Wow, great advice, Sherif.
Another reason people use landing page (or squeeze pages) is that some people prefer to collect email addresses because they understand most people do not buy on the first exposure.
So let's say you're bidding on the phrase "ppc advertising" and instead of sending them directly to the Clickbank merchant page that advertises a product that teaches people how to master PPC, advertisers often send the visitor to a short squeeze page asking for an email address in exchange for a free e-book or report they've created.
It's a small page with nothing but a benefit-rich headline and a few paragraphs that does nothing but attempt to get their email address. So it may be something like...
20 Ways to Master PPC - Free Report!
Simply enter your email address below and I'll send my exclusive free report on how to get the most out of PPC advertising. I guarantee it will help you double your profits in three weeks....
Then once they have the person's email address they sign them up with an autoresponder that continues to market to the product(s) in question.
This is a much more indirect way of using PPC advertising, but it can be very effective if you know what you're doing because the whole idea is most people do not buy on the first visit. They need repeat exposures to the product. So collecting their email and following up with more benefit-rich information is a great way to PREsell the product.
I've read quite a few e-books on people doing this and many are successful but it takes a lot of trial and error. As Sherif said it's about finding the right keywords and experimenting until you find a combination that works. If you do decide to collect emails and indirectly promote the product like this, you have to be very careful that you don't wear out your welcome and only send relevant, useful information or your visitor will unsubscribe. It's a very delicate process but can be very rewarding if you learn to master it.
I think it's great when people can master the process of getting the person to buy directly from the merchant's landing page but I understand why so many people create squeeze pages. You have to build up that credibility AND if gives you more than one shot at the sale.
I agree with Sherif 100% on the web hosting bid issue. The reason your conversion is low could be that is such a generic term. You don't know if the person searching for "web hosting" is someone who already has a host and is looking to compare hosts or if they're a first-time builder trying to buy a host for the first time. So from the start, it isn't quite clear what they have in mind.
But if you bid on something like "dedicated unix hosting" this is obviously someone who knows a bit about hosting and may be looking to compare hosts. They're probably a bit more savvy when it comes to web hosting and may be more apt to pay a higher price. In this case, it would be a good idea to create a review of some of the dedicated hosting plans and send the visitor to your landing page rather than the merchant page. The review will help you build up your credibility and it will likely be a page they will research and come back to.
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