Let’s say “Joe’s Flooring” a local flooring company wants to advertise on the web. They have their own information website and would like to increase business. If Google Ads or some other web based ad company approaches them how do they determine if placing web ads is worth the cost and will be effective? How do they determine who they will go with? How do you contract with a web ads company and not get taken with fake click throughs etc.?
What are the parameters of that decision making process?
Well, how do they determine if they’re getting their money’s worth from a TV or print ad? Any method that works for those will work just as well for web ads.
Of course, there are also a few methods that work on the Internet that don’t work in other media. If someone clicks on the ad, for instance, they know that. And it’s a little easier to give customized promotional codes online than it is through other media.
Actually, that’s one of the huge advantages of Pay-Per-Click - there are tons of analytics that are generated that let you calculate return-on-investment.
Books have been written on the subject, but I can spend a small amount, see the effectiveness and decide whether I want to spend more. Let’s say that ads costs $1 per click. I may decide to spend a max of $50 or $100. At any point in my campaign, I can see how many impressions my ad has had (how many times it was displayed), and how many clicks the ad got.
Getting to your question about fraud, Google doesn’t count one person clicking multiple times count as multiple clicks.
Most people have some analytics code on their web side, so that the reporting will tell me which ads, triggered by which keywords, and on what web sites, resulted in a sale. Even if you click on the ad in week 1, and don’t make a purchase until week 3, a tracking cookie still determines that the ad click resulted in a sale.
Conversely, if somone clicked on an ad but the buyer abandoned the sale somewhere earlier in the sales funnel (e.g. they bailed on STEP 2 of the shopping cart) I can see that as well. I can even pass Google the value of the sale, so that I can get real data about the return on investment by looking at the ad spend vs. the actual amount of sales generated.
I’m a big fan of pay-per-click, because it’s really pay for performance and it’s very measurable. Typically you’re doing well if you can achieve a conversion rate of 1%-2% but that varies by industry. Sometimes I am approached to buy just some web banner advertising, but I don’t like that because I am paying for impressions (number of times the ad is displayed) without the metrics I can get through pay-per-click, and there is usually a heft minimum ad spend. With Google Adwords, I could just spend $10 if I wanted to.
Yep - on the web you have the advantage of being able to track everything that happens on your own site (google analytics is but one tool) - you can track where the visitor came from, what keywords triggered the visit, what route they took through the website and the eventual outcome -
So while the media owner might be able to “fudge” the numbers of visitors they have, or their visitor profile - you totally own everything that happens on your own site, and can make your own informed judgement of what’s good.