PPC is an advertising model used on search engines, portals, advertising networks, web sites, and blogs where the advertiser will pay the content delivery network for visitors. In the event that the ad is placed on a third party web site, the content delivery network will share the advertiser’s fees with the web site owner. You will often see these arrangements identified with captions that say “Sponsored Links” or “Sponsored Ads.”
There are two major flavors of PPC strategies used to determine the appropriate ads to display to the user. These are Keyword Match and Content Match. Keyword Match systems rely on a user’s search query. Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter all use this strategy. Content Match analyzes the context of the page being viewed by the user to determine relevant ad placement. For example, viewing an article on juniper bonsai trees may trigger ads selling bonsai tools, books, and soil mixes. These ads are usually delivered by the Google AdSense and Yahoo! Publisher networks. Both systems rely on the theory that a visitor’s desire for information is positively correlated to their desire to purchase specific products and/or services.
One major benefit of Pay per Click advertising is the ability to measure results to make more intelligent decisions based on quantitative data. Unlike traditional advertising like newspapers, billboards, and TV commercials, PPC systems can tell you how exactly many times your ad was displayed and how many people took the next step and visited your web site for more information. When properly set up, PPC systems can tell you how many PPC visitors bought a product from your site or filled out a contact request form. They can even tell you how much each PPC visitor is worth to your organization.
The key to making intelligent decisions that improve your marketing results is to know your average cost per lead for specific marketing campaigns and for your entire marketing program. So long as Pay per Click can develop a lower cost per lead and per sale than other activities, you can feel comfortable shifting your limited resources into this advertising method to increase your return on investment. To find the answer to this question, divide the cost of your marketing activity, like Yellow Pages ads, by the number of new leads or sales that were generated by the activity. Do this for your big marketing expenses, and then the entire marketing budget, to see where the numbers lie.
The other major benefit of PPC advertising is the relatively low cost. When targeting local Internet users, it’s not uncommon for businesses to receive a month’s worth of exposure for under $200 per month. That’s the equivalent of 4 cable TV commercials or a few square inches in the newspaper – exposure that lasts a day at the most. Competitive, high dollar sales that come from things like automobiles, homes, or mortgages will require larger budgets because their cost per click is several dollars each. But so long as you are below your average cost per lead and the sales per PPC visitor exceed the price paid per click, you are enjoying the benefits of a more effective marketing campaign.
The key to a successful PPC campaign is continued improvement over time. If you can’t commit the time necessary to learn PPC best practices, enlist the help of an experienced consultant. They can help you write compelling ads, choose highly targeted keywords, build a site sales funnel and influence visitor behavior in your favor, and ensure that the long term advertising trend is positive. Be leery of any party which “hides” the payments due to the ad delivery network into the cost of their services. This arrangement encourages the consultant to maximize the spread between your payment to them and the delivery network in order to earn greater profits.
Poor practices like untargeted, overly broad keywords, lack of visitor performance analysis and cost analysis, and bad web design will all have a negative impact on your campaign. And since we’re talking about small percentages progressing through each stage of the sales funnel, little deficiencies will have a sizeable impact on the profitability of your PPC campaign. But with the right strategy in place, you may find that you receive a lot of quality leads and sales from your web site after all.