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Posted On: 04 Mar 2013

The pros and cons of PPC ad campaigns

Pay Per Click (PPC), also called CPC, advertising can be a cost-effective method of driving traffic to your site to increase sales, sign-ups or visitors.  As part of well-managed marketing strategy it can prove very successful, however,  poorly planned campaigns can also be very expensive and show little return on investment (ROI).


The pros of PPC advertising include the fact that each click could mean a new sale because you are getting targeted visitors to your service or product if your ad is well written. PPC allows you to set specific budgets for your campaigns so you can closely monitor the cost of your traffic generation.  Campaigns can also bring advertisers traffic very quickly if they are willing to pay for the top keyword positions.


The ease of setting up PPC campaigns sees inexperienced advertisers creating ineffective campaigns which show little or no return on investment (ROI).  Poor conversions and attracting traffic not interested in their offers because of poorly written ads means costly campaigns, with little to show for the expenditure.  This is particularly true when bidding on popular keywords which are more expensive.

Cost of PPC Campaigns

The very nature of PPC campaigns creates an obsession with the cost of each click, when advertisers also need to look at is the conversion rate and cost per conversion. Before you start advertising, you need to decide what your goals are and you need to know how to measure your conversion rate and return on investment (ROI).

A conversion is defined as a click that results in a conversion within 30 days.

A click-through rate (CTR) is the number of clicks your ad receives divided by the number of times the ad is shown.

For example, imagine that out of every 100 clicks through to your offer, you make two sales, and each sale is worth $30.

  • If you bid $1 per click, you spend $100 to make $60 and lose money.
  • At $0.50 per click you spend $50 to make $60 – a profit of $10
  • AT $0,25 per click you spend $25 to make $60 – a profit of $35.

Google Adwords Cost per Click Click Through Rate

How much are you willing to spend to make a sale or get new sign-ups?  PPC ad campaigns are only effective if you measure your results to ensure you are getting a good return on your investment (ROI).

Download a case study of an Adwords PPC Campaign.