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Business Link - E_Commerce

Business Link - E_Commerce

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Published by Lilly Thompson

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Published by: Lilly Thompson on Jul 04, 2011
Copyright:Attribution Non-commercial


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When setting a budget for a pay per click

Pay per click advertising

e-Commerce | Created by Business Link on 26 January 2010 09:50 Ã#¨ Crown copyright 2007

Page 118

(PPC) campaign, you're in control of the
cost of your keyword-targeted adverts, but
how you set your budget will depend on the
PPC provider you choose. This is because
each of the market-leading providers offers
a slightly different proposition. All of them
offer tools to help you calculate and set your

Common terms used in setting budgets

Daily budget - the total amount
you're willing to spend per day on a
specific campaign. There's no
minimum, but if you set the budget
significantly below your PPC
provider's recommendation, your
adverts will have fewer displays.
Cost per click (CPC) bid - the
maximum amount you're willing to
pay for each click. You may pay less
than your CPC bid as your ranking
will determine the actual cost, but
you'll never pay more than the
maximum you set.
Click-through rate (CTR) - the
percentage of clicks out of the total
number of times your advert is
displayed, which counts towards your
quality score. The more compelling
your advert, the higher CTR you can
expect and the lower your advertising
cost will be.
Conversion rate - the percentage of
people who buy out of those who
click through and visit your website.
The quality of your landing page and
how targeted your advert is will both
play a role in whether or not you
close a sale.
Quality score - assigned by search
engines according to their own
calculation. Typically, it will include
an advert's CTR, the relevance of the

landing page and the website's
quality. As a high score improves
your ranking, you could benefit from
a CPC that is below your maximum
bid and/or a better position on the
search page, which may in turn
increase your CTR.

You'll need to constantly monitor your bids
in light of your advert's performance. If your
budget allows, you may prefer to invest in
automated bidding tools or use the services
of a PPC agency to carry out these tasks for
you. See the page in this guide on
choosing a pay per click agency.

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