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I’ve been reading a lot lately about trading systems – that is, rules-based strategies for making short-term investments in stocks or other securities. So far, most of my personal stock purchases have been made in more of an “investing” mode, as opposed to trading. In other words, I’m buying stocks that I think are undervalued or that have strong future prospects, in order to realize long-term appreciation in the stock prices. Trading is completely different. It is based purely on things like volume of purchases and momentum.

What’s the point, you ask? It’s that there is a strong correlation between the trading of securities and the management of a paid search campaign. For instance:

  • When trading, you are buying something at one price in hopes of selling it at a higher price. In pay per click management, you are biding a certain price for a click in hopes of turning a profit on it.
  • When trading, many, if not most, of your trades will be losers, with the hope that your winning trades outweigh your losers. In pay per click management, most of your clicks will be losers, with the hope that you have enough clicks that convert to outweigh your losers.
  • Trading involves a set of stocks or other securities. Pay per click management involves a set of keywords or web sites.

One major area of difference between a trading account and a paid search account is that paid search has a strong creative element. Even if you do the math right, if your ads are lousy or your landing pages are lousy, you’re still going to lose. But we have some ideas that we think will make the creative side easier even for novices.

We have begun work on our newest book, that will be a rules-based strategy guide for managing paid search accounts. This one will be shopped around to real publishers, rather than publishing it ourselves as we have in the past.

For the time being (until you get a chance to buy our book), the point is to think of your pay per click campaign as an investment. Your keywords are the entities (your securities) that comprise your portfolio of keywords. Some keywords are going to make you money, and some (if not most) keywords are going to lose money. You need to figure out which ones are your winners.

If you need some help with your pay per click management, contact Work Media at 888-299-4837 or email Info@WorkMedia.net.