is click fraud. I don’t do keyword targeted ads on that network anymore and it only took me a couple of days of data instead of months of “I wonder if I’m getting any sales” to figure out Kanoodle was not for me.

The reason I can pick and choose keyword prices on Yahoo! Search Marketing and Adwords or pick and choose which networks work is because I measure ROI. There are two tools I recommend:

1. Google Analytics – Free with your Google Account. Measure campaign performance and keyworkd performance on your web site.

2. AtlasOnePoint – a real powerhouse. It costs about $80+ per month which seems like a lot of money but it comes with more sophisticated tools than you can shake a stick at. Their documentation alone is really good to look at just to see the different kinds of advertising strategies that are out there and even pitfalls like bidding wars that occur on those networks. If you are a business that will be advertising heavily on the major search engines, you ought to really consider the services. $80 is a drop in the bucket compared to most Pay Per Click advertising budgets.

Once you begin measuring ROI with either of the above services you will better be able to tell which ad networks work best and which campaigns within those ad networks work. This will help you better determine how to price your keywords and whether to give up on some campaigns to maximize ROI. I was actually pleasantly surprised recently to see how great ROI was on the 7search network. Results vary so measure ROI for your own ads.

Your bottom line: you seem to have lots of visitors from Pay Per Click networks but no sales or interest. Lots of visitors reach your landing page but never click beyond the page they visit. Your costs go up with no income generated from the visitors.

Category 1: The Unscrupulous Affiliate

The first type of click fraud stems from the profit motives of the fraudulent “clicker” who makes money every time your ad is clicked. The large, medium, and small Pay Per Click networks all have affiliate programs whereby the search engine offers to pay the affiliate a commission or percentage of the income generated from each click on the customers that are enrolled through them. Alternatively, Pay Per Click networks pay websites to place Pay Per Click ads on their pages and they receive a commission on every ad clicked on their page.

I need not connect the dots on why this fraud occurs. If Joe the webmaster knows he can make a profit when somebody clicks on ads on his site, might he figure out a way to see to it that those ads are clicked and he makes income. There have been reports of “click farms” using cheap labor in underdeveloped nations with people visiting sites and clicking on ads. The fraud is distributed to evade detection.

This first category of Click fraud seems to be inversely proportional to the size and reputation of the network (in other words, the smaller and more obscure the Pay Per Click network, the more click fraud occurs). Yahoo! Search Marketing is probably most immune to this because they do not offer any affiliate incentives for ads clicked on their network. Google, on the other hand, has been known to have problems with their Content Network (aka AdSense). Google pays sites to provide sponsored results on their web pages and pays them a portion of the ad revenue generated when users click on those ads. Google tries to detect this and combat it by taking legal action against those who engage in it but it still goes on. Google even noted, in their SEC filing, that this fraud could end up hurting their business model.

In my own experience, I stay away from smaller Pay Per Click networks until I can measure ROI and click fraud (more later on that). I’ve learned this the hard way having spent over $1K on networks that provided thousands of clicks but no real interest in my site. As for Google, I love their regular and search network results when I set up Ad campaigns but I stay away from their content network (AdSense). I simply have not had any success – lots of clicks but no real interest that extends beyond the landing page. My experience is not unique.

Category 2: The Dishonest Competitor

If you are bidding on a competitive keyword then so are a lot of other people. Sorry to make a purely analagous statement that seems to go without saying but because you have a lot of competition, you also have plenty of opportunity to be competing against competitors that don’t play fair.

Because competition can get very tight, the bid amounts for keywords rises which causes profits to shrink for those keywords. If you make $60 per sale and it costs you $3 for every visitor to your site, you must make a sale for every 20 visitors (on average) in order to break even. You have a competitor with the same product and same profit margin but he wants you off the Pay Per Click network so he begins clicking on your ads hoping to drive your Pay Per Click costs up to where you decide it’s not worth the investment and leave. He makes no money, per se, off the direct profit from those clicks. His only interest is harming his competition.

Google and Yahoo! Search Marketing are probably the most susceptible to this type of click fraud because they are popular and where most of the real competition occurs. They both make extensive efforts to detect and eliminate click fraud (and will even refund money to you if they figure it out) but it still occurs.

Click Fraud Reduction

There are two basic strategies to reduce the impact of click fraud on your business model:

1. Use conversion tracking – Use the free conversion tracking tools provided by Google and Yahoo! Search Marketing or pay for conversion tracking and ad management with a company like Atlas OnePoint. Conversion tracking allows you to measure how many people are clicking on your ads but, more importantly, how many of those clicks from each Pay Per Click engine, or for a particular keyword, are converting into sales. Click fraud is not the only reason to use conversion tracking but it is a tool to help measure it. If you are getting no or very few conversions from tons of visitors from an ad network then it may be an indicator of click fraud. Of course, even with click fraud in the mix, you may measure that you still make a profit on average and keep the ad up but you won’t know anything if you don’t at least measure conversions and see which ads make money and which are just costing you money.

2. Use a Pay Per Click Auditing Service- I use a pay-per-click auditing service called WhosClickingWho. The system allows the customer to detect multiple visitors from the same or different networks using any keyword to visit your site. The system has multiple benefits. First, it’s actually a great tool to see where your visitors are coming from (even your legit ones). Second, it is useful to see multiple visits from one user and note patterns of fraud. The third party results from the service are very useful when you submit a click fraud claim to the Pay Per Click networks to get a refund. Lastly, it deters the unscrupulous because they know you’re monitoring the fraud. You have the option of triggering a popup asking them to bookmark your site because you’ve noticed them visiting your site repeatedly through Pay Per Click ads. It’s like having a sign for a security alarm in your front yard – it doesn’t frighten away all burglars but it does deter most. If you are going to be spending more than a few hundred dollars a month on PPC advertising then you really should make the investment.

A key factor when choosing a pay-per-click network (aka ppc network) and embarking upon an advertising campaign should be return on investment (ROI). There is an old adage that says you have to spend money to make money. While true, it is also true that you can spend more money than you make and put yourself out of business if you cannot measure the effectiveness of your advertising. Simply put, ROI is a measure of how much return (profit) you make on a given investment (advertising dollars).

So how to you maximize ROI on Pay Per Click networks?

In my Pay Per Click Advertising Guide you will notice the many different Pay Per Click networks available to advertise your products and services. Pay Per Click advertising can be deceptively expensive especially since some advertising networks have bid prices as low as $0.01 per click. It adds up more quickly than you think and if you’re using a very rough gauge of success (i.e. “Gee, it seems like my sales went up when I started that ad.”) and cannot more precisely gauge the success of particular campaigns or specific keywords then you could be throwing away hundreds or thousands of dollars per month. That is not how you maximize ROI, in fact, you have a negative ROI at that point.

Here are a couple of scenarios in two extremes. First, on the one extreme is a keyword on Yahoo! Search Marketing that costs $8.00 per click to be in top position. Paying this amount could cost you $8000/day. Just because somebody is bidding this amount does not mean they are profiting – in fact, many lose a lot of money quickly on Adwords or Yahoo! Search Marketing and then give up on Pay Per Click networks. Of course, there’s always enough new people flocking to these networks all the time that drive up the price per click and make it unprofitable. That $8/click may very well be profitable but how can you know unless you measured that after every 10 clicks you made a $100 sale or some other metric?

An opposite extreme is a network like Xuppa. You can pay $0.02 per click for the same term you would have to pay $8 per click on Yahoo! Search Marketing. What a deal! That is until you are paying $50 for 5000 clicks and you still haven’t gotten a single sale from the leads on that network. I have actually measured Kanoodle keyword target ads ROI – I had 400 clicks without a single user leaving my landing page. In fact, half of those “visitors” never even let the page fully load. The reason is click fraud. I don’t do keyword targeted ads on that network anymore and it only took me a couple of days of data instead of months of “I wonder if I’m getting any sales” to figure out Kanoodle was not for me.

The reason I can pick and choose keyword prices on Yahoo! Search Marketing and Adwords or pick and choose which networks work is because I measure ROI. There are two tools I recommend:

1.  Google Analytics – Free with your Google Account. Measure campaign performance and keyworkd performance on your web site.

2. AtlasOnePoint – a real powerhouse. It costs about $80+ per month which seems like a lot of money but it comes with more sophisticated tools than you can shake a stick at. Their documentation alone is really good to look at just to see the different kinds of advertising strategies that are out there and even pitfalls like bidding wars that occur on those networks. If you are a business that will be advertising heavily on the major search engines, you ought to really consider the services. $80 is a drop in the bucket compared to most Pay Per Click advertising budgets.

Once you begin measuring ROI with either of the above services you will better be able to tell which ad networks work best and which campaigns within those ad networks work. This will help you better determine how to price your keywords and whether to give up on some campaigns to maximize ROI. I was actually pleasantly surprised recently to see how great ROI was on the 7search network. Results vary so measure ROI for your own ads.

Google uses a combination of Click-Through-Rate (CTR) and Maximum Cost-per-Click (CPC) to determine ad position. Just because an ad is in top position does not mean it is making money for the advertiser, nor does it mean they are paying the most in terms of CPC. CTR is determined by dividing the number of times a searcher clicks on an ad by the number of times the ad is displayed (called impressions). Advertisers with high CTR can pay a lower CPC to maintain first page ad status. In my own experience, I’ve seen ads that can’t stay on the first page with a low CTR for over $2.50 per click while during high CTR periods it would be relevant for less than $1.50 per click.

In a perfect world, honest advertisers and searchers would always see the best ads float to the top as their ad text and content is most relevant to the search – or so Google hopes. In reality, there are many unsrupulous advertisers who want to knock their competition out of top position and do it by two means – click fraud and impression fraud.

Click fraud occurs when an advertiser repeatedly clicks on a competitor’s ads to drive up his costs. The advertiser gets lots of clicks, which drives up his CTR, but they’re useless clicks that cost a lot of money. Google sometimes detects these and will refund money.

Just as insidious is impression spam. The dishonest competitor will continually load the page with the search term others are bidding on. Tons of impressions will occur without a single click. This will drive CTR into the floor and affected ads will be slowed and eventually disabled. I have seen impression spam cause CTR on my ads go from 1% to .1% in a matter of hours with 49,000 impressions for an ad with a daily average of only 8,000 impressions.

Unfortunately, Google is slow in responding to impression spam. Though I have seen it occur at least a dozen times, I’ve never received a notice from Google that they ackowledged the problem as I reported it to them. Further, they do not “credit” bogus impressions or erase them from your account. Net result is that your ad suffers forcing you to resubmit the ad at a higher CPC than before and spend days rehabilitating the ad to get it to the point it was for months before it was decimated by impression spam in a matter of hours.

This is typically only a problem for popular keywords. My advice is to do a search before you make your ad active during the day and make sure the “normal” advertisers are all there. Secondly, don’t run competitive keywords at night or in the early morning – for what it’s worth my experience is that this stuff tends to happen most during these hours. Lastly, keep the pressure on Google – their business is supported by your ads and you deserve a product you can rely upon.