Optimizing pay-per-click camaigns is a whole art and science unto itself. There are countless tricks, techniques and strategies for getting the most out of your campaign. Sometimes, it makes sense to learn all of these tricks yourself. Other times, it is best to leave it to a professional PPC campaign manager.

Either way, you will want to make sure the campaign is being optimized properly. But, how can you measure whether this is the case? The most common answer to this question is, “The lower the cost-per-click, the better-optimized the campaign.” Bzzzzzz – sorry, wrong answer! It is not all about cost-per-click, it is all about cost-per-conversion.

As explained in more detail elsewhere in this blog, a conversion is some action taken by the website visitor that the site owner deems desirable. The action could be almost anything, but is typically defined in terms of making a purchase, filling out a web form, or placing a phone call to the number listed on the site.

Once you have defined a conversion action, you need to set up Adwords to track it automatically. Once set up properly, you can login to your account and view your “cost per conversion” data for any given campaign over any given period of time. The key to setting this up is to create a page on your site that comes up after the desired conversion action has happened. For example, if your conversion is defined as a purchase, then you could have a Thank You page pop up on the site. In that page, in the “code” running in the background, you will want to embed a bit of code from Google Adwords. How it works is: when that Thank You page is displayed, it sends a little message to your Adwords campaign, notifying it of the successful conversion and thereby allowing it to calculate how much you had to spend (on average, over a given period of time) to get each such conversion. Pretty cool, eh? Okay, here’s how to set it up:

1. Login to your Adwords account.

2. Go to the green row of tabs at the top and click Reporting, then Conversions.

3. Click “New Conversion.”

4. Give your new conversion a name and select a tracking purpose.

5. If you like, assign an expected revenue value to this conversion (could be an estimate).

6. Click “Save and get code.”

7. Place the code as instructed onto your site on the Thank You page (or whichever relavant page you like).

Now, whenever someone clicks on one of your ads AND completes the conversion action, Adwords will keep track of it.

Managing to conversion is the ONLY way to fly when running an Adwords campaign. Be sure to give it try.

Optimization, in very broad terms, is simply getting the most bang for your buck. Usually, in the world of online marketing, it refers to decreasing your cost per conversion (i.e., cost per sale, download, inquiry sent, etc.).

Now, there are a ton of ways to optimize any given campaign, depending of course upon the nature of the campaign, the techniques you are using, etc.. The specific ways to optimize for a given campaign is for another post. But, in very general terms, the optimization process goes like this:

a. set up your campaign
b. define some metrics (something you can measure who measurements represent success or failure)
c. establish some baseline metrics (i.e., take initial measurement)
d. make a small change
e. wait a while (to give things time to collect data)
f. measure again
g. compare new measurement to previous set of measurements
h. go back do “d” and repeat

Here’s the biggest pitfall that so many of my clients fall into: they try to test more than one variable at a time. In the world of optimization, here is the golden rule:

Test only ONE variable at a time!

Here’s why: if you test more than one variable at a time, whether the results (see “f” above) are good, bad, or mediocre, it won’t matter, for you will have learned NOTHING about what really worked, what didn’t. In other words: you won’t be able to tell for sure what made the difference! You may as well have not done anything at all.

This is one of those pieces of advice I’ve repeated to customers, colleagues, and random people on the street countless times. Sometimes it sinks in right away, sometimes it takes a while. But, if you think about it, it’s the only way to do optimization that makes sense. So: follow it, use it, live it! (And, happy testing, by the way.)

Market segmentation has gotten a lot more sophisticated in recent years, due to:

1. the advent of proprietary psycho-behavioral segmentation systems like Prizm, Mosaic, and Personicx
2. the increased sophistication of quantitative analytics techniques
3. the sharp increase in the sheer amount and detail of information that market research firms keep about each adult in the United States

Request: If you own, run or manage a business-to-consumer (B2C) business, I am interested in your thoughts on market segmentation. Here is a one-question poll I would like you to answer: http://polls.linkedin.com/p/70962/qhfcj. Thank you for your input!

http://tinyurl.com/ydg4u8k

It’s a $69 investment (last time I checked), but that’s a drop in the bucket relative to the value of time you will save yourself. There is no easier way to get Twitter followers fast. I get 100-150 new followers each day I use it, with minimal effort.

Once you install the software, here’s what to do (be sure to set up a Twitter account first at http://www.twitter.com):

1. Launch it. Then, login to Twitter through the software itself (rather than through your browser).

2. Now, to start building your massive follower base: click on “Tools” then “Find Targeted Followers.” Type in a keyword that matches your business or interest area (e.g., accounting). For the first person that comes up on the results list, click on their Twitter page (the link). Then, click on their Followers list. They will have 2,000 to 20,000 or more followers. Now, click on “Follow All” button at the bottom, right of your screen. The software now goes to work, automatically following other people. Go about your daily activities and give the software some time to do its thing.

Now, once you are following about 2,000 people, the software will cut you off from following more until you get around 2,000 followers yourself. This will not all happen in one shot. You will notice that not everyone will follow you back, however. So, every once in a while (every 2-3 days), you will want to “Unfollow” those people who didn’t follow you back. Just go to your own “Following” page and click on “Unfollow All” button on bottom, right. (It will only unfollow those who haven’t yet followed you).

Also, every day or so, be sure to go to your own Followers page and “Follow All.”

My answer? Well, since I clearly blog myself, you can probably guess that I think blogging can be a good idea under some circumstances. But, in what situations should you spend your time blogging, and how can it help? Here are my thoughts on the matter:

Blogging can help you:

1. Build more relevant content for your website (search engines love content!).
2. Remain focused on your core competencies and keep your skills sharp by writing about what you already know and love to do.
3. Keep your customers, colleagues and prospects informed about what you are doing, thinking and feeling about your area of specialization.
4. Send more (but not necessarily tons more – see below) traffic to your website.

However, blogging is not likely to help you:

1. Get famous. (In fact, it won’t even help you get “Internet famous.”)
2. Instantly get thousands of visitors to your site.
3. Stir deep public debate.*

* Yes, there are people out there doing all of these latter 3 things via blogging, but they have been blogging practically since the Internet was the ARPANET and Seinfeld was barely into its 3rd season. Nowadays, there are tens of millions of blogs out there – the compeition is stiff, to say the least.

So, set the right expectatations and get blogging!

Two tools I recommend to help you out:

1. Brush up on your Microsoft Excel skills.  This is a fine piece of software that 98% of computer users have free and ready access to (yes, even you Mac users!). Learn it, master it, use it.

2. Access a good PPC calculator.  You need to be able to calculate such vital numbers as:

a. The maximum amount you are willing to spend per conversion

b. The total net profit per conversion

c. Your monthly PPC ad budget

Get your SEO math right and you will be able to sleep well at night knowing your SEO and SEM strategies rest on a solid foundation, not just guesses and good faith.

Just One Number

As someone who is interested in promoting your website, you no doubt are convinced of the importance of two things:

a. getting traffic to your site.

b. enticing people who visit your site to take some specific action once they have arrived there.

In these two types of actions is embodied the ENTIRE process of all-things-Web. That’s it. That’s the whole enchilada. That’s the game. That’s the thing you need to do.

Well, as anyone who has been doing “stuff on the Web” for any length of time knows, getting those two all-important things to actually happen isn’t always easy. And, after having tried a few tricks you had up your sleeve that might or might not have borne fruit, you may have already realized that you’ll need to actually get serious about using metrics to measure your site’s performance.

And by metrics, of course, I mean numbers. Many of us – businesspeople alike – are a bit numbers shy. Others are just plain math-phobic. However, I strongly encourage you to get over any math aversion you have and start working with the numbers a bit at a time. Getting metrics-savvy is your first step toward really managing your Internet activities toward better performance.

Here’s a first step in your journey to a metrics-centric view of your online activities: figure out the One Number that is arguably the most important number you need to know about your site. And that One Number is this: the conversion breakeven point.

Put simply, the conversion breakeven point is defined as the maximum amount of money you are willing to spend to get someone to take that all-important action (i.e., buy something, sign up, call you, etc.) on your site.

Once you know this number, a whole slew of additional things flow from that. For example: how much you are willing to pay per conversion (and even per click) for your PPC campaign. How much you are willing to pay for SEO. And even how much you should charge for your time, services and products. All of this information is in part a function of this One Number.

To simplify your life even further: you can figure out the One Number for your business using my free conversion breakeven calculator at: http://www.jcjinteractive.com/ppc_seo_conversion_calculators/.

Okay, so what’s the best way to think about these different types of traffic that could potentially visit your site?

Here is how to prioritize your traffic in terms of capturing them (with SEO) and converting them (with good site design).

Top Priority: Type III: people who want a service like yours but who don’t know you exist

These folks should be your primary targets. Think about it this way: you want to conduct your SEO campaign (and design your site to capture, inform, impress and incite to respond to your call to action) for those people who aren’t yet aware you even exist on the planet but who are already motivated to seek a service or product like yours. Make your site all about these folks. The biggest mistake webmasters and site designers make is to assume that site visitors already know: a. who they are; b. what the value that they offer is; c. to whom they offer that value. Don’t make that mistake. If you do, you’ll miss these vitally-important Type III folks.

Second Priority: Type IV: people who want a service other than yours but who, if they learned about your service, may consider using your service as a substitute for the service they are looking for

Your site should also make provisions for these folks. This is a bit harder of a sell only in that it can be tricky to change a prospect’s thinking from believing they need some other type of product or service to believing that yours might do just as well (or better). Still, very much worth the effort. Hint: you can explicitly state on your site something like, “Looking for an X Widget? Try my Y Widget instead.”

Third Priority: Type II: people who want your services and have heard of you – but who can’t quite remember your name

These folks should pretty much take care of themselves once they reach your site.  But, in order to increase your chances of getting them to your site with SEO, make sure that your site’s meta tags (keywords, in particular) contain common misspellings of your company or site name.

Fourth Priority: Type I: people who want your services and already know your name

With any effort at all, you should be already ranking within the top 5 positions on major search engine results pages (SERPs) like Google, Yahoo! and Bing for your own company or site name. If so, Type I traffic should take care of itself. If not, do some SEO for your own name using blogs, backlink creation, etc.

Bottom Priority: Type V: people who don’t want your service and likely never will, even as a substitute for something else they do currently want

Basically, you can ignore these folks. Still, occasionally they will stumble across your site by accident. Or, maybe they are doing research on your company and find you that way. At any rate, for these folks, just supply an informative “About Us” page to explain who you are, what you do. That should do the trick.

Make the conscious decision to intelligently target your potential site traffic in this order of priority and you will in the process be making the best use of the time and resources you put into capturing and then converting your site traffic.

This realization is both liberating and a little bit scary. For, by recognizing that you don’t want everyone out there “on the Internet” coming to your site, you are forced to look more closely at exactly whom you do want and how you should treat them once they get there. And, then of course you may find yourself going back to your old college marketing textbook and flipping to that long chapter on market segmentation. Market segmentation, as I define it, is the art of dividing your prospects into meaningful categories so that you can go after them in different ways.

The way I see it, there are five types of traffic out on the Internet insofar as they relate to your products and services. Here they are:

Type I: people who want your services and already know your name

Type II: people who want your services and have heard of you – but who can’t quite remember your name

Type III: people who want a service like yours but who don’t know you exist

Type IV: people who want a service other than yours but who, if they learned about your service, may consider using your service as a substitute for the service they are looking for (oh yeah, and they, too, don’t know or don’t yet care that you exist)

Type V: people who don’t want your service and likely never will, even as a substitute for something else they do currently want

There you have it. As you start to think about the implications of all of this, you’ll realize that the way you should go about targeting these five types of people is (or should be) very different.

In a future post (Part B), I will discuss more about why and how you need to target these potential visitors differently – both from the perspective of SEO/SEM and from the perspective of once they arrive at your online doorstep (your site).