One of the most frequent questions we get from potential clients who are interested in our services involve Pay-Per-Click fees. And this isn’t our fees, this involves most Pay-Per-Click management companies, since the fees seem to be pretty standard across the board.

Clients are always unsure about the fees, which can range from 15%-30% (buyer beware of any companies offering rates below this range – you often get what you pay for).

The question as to why and whether to pay a commission for Pay Per Click is a valid one since ads are pretty easy to set up.

Anyone with even passing knowledge of these ads can pretty much set up the campaign, and they may even generate traffic for their site. So if you have, say, $1,000 to spend each month, is it really worthwhile to pay someone $300 of it when it could instead be used to attract visitors to your web site?

There are a number of things Pay-Per-Click management companies do that Clients lack the time and expertise to do successfully. Chief among these is working with a huge number of keywords and phrases, eliminating those that will bring “bad clicks,” and tailoring ads around groups of keywords.

But the real advantage comes with how Google runs its program.

The Clickthrough Rate (CTR) is the percentage of people searching who actually click. If 100 people search, your ad shows up 100 times, and one person clicks through, that’s a 1% clickthrough rate. While many people think that you just pay more to get a higher ranking, it’s actually more complicated than that. Someone ahead of you on the list might be paying significantly less. Let me show you how:

Let’s say I’ve got a 1% CTR and I’m paying $1.00 for position #2. Let’s further assume that you’ve got a 2% CTR. If you play your cards right, you may only have to pay 51 cents to get position #2 and knock me down to position #3. That means that you were 2 times as relevant, and you got to pay 1/2 as much!

The rules can be very simple, but the implications are huge.

When you achieve high click-thru rates, you can pull your bid prices down, down, down and yet stay at the same position on the page, while your traffic goes up.

The difference can be quite amazing. Many ads have ranges less than 1% but successful ads can be over 3%. If you have a 0.5% CTR and I have a 3.6% CTR, I can pay 7 times less than you and still have a higher ranking!

In the end, a good Pay-Per-Click management company knows the tricks of the trade to improve CTR and will constantly be tweaking the ads to get a higher value. In the long run, this will generate a lot more clicks at a much lower cost, more than justifying the admin fees.

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