According to JupiterResearch, pay per click spending will overtake banner ad spending in a few years. In that time, online consumer spending will double.

It is obvious that any company that wants to have an e-commerce presence has to invest significantly in pay-per-click traffic. Starting a PPC campaign is overwhelming and the costs associated with ads could scare anyone away. And there’s no doubt that Google is making tons of money off keyword bidding.

First and foremost: Don’t Panic. Don’t let the cost scare you.

For Example: Let’s say to get a position of number 1 with your keywords; it costs $500 a day. That’s a lot of money for any business, big or small. But if that investment returned $1000 in sales (maybe), $2000 (better), $5000 (seems like a no brainer). Of course that ROI magic number is different for every business.

Tracking is Key
Once you determine how much you are willing to spend per dollar you make. Now you need to make sure you can dollar back to your ads. To do this every ad must have a tracking ID that directly connects to a sale. Tracking ID’s are the key to ROI with PPC. We often hear stories of companies complaining that their Pay-Per-Click expenses are too high. Well if tracked properly and constantly monitored, then you can directly trace all ads. If ads are bringing it revenue then quickly make adjustments (I will discuss those adjustments in another article). If you are ads are not making money through then try different keywords and different angles. There is a niche for you; you just have to find it.

How To Track Ads
There are several ways to track ads. Google and Yahoo both provide scripts that help you track ad conversions. Although for the complex websites and companies that have a little more capitol to invest, there are better approaches. Advanced web analytics software, such Omniture’s Site Catalyst and WebTrends, provide much more extensive reporting features. These tools help you trace your ads down to the exact dollar spent and exact dollar made. That’s invaluable information to any search marketing campaign.

As you see with the overwhelming costs of pay-per-click, the spending is increasing daily. To compete you must spend more and more. Despite what you may here pay-per-click IS an exact science if all of the appropriate measurement tools are in place. Tracking links and tracing ads back to revenue is the key to search marketing spending.