Each week as Smallbizlady, I conduct interviews with small business experts on my weekly Twitter talk show #SmallBizChat. This is excerpted from my #SmallBizChat interview with Paul Mosenson @nusparkmktg He’s discussing key methods to plan and optimize pay-per-click advertising.  Paul Mosenson is the President of NuSpark Marketing, a Philly based digital marketing firm focusing on lead management and lead generation.  Paul helps his clients grow by developing strategic media and marketing strategies with an emphasis on content, executing the tactics, and measuring with analytics and http://www.NuSparkMarketing.com.

Smallbizlady: How do I know pay-per-click advertising is right for my business?

Paul Mosenson: If one of your marketing goals is to drive traffic to your website or landing pages with the goal to produce conversions, which are either purchases, content downloads, newsletter sign-ups, or quote requests pay-per-click advertising can be an effective solution provided ongoing optimization occurs.  Certainly getting your site optimized for certain key words, and having a robust listing on Google Places is essential, but a. you can’t be optimized for every single search query, and b. Pay-per-click is advertising is an opportunity to promote your solution rather than list it.

Smalbizlady: What is Adwords Express and is it right for a small business?

Paul Mosenson: Google is always looking for ways to help the small business with marketing.  If you have a Google Places listing there’s a new program called Adwords Express.  It’s a program whereby you set up an express account, write an ad, and list a business category.  Google selects the keywords and bids automatically, so the small business owner doesn’t have to manage it.  The jury is still out on this, but if you’re a small business with a small budget, can be worth a test. More here:  http://www.google.com/awexpress/

Smalbizlady: How do I determine how much to spend?

Paul Mosenson: There’s really no set guide to how much to spend. Much depends on your own budget, geographic targeting, and level of competition.  I usually set up a campaign for a smaller business for between $30-$50 per day, and project a $2.00 cost for every ad click, then begin the optimization process.  Let’s assume $40 per day is your budget. At an average of $2.00 per click, that means 20 clicks per day.  Let’s assume a 5% conversion rate; then that’s either 1 sale per day, or 1 defined action per day.  If you get 1 sale per day, and your average sale is over $40 including margin, then you can test increasing spend because you’re making profit.  A non-transactional conversion is a little harder, and you have to project conversion goals.

Example: $1,200 monthly spend: 600 clicks per month, 30 conversions. Now let’s assume 10% of those non-transactional conversions become a sale, and your average sale is $300.  So out of those 600 clicks, you achieve 3 sales worth $900. You spent $1,200, so you lost money. Thus your goal is to optimize your campaign to lower your cost-per-click so that you receive additional clicks for the budget which in turn can achieve more conversions for you. Bottom-line, we need to perform math with projections when determining optimal budgets.

Smallbizlady: How long should a small business owner be prepared to run a pay per click campaign in order to see real results?

Paul Mosenson :  A number of considerations here.

1. If you’re an ecommerce site with a short buying cycle, you should start seeing results sooner rather than later, as audiences looking for product are likely close to purchase.  If the PPC campaign is structured properly you should start seeing conversions quickly.  Much depends on the structure and usability of your ecommerce site, and your level of competition.
2. If you have an expensive product and service, and the buying cycle is long (6 months to 2 years), then you need to be patient.  Users at the top of the funnel are doing initial research on a solution and will likely come back to purchase if you have a proper lead nurturing process in place.  If you focus on lead generation via downloadable content, it may behoove you to give it some time while you evaluate the quality leads you receive.

Smallbizlady: What are the key metrics I should be tracking?

Paul Mosenson: There’s a number, but I’ll highlight 2 of the most common metrics:

Click-Through Rate: The percentage of clicks vs. impressions.  The higher the CTR, the more relevant the ad is, and the better performance you’ll receive.  Google rewards relevancy by giving advertisers higher ad positioning at lower bids.  Google uses a term called “Quality Score” which is a measure of relevancy.  When ads are aligned with keywords you’re bidding on, and the landing pages you direct traffic to are aligned with the ads, your Quality Score will be high, resulting in advantageous ad positions and more efficient bids.

Cost-Per-Click:  This metric can vary depending on your ad position, level of competition, and your maximum bid for positioning.  The goal is always to spend as little as possible within your budget, but you need to be strategic.  Most of ad clicks go to advertisers listed in the top 3 ad positions, so some trial and error is needed to maximize performance.  A good list of specific keywords and phrases (“Long-tail”) can help.  If you sell “financial planning services” the keyword may be competitive and your bid increases for better positioning.  A strategy may be to instead bid on “money management for small business” where there may be less competition and thus your bid to achieve top 3 position placement will be more efficient.  Again, quality score is key here as well.

Snallbizlady: How should I utilize the Google Display Network?

Paul Mosenson: Google lets you advertise text ads or banner ads across their wide variety of sites (thousands).  You can target by specific sites, site topics, or page keywords (matching your keywords to web pages that include your keyword, called contextual targeting).  There is also a remarketing option (target banner ads to those who have visited your site, but leave before the conversion is achieved).  All this can be done via pay-per-click rather than the typical CPM model. Some things to think about:

1. Search engines target warm leads, ads on websites do not, so advertising on the Display Network is more about branding and generating awareness rather than direct sales or conversions
2. Research has shown that display advertising contributes to increased lift in direct site traffic and search engine traffic. Social Media marketing also contributes to search marketing lift.  The issue of attribution is key here.  Most traffic analysis is based on “Last click” metrics, but the contribution of all other marketing messages, including online display ads does have some affect on overall site traffic building.

Smallbizlady: Should I include Bing, Facebook, or LinkedIn, knowing that there are Pay-per-click opportunities within those sites as well?

Paul Mosenson: Depending on budget and targeting goals, certainly testing other channels should be considered. Bing/Yahoo now garners 30% of the search share (Google still #1 by far), thus Bing costs may be more efficient due to less competition.  Facebook ads (those you see on profile pages) allow the ability to target specific user demographics and interests.  LinkedIn ads target a business audience with a wide variety of demographic (industry, title, seniority) and geographic options.

Smallbizlady: What are the steps to set up a campaign on Facebook, I know you can get really target the audience?

Paul Mosenson: There’s a link at the bottom of your profile page called Advertising which when clicked, takes you to a set up page. You write an ad, determine your URL landing page, whether it be a Fan page or external link, determine targeting- demographics, geography, and interests by keyword, choose a budget, and choose a maximum cost per click.  Facebook has a fairly new feature called Sponsored Stories which allows you to advertise when people like your fan page or like a wall post.  Clicks to Fan pages generally perform better than external link ads.

Smallbizlady:How about LinkedIn pay per click ads?

Paul Mosenson: Once you lig in to your account, at the top left is a link to LinkedIn ads, where again, you can write an ad, determine targeting, set up billing, and off you go.  I’ve heard mixed reactions to LinkedIn ads, but it depends on your ad quality and your targeting. With LinkedIn you can target by seniority, industry, company size, job title, and geography.

Smallbizlady: What are the best practices for writing text ads and landing pages?

Paul Mosenson: This is where us practitioners get creative.  You can have a great list of keywords and phrases and taking advantage of all the tools and match options, but of your ads and landing pages aren’t optimized, your campaign performances will suffer. Here’s a real quick best practice summary:

Text ads:  Compelling headline, unique benefit of your product or service, a key feature, strong call-to-action. Test 2 or 3 including a question format.  For lead generation, we suggest offering free content in the ad with a landing page for download.

Landing Page: Relevant to the search queries, bullet point key benefits, link to your home page, case study/testimonials, easily found call-to-action or lead capture mechanism with short web form for content download or demo signup. Consider A/B tests to optimize conversions

Smallbizlady: What are some key tips and tricks to optimize my campaigns?

Paul Mosenson: Here’s a few that stand out:

1. Utilize “negative” keywords which stop your ads from showing on certain queries. If you sell upscale boots like Uggs, use negative terms such as “cheap” and “used” to stop ads from showing and increase your click through rates.
2. Dynamic Keyword Insertion.  With Google and ad structure, you can make a user’s search query the headline of your ad, which can increase clicks and conversion rates
3. Organize ad groups carefully. Create you ad groups and ads first, then keywords. This will help you organize your campaign structure and reassure that the selected keywords are relevant to your ads and landing pages.

Smallbizlady: How do I best measure my campaigns?

Paul Mosenson: No campaign I set up is stand alone; it includes integration with Google Analytics.  The real measure of keywords and campaigns is goal conversion rates, which you can track with Analytics.  Google Adwords allows Conversion tracking, which means putting a code on a conversion “thank you” page, but with Analytics, you can track engagement goals, e-commerce goals, content downloads, and levels of conversions, such as pages visited, time on site, in addition to “thank you” page visits.   The bottom line is preparing a channel ROI analysis.  Simply- Net profit (gross revenue minus margin) generated minus ad cost divided by ad cost.  By having proper goals and metrics available, only then can real success be determined.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter.  Here’s a link for how to participate in #Smallbizchat http://bit.ly/S797e

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure.  As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine recently named her one of the Top 20 women for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog www.succeedasyourownboss.com Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)