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Should your business consider Pay Per Click advertising?

February 19, 2008

First of all let’s clarify just what pay per click (PPC) advertising is. Using Google as an example, it’s the ads that appear on the right hand side of the search results pages under the heading “Sponsored Links”. The ads may also sometimes appear above the organic search results on the left hand side.

When somebody clicks on one of the ads, the advertiser pays a small fee to Google. That fee is derived from how much the advertiser has bid to pay on the keyword phrase that resulted in the ad being displayed.

You may also see PPC ads identified as “Ads by Google” on third party web pages. The website owner receives a small portion of the click fee.

“There’s no point, nobody clicks on them, they’re a waste of time” you might argue.

Well in 2006 Google’s revenue from advertising was just under $10.5 billion. And in 2007 that figure grew to $16.4 billion external link . That’s a lot of clicks and a lot of money paid out by advertisers for “pointless” advertising. In fact, as an advertising medium, it is absolutely huge and the lifeblood of many thousands of businesses around the globe.

The argument may continue: “That may be ok for big businesses with massive advertising budgets, but how can small companies compete?”.

Well that’s where PPC has an advantage over traditional advertising methods. With a bit of research and understanding you can not only level the playing field, you can also steal a march on the big guys.

Those big players with deep pockets will just bid whatever it takes to get a prominent placement for the most obvious and popular keyword phrases. But for them it’s something of a scatter gun approach. What many of them don’t seem to realise is that PPC is not about getting as many clicks as possible, it’s about getting clicks from only the searchers who are specifically looking for what you have to offer. Their ads appear in front of the wrong people and they waste money on irrelevant clicks.

The trick is to research the keywords that are directly relevant to your customers. Then carefully craft the ad wording and target it to make the all-important connection with those potential customers and deter the “tyre-kickers”. Finally your web pages must be sufficiently enticing to make the sale. The key is to be precise. Consider such things as the location, demographics and the requirements of your market. Home in on your niche.

“But how do I control the cost, if I have to pay out for all those clicks?” Well that’s simple. You set the budget, you control how it is utilised, you monitor the click-throughs to see what happens when people land on your site. Do they “bounce” straight out again or do they “convert” into customers? Which pages perform well and which perform poorly? By testing and refining, you can achieve more clicks for less cost. Of course the greater your budget the greater your market, but you never spend more that you can afford.

Needless to say I have only scratched the surface here.

Do it right and PPC can open up whole new avenues of business for you. Do it wrong and you can be wasting time and money. More to come soon.

Filed in: Pay Per Click