Steps To Make Money Online

I don't understand how my competitors can afford to outbid me

Maybe they can't afford it - and haven't yet discovered that they can't afford it. They may simply be caught up in the bidding war machinery. But, it's also possible that lower operating costs or higher profit margins allow them to spend a larger chunk on cost-per-click. Or, they may be getting higher conversion rates for certain keywords than you do. Study their search ad copy and research their website - you might pick up some tips on improving the conversion side of the equation on your site.

In the meantime, know that you are bidding the amount that fits your business requirements and your conversion rate.

But I don't sell online

Even if you don't sell online, you may be able to attach some monetary value to each of your website goals. Consider how much each lead you gain from your website is worth and use that to determine how much you should be spending for cost-per-click.

If you are a B-to-B site, you may convert your leads into sales offline. If you know that your sales staff closes 5% of your website leads for an average transaction profit of $1,000, you can calculate your break-even benchmark as follows:

Break-even benchmark = website conversion rate x 5% x $1,000

For a keyword that yields a visitor-to-lead conversion rate of 2%, and assuming that you can allocate $1,000 per transaction for cost-per-click, your break-even benchmark will be:

2% x 5% x 1,000 = $1 per click

Managing, not just measuring

Getting the most out of cost-per-click means that you must continually monitor your results with Google Analytics so that you don't over-bid. Think of web analytics as an online marketing management tool - experimenting, testing, and always improving your cost-per-click strategy to maximize your website ROI.