Pay per click marketing, with an estimated turnover of $1.1 billion per year and growing at 13 percent per quarter despite the economic downturn, has become vertically integrated into the Internet marketing arena.
Emerging from the banner ads and click through rankings of the early 2000s, pay per click saw initial innovation when Google introduced AdWords Select in early 2002. Google now controls about 50 percent of the PPC market share, followed by Yahoo at 25 percent. AdWords shows the selected ad near relevant search results, as well as on content and search sites within the Google Network.
Pay per click is an Internet-based advertising model used on search engines, content websites and advertising networks where advertising clients pay only when a consumer clicks though the ad to visit that client’s website.
Typically the PPC ad is based on keywords to reach a designated target market. When the consumer enters a keyword or phrase into the search engine that matches the client’s keyword list, the ad is displayed. The ads appear adjacent to or above the natural search engine results.
The largest PPC providers currently are Google AdWords, Yahoo! Search Marketing and Microsoft Ad Center. The minimum cost per click (CPC) varies based upon competition for the keywords and the search engine’s standards.
Return on investment (ROI) has been the watch phrase since the auction-style bidding process began. The type of pricing model for PPC advertising is dependent on marketing drivers. Current pricing models include a wide range of drivers.
Percent of Revenue pricing is dependent on performance or conversion rates. There are difficulties in tracking buying patterns, as consumers often visit a site more than once before purchasing. There are no economies of scale for the client; if revenues double, then fees double.
Percent of Ad Spend pricing is common when using a Search Engine Management Agency (SEM). Pricing is determined as a percentage of the advertising budget. The standard range of percent of ad spend is 10-20 percent of the total advertising budget. This counters the tracking problems, especially mixed media issues (where a client may be influenced by print and web ads in the buying decision). It also eliminates the tracking issue of multiple visits prior to purchase. For smaller companies, or smaller advertising budgets which may not be as attractive to SEM agencies, a flat rate or hourly fee structure may be more attractive for both parties.
Beginning a PPC campaign is an easy and potentially inexpensive process, with AdWords campaigns beginning at just a few dollars. The set up requires no specific changes to a web site, other than the necessity of a landing page.
Google, Yahoo and other popular search engines are seen by trillions of users every day. PPC marketing offers strong visibility without the more daunting process of Search Engine Optimization (SEO). The ads are seen on the first page of the search results, creating strong visibility for the company. Ads begin the day the campaign begins, with no waiting for indexing or search engine bots and crawlers.
Since the design of PPC is performance-driven, the client pays only when a consumer clicks on the ad. PPC allows constant control of what the ad says on the results page, and can be changed quickly.
The client chooses the bid total for each keyword term, controls how much is spent each day and can alter the campaign with a click of the mouse.
Understanding the keyword drivers for the demographics targeted is critical to a PPC campaign working. The bidding price for ads, the relevant search demographics and the conversion rate all hang on the accuracy of the keywords chosen.
Address the keyword in terms of where the consumer would be in the buying cycle when using that search word. Often, in the early stages of searching, consumers use broad terms with little definition. As they understand the available options and narrow down their buying factors, the search phrases gain more detail. Washer goes to front loading washer, which becomes GE Front Loading Washer, which could become Aspen Green GE Front Loading Washer. If choosing broad terms for keywords for ads, the conversion rate is less likely to be high.
It becomes critical that the corresponding web content supports the selected keywords. Often there is disconnection between the website and the ad. If the idea behind the ad is to drive the selected demographic to the website, once there they must see how this business addresses the issue for which they were searching.
The landing page of the website offers a reality check to the consumer. If it does not line up with the ad text, the consumer may click off the site immediately.
The site needs to support buying decisions. Can the consumer find the product or service easily? Is the phone number available? Is service support offered? Training the consumer to purchase once they are on the site is impossible if the site is not crafted to support buying.
Measure, Monitor and Analyze
Measure the results and track progress. PPC advertising can be a learning tool to understand the market reaction to the product, the brand and the ads selected. Metric-driven progression is critical to understanding what interventions lead to the best conversion rates and which keywords lead to consumers easily converted.
Ad testing is important. Changing the text, the style and the characteristics in the ads and running competing ads will increase understanding of buying decisions and the targeted demographic. Focus on specific characteristics, build the ad text to support those characteristics and test the response.
Iteration; ad testing is not a one-time effort. Just as branding takes wide coverage, so does a PPC campaign. It will take multiple runs, and various iterations of ad testing to comprehend the keywords that will ultimately increase revenue.
Know the Objective
Often driving traffic is seen as the objective of PPC campaigns, but visitors to the site do not automatically generate additional revenue. The PPC campaign must be designed with the idea of converting clicks to revenue in mind. More than increasing traffic, increasing revenue is the critical goal. An overall strategy and preparation will aid in this process. Keep in mind the destination as the keywords, the landing page and the ad text are designed.
Support the Process
Blogs, articles and forums are great ways to support the PPC campaign. As part of an integrated strategy, posting to industry-related blogs, adding content-rich articles and adding to related forums and wikis will increase visibility, improve niche expertise perception and improve understanding of the buying cycle.
Keyword Tools are offered by many PPC engines to analyze the keywords on the site, the top keywords by demographic group and by geographic location.
Topping market share and one of the pioneers of the PPC process, Google AdWords offers a quick and supportive environment in which to launch a PPC campaign. While initial costs of $5 and bids starting at $0.01 make it sound very inexpensive, an effective PPC campaign can be costly.
This site offers tutorials, FAQ and technical support and is a great place to start the process. The Keyword Tool on the AdWords site is a strong analytic tool for the PPC campaign designer.
Yahoo! Search Marketing
Coming in behind Google, Yahoo offers a professional and well-maintained site. It is credited with the first pay-per-click search engine (Goto.com) which was rebranded as Overture and then in 2005 as Yahoo! Search Marketing.
Yahoo’s main product, Sponsored Search, reaches over 80 percent of active Internet users by providing sponsored listings in search results on the Web’s top portals and search engines.
MIVA is a network of partner sites which power over two billion queries per month. MIVA’s proprietary bid-for-position technology allows the client to select the amount they are willing to spend per keyword.
A full set of management tools and designer support articles makes MIVA a strong PPC resource. MIVA’s network includes CNet.com, InfoSpace and WorldNews.
A combination of article marketing and PPC campaigns can turn any web site’s sales visions into reality. Always remember, the ad needs to be supported by the content in the blogs or articles. If the ad is to appear at the top or bottom of a web page, support it with some text, at the very least an ALT tag.
Before starting an AdWords campaign, please consult the information provided on Google, and ask an SEO expert for advice. People lose lots of money on these campaigns by not choosing their strategies carefully.
This should not put the fear of God into you. Be methodical; write the list of needed keywords to support the ad. Ensure that tools like Wordtracker and WebCEO are used in any PPC marketing plan.
If you build the PPC campaign effectively, it can simply be a case of earning while you sleep.