Search Engine Optimization Provider,Website Promotion Guides,Pay Per Click Advertizing,Seo Copy Writing

27th June 2007

The Content Providers: How Much To Bid for Traffic?

By : Nidhi Gupta

Introduction

While many articles have been written on Pay Per Click ROI calculations for ecommerce providers, very little has been written for the content providers. This article will focus on how a content provider can determine how much to bid when running a pay per click campaign.

Revenue Per Visit Calculation

To determine how much to bid, the revenue per visit needs to be determined. The model presented is simplistic enough that the inputs can be easily gathered from a web analytics program.

The first step is determining the value of a page. To do this, first determine the average CPM of the ads shown on the site. Take this CPM and multiply it by the number of ads per page and divide by a thousand. This gives you the average revenue per page.

The next step is to take this average revenue per page and multiply it by the average number of pages consumed per visit.

The calculation is relatively simple.

CPM x Ads Per Page
————————— x Pages per Visit = Revenue per Visit
1000

This number is the expected revenue from a visit. This is how much you expect to make per visitor. This should be your maximum bid when purchasing terms.

Example:-

Assume a fictitious firm that produces sports content. Their CPM is $14; Number of ads per page is 2; pages per visit is 5. Using the formula the maximum I should bid is
.14.

14 x 2
——– x 5 = .14
1000

Implementation

Now that the value of a visit has been determined a set of keywords can be built up from the content provided. Other articles and tools exist to help you determine which words are searched on more frequently. In this stage, bid at half the level that was determined above. This gives a good starting point. This means for every visitor that clicks on your ad you make the same amount as you bid.

Example:-

Continuing the scenario, with a revenue per visit of .14, I would bid .07. I receive .14 in revenue and pay out .07. Making .07 in profit.

.14 – Revenue per visit
-.07 – Cost per click (To Search Engine)

Get More Details At : marketposition.com

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