In short, Pay Per Click Advertising is one of the most reliable ways to quickly send targeted traffic to any web page.

Pay-per-click (PPC) advertising can be so effective that some companies use it as their primary online marketing channel.

But even with this said, there is a significant amount of inherent risk in PPC advertising. Targeting the wrong keywords, bidding too high on the wrong terms and a poor PPC management strategy can mean the difference between generating highly qualified leads who can help build your business and losing every invested penny.

That’s why we almost always advise our clients to focus on creating a better performing website before moving onto outbound advertising strategies.

Here is quick overview of pay-per-click advertising, what it is, how it works and the pro’s and con’s of using it.

What Is Pay-Per-Click Advertising?

In short, pay-per-click is an advertising medium that involves Google and other search engines to allow businesses and individuals to rent ad space in their search results.

These paid ad spaces appear alongside organic search results, and are an excellent way to get a product directly in front of consumers without having to spend the time building content and backlinks to reach the first pages of the search results, which can often take months or even years depending on the niche.

Which specific ads are shown is determined through an auction-style bidding war, where the advertisers (in this case, your company or PPC Consultant) bid on niche-related keywords and terms that they want consumers to click on.

By being the highest bidder for a search query an advertiser can potentially land the number one advertising spot for that phrase. Ad location is also partly determined by an advertiser’s quality score. Quality score is basically a fancy way Google decides whether or not your ad is going to a page with relevant content.

So if a new software company bid their way to the top for the term ‘voice recognition software’ and started receiving clicks from targeted consumers who landed on their website, then that company would have to pay Google their final bid amount for every click.

So if this company spent $1.45 for every click (which is really cheap in terms of click costs) they received from people looking for ‘voice recognition software’ and in the first day they had a total of 50 clicks, then it would cost them $72.50 at the end of the day.

Pro’s

The biggest advantage to using PPC advertising is that it generates targeted web traffic immediately.

The process is dangerously simple: Have a large enough advertising budget, bid your way to the top ad placement, write enticing ad copy, and receive clicks.

Another huge PPC benefit is that this type of advertising is incredibly nimble. While organic search engine marketing, social media strategies, and community outreach tactics can take weeks to months to accompany the audience’s rapidly changing behavior, a pay-per-click campaign can be modified to fit current market conditions right away. And sure, these types of marketing matter, but most start-ups and small businesses with a limited budget need results now. Instantaneous results that can only be achieved through pay-per-click marketing.

In addition to this, PPC advertising allows advertisers to uncover hidden gems and neglected keywords related to their niche that can cost less than a dollar per click.

Con’s

PPC advertising can cut out a large portion of monthly advertising budgets, especially when those PPC campaigns are being run by beginners. There is a reason why so many companies hire a PPC consultant.

When bidding on keywords it can be incredibly easy to get caught up in the moment and start a bidding war with someone who, unbeknownst to you at the time, is backed by a Fortune 500 company with a nearly unlimited advertising budget.

Bidding with urgency and emotions is referred to as “ego-based” bidding, and it can cost companies thousands of dollars. A combination of ego bidding and quality control from the search engines can result in significant price inflation for popular words and phrases. Some terms cost over $30.00 per click!

Another downside to using PPC advertising is that it does not scale perfectly. The more traffic your receive from the advertisements, the more money you pay. While cost-per-click will remain linear, overall advertising costs pile up.

The biggest danger though is when companies spend a lot cash on PPC but are sending traffic to a site that is NOT designed to convert visitors into leads. If your site only converts 1 out of every 200 visitors and you are spending  $5.00 per click, then that means it will cost you $1,000.00 to acquire a new customer. This may be a great cost of conversion for a b2b company with a large margin on a single sale… but it can be impossible to make work on low margin products.

 

Goals Of Pay Per Click

Don’t look at pay-per-click advertising as the end-all be-all of digital marketing tactics, but it’s definitely can be a great addition to any marketing arsenal, as it can be used to achieve several different things, such as:

  • Campaign-based traffic: Short term PPC campaigns are an excellent way to generate buzz around a new product, service, idea, or for PR or re-branding efforts. A quick campaign can be assembled in as little as 24 hours, and if you find that halfway through the campaign that you’re ad copy is targeting the wrong audience, then you can easily adjust the message you’re trying to convey to consumers. While all online marketing matters, if you need quick, definitive traffic, PPC is a go-to source.
  • Direct-offer testing: PPC is commonly used to place targeted visitors in front of products or services that they can purchase right away. Online eCommerce stores, SaaS companies, and brands who need products purchased now are good examples of companies who can immediately reap the benefits from measuring customer response with short term PPC campaigns.

Pay-per-click has evolved to the point where it’s considered a basic digital marketing tool. There aren’t too many companies out there who can afford to ignore PPC advertising. If you want to learn more about getting started with PPC, feel free to contact us today for more information.