There are numerous pitfalls associated with PPC advertising. These pitfalls essentially result from inefficient management of information or mismanaging the bidding strategy. The objective of pay per click advertising is to drive traffic to your website by bidding on keywords, which searchers enter into a search engine. The word-based ad appears on the page of results and its prominence on the page is determined by the amount bid on the keyword.
A significant number of errors can be committed by employing search settings which fail to place your ad in front of your target audience (which results in little or bad traffic) or placing your ad in front of too wide an audience (which results in excessive costs or bad traffic). Search settings such as geographic targeting or advertising on content networks can result in these types of errors.
Another error associated pay-per-click is failing to test variations of ads to optimize for traffic quality and price. Users can avoid these errors by utilizing multiple ad groups and multiple ad words. Overtime, non-performing ads are removed while converting ads are run more frequently. This aspect of accountability is what makes ppc advertising more credible than traditional advertising channels.
The ultimate goal of PPC is to maximize the return on investment (ROI) of advertising costs. This achieved over time through the continual testing of ad message, content, and placement. The cost to acquire a customer (as calculated by the number of clicks it takes to get a customer) is compared to the price of the product to determine the ROI. Ultimately, the goal is to pay as little as possible for the acquisition of each sale and the proper management of the ppc campaign is the basis for accomplishing this.