Pay Per Click Advertising
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What is Pay per Click (PPC) Advertising
Pay per click (PPC) is one of the main Search Engine Marketing (SEM) strategies undertaken by markets in search engines, ad networks, and content websites and blogs, where advertisers are only charged when a user clicks on their ad. Keywords are bid on by advertisers to target their customers based on the search terms used when they are looking for a product or service. When a user enters a keyword query matching the advertiser's keyword(s) or views a page with relevant content, the advertiser's ad may be shown. These are called a "sponsored link" or "sponsored ad" and appear next to or above the "natural" or organic search results or anywhere a webmaster/blogger chooses on a content page.
Pay per click ads may also appear on content network websites. In this case, ad networks such as Google AdSense and Yahoo! Publisher Network provide ads that reflect the content of the page where they appear and might be relevant to the reader/viewer.
While many companies exist in this space, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the largest network operators as of 2007. Minimum prices per click, often referred to as Costs Per Click (CPC), vary depending on the search engine, with some as low at $0.01. Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against this.
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Advantages of Pay Per Click Advertising
1. Targeting
The larger pay per click network operators have a very targeted approach to serving pay per click ads. This allows the advertiser to display ads that are more likely to be relevant to the viewer who is then more likely to click on the ad. In theory, all parties concerned benefit; the user gets an ad that makes sense, the advertiser gets a click-through and a visitor to their site, and the ad network gets paid. Typically you will be able to select one or several of the following attributes for targeting:
- geographical location (geo-targeting)
- age
- gender
- day of the week
- time of day (morning, afternoon, evening/night)
2. Cost-effective Advertising
When online advertising was starting, the typical model was a cost per impression (typically CPM or cost per 1000 views of your ad). It was difficult to accurately track return on investment (ROI), campaigns were more complicated to administer, and it was more difficult to set a monthly budget for your online spend with the level of granularity that is offered with pay per click ads. With pay per click, you target a specific demographic or segment of user, you set the amount you bid for each keyword (i.e. hosting) or string of keywords (i.e. dedicated server hosting), and you can set a daily and monthly maximum. Based on historical data, many of the pay per click ad networks can give you an estimate of the amount of traffic you will get with the specifics you set out. For example, you may choose 'dedicated server' as the keyword, '$1.00' as your maximum bid, and 'Vancouver' as your geographical target. The network can estimate the number of clicks you would receive with those parameters, and before the campaign even starts, you can make adjustments that will improve the ROI. For example, with $1.00 as the bid, you may only get a single click or a small number of clicks, but if you increase that amount to $2.00, you may reach a large enough audience to convert a click in to a completed sale.
3. Scalability
A huge advantage of pay per click ad networks is the scalability of your advertising campaign. Looking to increase leads? Simply increase your bid, add an additional campaign with a slightly different set of keywords, or include a limited time or seasonal promotion, like a Christmas or Boxing Day sale. If you find yourself in a bind and need to trim some costs, you can instantly decrease the daily or monthly spend for a campaign, decrease your bid on a keyword or string of keywords, or suspend a specific campaign.
An Overview of Advantages of Pay Per Click Ads
- Target geographical and niche markets more precisely using specific search queries.
- Placement at the top of search engine results pages without having to master complex search engine algorithms or pay an SEO expert (i.e. artificially instead of organically).
- Receive new traffic instantly.
- Submits a website or offline store to the search engine (and their users) even if no site exists or the site is not search engine compatible.
- Allows small to medium-sized businesses to operate globally and compete effectively with larger businesses.
- Instant sales and measurable ROI using conversion tracking.
- Allows for precise visitor pathways to be plotted (e.g. funnelling visitors to specific pages).
- Campaigns can be switched on and off instantly in response to specific needs, search trends or specific events (e.g. Summer sale)
Managing PPC Campaigns Effectively
As time is money, good search marketers understand that one should concentrate on the importance of each component. Just as PPC costs have to be in line with PPC revenues, so does how time is allotted.
The following is a rough breakdown on the proportion of time search marketers should spend on each component:
- Term List: 50%
Like anything marketing to the right people is critical. Getting the right terms determines this. - Bid Management: 30%
Just as pricing your products and services correctly is important, same is true with your bids. Unless you price them right, your terms will not reach the right people (i.e. higher bids on key words that have higher success rates and vice versus) - Landing Pages 15%
While it is important that landing pages need to look good and convert well, obviously getting to the right people with the right packaging is more important. With landing pages, they should be simple, compelling and driving to sales (they should not sell the whole story). For more this - Landing Pages - Advertising Copy 5%
When writing your advertising copy, the most important thing is to remember, bad copy is far worse than great copy is good, especially given the relevance. So whatever you write make it good. For more on this see Writing Advertising Copy
