To guarantee that your online business always generates a profit using PPC search engines, your revenue should always be greater than your total expenses. 

Most PPC advertisers fail to include all operating costs for a set period of time, thus not realizing what it takes to produce and deliver their products or services. After your PPC strategy has been running for a few days and generated a substantial amount of clickthroughs, it is time to analyze the results so that you can optimize the campaign for high ROI. 

Tweaking your campaign too soon will only impede the process of optimization as it is impossible to make correct judgments and assumptions based on a small number of visitors. Using your ad tracking service or software you should be able to identify exactly which keywords are referring you visitors and exactly how many of those visitors are converting to customers. 

Calculate your R.O.I. for each keyword phrase. 

In pinpointing which keywords are most profitable make sure that you take into account the amount of profit that the keywords brought in over the same amount of time. 

Hypothetical case study: 

Let’s say you have three keyword phrases for your soap business: - dishwashing soap = $.10 per click - dishwashing detergent = $.25 per click - cheap dish soap = $.50 per click.

Now let’s say that you check your statistics: 

- dishwashing soap got 50 clicks in 4 days for a cost of $5.00 and generated $50.00 in revenue for a profit of $45.00 which equals an ROI of 900%. 

– dish washing detergent got 50 clicks in 2 days for a cost of $12.50 and generated $40.00 in revenue for a profit of $27.50 which equals an ROI of 220%. 

- cheap dish soap got 50 clicks in 1 day for a cost of $25.00 and generated $50.00 in revenue for a profit of $25.00 which equals an ROI of 100%. 

It would appear as though your most profitable keyword is ‘dish washing soap.’ Or is it? 

It has the highest ROI but it took 4 days to generate that ROI. 

If you were to allow these campaigns to run for a month this is what the numbers would look like: 

- dish washing soap = $337.50 

- dishwashing detergent = $412.50 

- cheap dish soap = $750.00 

So, it ends up being a no-brainer but most bidders don’t take the time to do the calculations that predict ROI over time. As a result they sell themselves short. Ten cents seems so much safer with its high ROI and low bid than the somewhat more risky bid of $.50 In actuality it is many, many times less profitable. From the above example learn a couple very valuable things: 

1. Spending more can often get you more Don’t be afraid to spend money. 

Carefully monitor your site. After you get, let's say 500 visitors, calculate how much each visitor is worth to you by dividing the revenue by 500. Then you have a basic idea of your maximum PPC bid. 

2. Look for the greatest ROI over the least amount of time 

Don’t get sucked into the belief that the cheapest keywords are the best. Just because you have a $.01 keyword that has an ROI of 3000% doesn’t mean that you can’t be making more by bidding $.75 on the exact same keyword. In order to optimize your pay-per-click campaigns you are going to have to do a lot of calculating. 

There is a lot of math involved. Statistician is one of the many hats that Internet marketers are forced to wear on occasion. You need to determine the average amount each visitor to your site is worth. Once you have determined that you know about what your maximum bid can be for any given keyword. The reason I emphasize "about" is that some keywords will convert much, much better than others depending on how targeted the phrase is for you product. 

Each keyword will have a different ROI. Your visitor value should only be a starting point. After a keyword has been running for a while you should calculate how much each visitor brought to your site by that specific keyword is worth and then re-bid. 

Have everything neatly organized in Excel spreadsheets. If you are not currently able to use Microsoft Excel or some other spreadsheet program you are missing out on an extremely useful and versatile tool for any online business. Go online and do a few tutorials. Excel spreadsheets provide the organization and power that you will need to get the most out of your keyword tracking.

At this point you probably do not have an extremely large volume of traffic coming in. However, you should have enough that you are able to do some testing and tweaking of your sales process.

You should be getting at least 100 hits a day off of your PPC campaigns. If you are not, think of more search phrases and keywords, improve your existing listings, or bid higher on your listings. 

After 750 PPC visitors have come to your web site you should analyze how it is performing. Every 750 hits analyze, tweak and then continue monitoring. Analyze your sites statistics. Analyze every possible statistic. Now is the time before you start driving massive amounts of traffic to your site. Improve and tweak your sales copy, and try out different up-sell techniques. 

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