Let’s face it, most people don’t track their advertising at all and therefore don’t
know where their leads or sales are coming from. I’ve talked with dozens of
business owners about which online advertising vehicles work best for them.
What I usually hear is that they are impressed with the sites that give them the
highest number of clicks. Sure, clicks are encouraging, but do they tell the whole
story?

No, the number of clicks or the cost per click (average CPC) does not tell the
whole story. Not even close. At the end of the day, it’s not how much you spend
per click that really counts – what’s important is how much you spend PER
CONVERSION (a truly qualified prospect). And finally, of course, it’s the cost per
sale that really matters.

I have been doing pay per click campaigns for some time now. The following are
my findings after testing pay-per-click campaigns from September 2006 through
February 2007 on the following search engines: Google, Yahoo, MSN, Mamma,
Lycos, 7Search and GoClick.

When testing, I chose the same keywords for each campaign and used separate but exact duplicate lead
capture pages. This allowed me to see which keyword buys would give me the highest % of qualified
prospects. My focus was the “Cost of Conversion” which was the percentage of people who requested more
information about my program (a good prospect). My goal was to get clear indication as to the quality of the
traffic coming from each search engine.

By taking the average cost-per-click and looking at the % of prospects that requested more information (Name,
Phone # & E-mail Address), it gives me the real cost of a qualified lead. Following are the results:

The study was conducted over several months. After trying to tweak the Lycos and Go Click campaign for
about a month, I decided to drop them both. It is also important to note that my conversions decreased over
time. This underscores the importance of changing the look and feel of the lead capture page from time to
time. After fine tuning these campaigns, I must say that both 7Search and Google are my favorites. When
looking at actual sales, Google does beat 7Search by a 30% margin (which means that the actual cost per sale
is about the same – not pictured on chart above), but both work extremely well.

As you can see, if I just looked at the cost per click but ignored conversions, I could have wasted a lot of money
on the wrong vehicles.

The lesson here is – clicks are good, but conversion and sales are even better! Take the time to gather
deeper information on all aspects of your advertising vehicles. If you do, your marketing dollars will bring you
five to ten times better returns.

The article is brought to you by Peter Grundner