How Day Trading Concepts Can Improve Your PPC Campaigns

by : Bruce Hill

Successful day traders use many different trading strategies, but one thing they all do well is manage their money. Applying these same ideas to your PPC campaigns can really improve your success. We'll look at a few day trading concepts and then discuss how they apply to PPC:

Each trade should only be a small portion of your total capital - Good money management dictates that you put only a fraction of your total investment (PPC spend) in any one trade (campaign). As you experience success, you would increase the amount you would spend on any one campaign. If you have a series of losses, you would decrease the amount you would commit to any one campaign. Using this approach will allow to "stay in the game" much longer. The smaller the percentage you commit to each campaign, the more losing campaigns you can have before you are forced to stop advertising.

Ex. - You could allocate 10% of your new PPC spend to each campaign. If you started with $500, you allocate $50 to each campaign. If a series of profitable campaigns increased your spend to $600, you would allocate $60 to each campaign. If a series of losses dropped your spend to $400, you would allocate $40 to each campaign.

Have a stop loss - For each each campaign, you should have a maximum amount you're willing to commit to find out if the campaign will be successful. Generally, you should use the allocation amount from preceding paragraph

Cut your losers - Daytraders are notorious for going into "hope" mode on a losing trade. They become emotionally attached to a trade and hope the loser is going to become profitable. Don't do this with your PPC campaigns! If you set an adequate stop loss in the previous step, you'll know when it's time to shut down a campaign. Remember, losing campaigns tie up resources that could be used to investigate new PPC opportunities.

Ride your winners - This rule is even more true with PPC than it is with daytrading. In trading, you never know when a profitable trade might turn south on you. With PPC, once you've established a profitable campaign, you can be comfortable increasing your investment in that campaign. Having said that, I would definitely keep an eye on the money-making campaigns to look for signs of weakness (declining profitability).

There is no perfect answer for new campaign spend, stop loss, or campaign reinvestment. However, if you follow the general money management principles outlined above, your PPC efforts will be rewarded with more profitable campaigns and less stress about PPC spend decision making.