This is a guest post by CT Moore.

As an affiliate, PPC represents a serious source of targeted traffic. There’s a good chance the user is looking to buy and they’re already searching for targeted keywords.

Of course, mistakes in PPC can be costly, and both newbies and established super-affiliates are vulnerable to them. While a newbie might invest in all the wrong keywords or not cap their bidding, super-affiliates can be running such a high-volume of keywords that a momentary miscalculation can result in a lot of costly clicks that don’t convert.

So when it comes to PPC, there are three things an affiliate should makes sure they have backing them up: (1) solid tracking, (2) proper campaign set-up, and (3) the right monitoring tools.

Affiliate Tracking: The Ground Work

Google Adwords offers great reporting on impressions and clicks, but when you’re referring that click to through to a merchant, it can’t tell you about actual referrals/conversions. So before investing in PPC, you want to make sure that the program you’re sending PPC traffic to can provide such tracking reports.

Because the real cost of a click is determined by what you paid for the click minus the revenue that the click generated, being able to track what a keyword costs you, how well it converts, and the value of that conversion, is essential to properly managing your PPC campaigns. So optimizing your PPC campaigns requires that you have detailed reports on users referred, the value of transactions, commissions, the revenues generated by each PPC ad, and what kind of consumers are coming through on which keywords.

To do this, you will want to make sure that your affiliate program lets you create custom affiliate links that include additional variables, such as the keywords you’re targeting. By referring your PPC traffic to those URLs, you’ll then be able to track the ROI of you different PPC campaigns.

PPC Campaign Set-Up

Controlling you PPC spend starts at the campaign level. First, to get keyword ideas, look at the organic keywords that are converting for you, and then run them through the Adwords Keyword Tool. By comparing the search volume, click-through-rate (CTR), and average conversions of the results, you will be able to come up with some relevant keywords worth investing in.

Second, you have to decide if you’re going to run ads on both Google’s Search and Content networks. If you’re just going for the search network, fine. If you’re going to run ads on their content network, as well, it’s important that you create identical campaigns: one for search and one for content. This will help you determine which keywords work where, optimize ad groups and keyword bids for each network respectively, and better control your budget.

Third, if you do run content campaigns, you will also want to use site and category exclusions. This will save you money on paying for untargeted clicks, and help you maintain your Quality Score by preserving your CTR:

Another way that Google gauges the relevancy of a page is by monitoring how many people click-through to it from the search results. The more frequently that users click your ads, the higher the Quality Score your ads receive. Google does this to reward advertisers who show their users the most relevant search results. [...]

Google will also give your entire Adwords account a Quality Score. So the CTR of all adgroups in your campaign in your account will be considered against your Quality Score.

Finally, check the Quality Score of your individual keywords. You will want to pause any term that has a Quality Score of four or less and/or has zero conversions. Although a lower keyword Quality Score means a lower cost-per-click (CPC) and first page bid estimate, it will also mean that both the overall ranking and you CTR will be poor.

Managing Your PPC Bids

Once your campaigns are running, you are going to have to monitor CTR and conversion data, pause low-performance keywords, and test out new variations. Using an automated tool to do can save you time and help you react to trends more quickly. This is especially true for affiliates who promote several programs and/or products.

Automated solutions come with varying degrees of complexity. On the more advanced end, Acquisio SEARCH offers PPC software that shows you which keywords should be paused, emails you about poor Quality Scores, and lets you use bid management tools to set maximum CPCs according to variables like first page bid estimate.

For the affiliate who’s just starting out in PPC, there are also platforms like BidMax or Shoemoney Tools. These solutions are more affordable and much more appropriate for smaller campaigns.

For everything that automated PPC tools can do for you, they can’t replace regularly scheduled, hands-on maintenance. After all, automated tools only crunch numbers. It takes a marketer to interpret them.

Fine tuning your campaigns and conducing A/B testing will still be essential to optimizing your PPC campaigns. Automated tools will just help you do the heavy lifting.

PPC & Affiliate Marketing

The potential of PPC is as a source of targeted traffic. If you approach it in the right way, there’s no real risk involved. PPC is a bidding system, and you don’t have to bid on what you don’t want. You simply set your PPC budget according to the value of your average cost-per-acquisition (CPA). Once you know what the average CPA of one of your users is, you can then compare that against other variables, such as average CPC and CTR.

Getting the most out of it, of course, requires that you scrutinize the numbers on an ongoing basis. As your campaigns grow, you might require some automated help, but even automated algorithms can’t make all your decisions for you. You’re still going to have get in there and get your hands dirty from time to time.

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An accomplished writer, blogger, and speaker, CT Moore is a new media strategist who helps brands reach their business goals by building and optimizing online revenue strategies. By day, he is an account manager for the interactive marketing agency, NVI.

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