Guaranteed placement comes at a cost

Pay per click advertising on search engines can mean a big boost to your site traffic, especially for a brand new website. It can also be a bottomless pit that your site's marketing money disappears into with no visible results.

PPC allows a site owner to bid on a specific keyword and an ad position. These ads are usually displayed above and along the right side of the search results. PPC ads are also known as sponsored links.

The two major search engine providers of PPC advertising are Google and Yahoo/Overture. Both services display ads on their own search engines, partner sites, and sometimes, websites related to that keyword.

For brand new websites, PPC ads can give your site search engine visibility in the first few months of life, as it usually takes this long for search engines to index and begin ranking your site's pages for keywords.

For established websites, PPC ads can give you an edge over other real estate sites, especially in competitive areas. By appearing on the first page of the search results, you can increase your chances of capturing site visitors.

The main pitfall of real estate PPC campaigns is cost. Since the real estate industry itself is highly competitive on a local level, some PPC bid amounts have become outrageous. Here are some current examples:

These are "Max Bids," the maximum amount the bidder is willing to pay per click. It is usually not your actual cost per click. CPC is figured on both Google and Overture like this: no matter what your max bid is, you pay only one penny more than the next lowest bidder.

For example:

Site A's max bid is $1.00 for the #1 position.
Site B's max bid is $.75 for the #2 position.
Site C's max bid is $.50 for the #3 position.

Site C's actual CPC is $.50
Site B's actual CPC is $.51
Site A's actual CPC is $.52

Once you open a PPC account, both Overture and Google offer tools to determine approximate CPC for budgeting purposes. You can also set daily spend limits for your ads. Once your click through cost has equaled your daily budget, your ad will not be displayed until the next business day.

How well your PPC ad is written will determine your conversion rate and your ROI. Since you are paying for every click, a poorly written ad that attracts unqualified visitors is a waste of marketing money. Many PPC ads for real estate we see, even from large companies, are not written to attract truly qualified leads.

You have a very limited space in which to write your ad, so every word counts and must be compelling. The average character count per line is 36 and most PPC ads are only three lines. Targeted keywords and action oriented phrases work best.

Be aware that both Google and Overture have ad standards and reserve the right to reject an ad that they deem is inaccurate or uses certain promotional language.

The first line of your ad should always be the keyword you are bidding on or a recognizable variation, if you are using one ad for multiple keywords. Your next two lines should showcase a unique feature of your site and include a "call to action." If you offer a free service, like a CMA, you should mention it here.

Do not look on PPC as a magic bullet to cure your site traffic woes: the average PPC click through rate is about 1.5%, about the same as a direct mail response. Your conversion rate will greatly depend on your site content.

There are two simple things you can do to maximize your CTR:

Do not put your ad into the Google or Overture Content networks. The Content network displays your ad outside the search engines on other websites related to the keyword. While this may be useful for an "impulse buy" type of product, it has not shown to be effective for real estate websites.

Make sure your ad is set to display only for an exact keyword match. Using a "broad match" where your ad would appear for any word within your keyphrase will cause impressions (and visits) for non-qualified searches, costing you money. For example: a broad match campaign for "New York luxury condos" will appear for searches on both "New York" and "luxury condos." While the impression itself does not cost, these unqualified impressions will lower your CTR substantially.