1 What is PPC?
“Pay Per Click” or PPC advertising has taken the internet by storm over recent years. In an ever competitive marketplace, advertisers, comfortable with ‘traditional’ advertising options, have begun to embrace the development of all media advertising, allocating substantial budgets to the development and monitoring of effective and PPC campaigns.
The basic premise is as follows:
When a potential visitor searches and chooses to click on your PPC advert, they get directed to your web site, and you are charged the amount you bid. So, if you bid £0.15 per click on ‘widgets’, and that’s the highest bid, you’ll probably (note probably) show up first in line. If 100 people click on your PPC listing, then the search engine or PPC service will charge you £15.00.
The search engines use complicated and ever changing algorithms to allow them distribute your budget through the day. This ensures that campaigns with limited budgets can get exposure throughout the day, but will also mean that your website link may only appear for a percentage of the searches undertaken that suit you keywords.
The key to ensuring good results is good management and a clearly defined outcome.
2 The Plus Points
One of the clear advantages of the PPC advertising over more traditional methods is the ability to track and effectively gauge results of the budget spent on your campaign.
Legendary American retail pioneer, John Wanamaker, is famously quoted as saying “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” In truth, even this statement is far from the truth with a generally acknowledged norm of 1-4% of generic advertising ‘working’.
A well managed, tailored and monitored PPC campaign can remove much of the hit and miss of traditional advertising, providing accurate, clear results and allowing the campaign to be fluid moving and adjusting to the visitor reaction and campaign requirements on an ongoing basis.
Pay-per-click advertising has a quick set-up and money spent will immediately translate into clicks through to your site. This means that PPC advertising delivers immediate results, unlike Search Engine Optimisation (SEO) campaigns. While an SEO campaign will ultimately produce more website visitors of a higher quality and lower unit cost, it could be months or years before you see the full benefit. If you need to generate online revenue immediately and have a business model which can support cost-effective PPC advertising, then a PPC campaign should form a key component of your Internet Marketing strategy.
Pay only for performance
PPC advertising costs relate to the number of visitors your site receives, not the number of times that your ad is shown. This ‘pay-per-performance’ model also allows advertisements to be delivered only in certain geographical locations and only on sites with related content. This results in targeted, high-quality traffic to your site, leading to a high conversion of browsers into buyers. PPC is therefore an effective way of selling goods and services. If you’re aiming to build brand awareness or launch a new product, pay-per-impression advertising may be more appropriate.
Total control over your campaign and your costs
PPC providers allow you to set upper limits on your cost-per-click and total daily spend, meaning you only spend as much as you want. This ability to set and adhere to strict campaign budgets, combined with PPC’s instant results, means that you can monitor the results of your campaign in real time. Poorly performing ads can be easily identified and revised, and your budget can be adjusted in light of the results achieved. This complete control over your advertising campaign allows you to respond to problems and optimise performance regularly. In contrast, the amount of time it takes for SEO campaigns to achieve results means that you will have spent the majority of your budget before there is any indication of whether the optimisation has been successful.
3 The Downside
Potential Spiralling Costs
One of the biggest problems with PPC advertising is that cost can spiral out of control. It can be easy to get caught up in a bidding war over a particular keyphrase and end up spending far more than your potential return, this can also tip the balance in the favour of competitors with large budgets or ‘money to burn’.
Bid inflation consistently raises the per-click cost for highly-searched phrases. This inflation is caused by ‘bidding war’ bidding and by the search engines themselves, who impose quality restrictions on many keywords. These quality restrictions increase the cost per click even if no one else is bidding.
Poor quality traffic can suck the life (and the budget) out of your campaign. Most pay per click services distribute a segment of their results to several search engines and other sites via their search partners and content networks. While you certainly want your listing displayed on Google and/or Yahoo, you may not want your listings showing up and generating clicks from some of the deeper, darker corners of the Internet. The resulting traffic may look good in statistics reports, but you have to separate out partner network campaigns and carefully manage them if you’re going to see a return.
Lack of Scalability
Finally, pay per click advertising does not scale. If you get more traffic, you pay more money in nearly direct proportion to that traffic – your cost per click stays constant, and your overall cost increases.
4 Who are the Key Suppliers?
Not only does Google receive more than 80% of searches conducted, they also have the largest inventory of display advertising today. This can be seen as positive as they will certainly return clicks to your site, however, competition for effective can drive costs up and reduce the effectiveness of your budget. If you are getting started in paid search you begin your advertising with Google Adwords.
Yahoo! is known as the 2nd biggest player in the paid search market. Yahoo! Provides a solid platform and decent exposure to the remainder of searching web user, additionally, providing a conversion and performance tracker not unlike that of Google’s.
Microsoft’s search engine currently ranks 3rd in paid search exposure. A large paid search inventory is not why you want to advertise on Bing. Instead, Bing is developing a name for giving the best cost per lead / goal on average than any other search engine. Additionally, 2011 saw Bing take over the number 2 spot in actual search queries from Yahoo!
Other offerings include Facebook, Ask etc…
5 Example Campaign
Scottish Holiday Park Company
In 2009, Intimation undertook the promotion of the new holiday park development of luxury lodges on the banks of a loch with a price range from £175k
Over the following 12 months, the client agreed to budget £500.00 per month to the Google keyword campaign to promote the sale of the initial stage development of 12 lodge holiday homes and also to promote the lodges as a holiday location as part of the service provided to “buy to let” investors.
The decision was made to allocate 33% to the letting side of the business and the remaining budget to sales element of the campaign. Over the twelve month period, the campaign achieved the following results:
- Advert Page Impressions: 605,568
- Clicks Achieved: 8,009
- Conversion Ratio: 1.32%
- Average Page Position: 5.7 (Page 1)
Using the Google Analytics, it was possible to track active enquiry form submission and allocate at least three lodge sales and numerous booking enquiries directly to the PPC campaign. During the period Intimation undertook reviews of the campaign results, paused the campaign as required and made keyword adjustments to make the campaign as effective as possible.
For further information or to begin your PPC campaign please contact us on 01620 829145.