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An Introduction to the Kelly Formula

Today we’re going deep. We’re going to examine a mathematical equation created years ago by a guy named J. L. Kelly. Kelly was a brilliant man who devised a formula that is so rudimentary, yet so critical, it is the foundation for many systems in the world...

Designing a Pay per Click Management System

In the course of working on our latest book, I have put a lot of thought into the concept of a trading-style system for managing a paid search campaign. There is definitely a correlation between investing in securities and investing in paid search. Every keyword you...

Thinking Hard About Pay Per Click Management Strategy

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,...

Search Engine Marketing: Not All Keywords Are Created Equal

We have given advice on numerous occasions about using an ROAS (Return on Ad Spend)-based approach in setting your initial bids. In other words, don’t just GUESS what your opening bids should be – use some logic to set a bid that will allow you to make a...

Preferred Cost – Using Google's New Ad Pricing Technique to Reduce Your Risk

Traditionally, bidding on clicks in a search engine has been a hit-or-miss proposition. You set the MAXIMUM you are willing to pay for a click, and then your actual click cost usually ends up well below that. To play the game, you have to be willing to bid high to get...

Pay-Per-Click Marketing: Expand Your Horizons

The American pay-per-click market is getting crowded. You can still keep costs down by taking a “long-tail” approach (looking for lots of little used by highly targeted search phrases for which to run ads), but with growth in paid search revenue for 2007...