Pay-Per-Click Advertising - Risky? ~ Search Marketing

Sunday, September 9, 2007

Pay-Per-Click Advertising - Risky?

I've gotten a message just the other day asking me "What is PPC?"...

Looks like I'm attracting all kinds of curious visitors to this blog by visiting blogs all over. Perhaps most came checking out my picture on mybloglog; I admit I do the same especially for those interesting ones ;)

Well, that's one way to generate visitor traffic isn't it? Again, that's what internet marketers like to classify under Web 2.0 or "community traffic". My only vibe about it is how "targeted" can these traffic be?

Obviously, I've should be hanging around blogs that talk about making money online since there's where my target reader gathers. Otherwise I'll be getting questions like the above. LOL

So here's a post to answer that question and something related.

First of all, in the online marketing world there is something call the "Search Marketing". It refers to the act of advertising to those people who do a "search" online via search engines such as Google, Yahoo, MSN, etc.

PPC (Pay-Per-Click) is one form of search marketing, further classified under "paid search marketing". With PPC, an advertiser will bid to have an advertisement listed in the search results, commonly known as "sponsored result". The advertiser pay for every click that a searcher do on that sponsored result, thus pay-per-click.

The good thing about PPC advertising is that the advertiser only get billed for that click if it's performed, and the goal then is to craft the advertisement (usually a few lines of text) to convey a message that will ONLY attract the right prospect - they don't want just any clicks.

Each click can cost anywhere between 1 cent to tens of dollars! It's a bidding (auction) system therefore depending on the advertiser's intention, they control how much they are willing to spend per click and set a budget for the day. Some big corporations uses PPC for branding purpose and simply send these traffic to their home page, but most of the time we find ourselves landing on some sales page of the advertiser.

So, is PPC risky?

I often see new online marketers shying away from PPC after trying it a while and having spent more than they profit from it. Then these "newbie" will jump on the "free traffic" bandwagon (like community traffic and doing SEO) thinking it can't be wrong since it's free...

Well, think of PPC as placing ads on the newspaper; if you're in business have you bought those $5 per line of classified ad space in the classified section of a newspaper? Imagine now you can track and measure the value of every reader who react to your ad (e.g. make a phone call to you).

If you discover that by spending $25 for those 5 lines of ad, you get X amount of phone calls, and Y% will buy from you over the phone thus giving you $Z in profit, will you keep running that ad on the same newspaper over and over again, perhaps testing with different ads to see if it "converts" better?

In fact, online PPC search marketing is so much more predictable than off-line advertisement campagins.

With the ability to track every single click and measure the conversion (into sales, for example) rate of your spent in PPC, the only possibility is to end up either dropping the campaign or tuning it for more profit.

We can get almost instant traffic via PPC adverstising, and more importantly, these traffic are targeted. This means that if I bid on keyword terms like "online marketing tips" or "internet marketing guides" or even "paid search consultant" ;) in the PPC search engines, I can present these visitors the relevant content page on my website since I can roughly tell what they are "searching" for.

Relating this to my first paragraph of this post; I then don't have to be concern about catering my website content to visitors of all shape and sizes, explaining "What is PPC" ;)

Here's another twist: If you're selling something online, bidding on the right keywords bring you so much further into the sales cycle. The trick is to identify those "buying keywords" so you won't waste money bidding on just any keywords that bring non-converting traffic. (and conclude that PPC is not for newbie)

With community traffic such as what I'm getting here with this blog, most visitors are not in the mood of buying anything so there'll be more "work" for me to do trying to get your credit card out. You're just on a different end of the sales cycle, if any. I've to gain your trust, build relationship, yada yada... Not bad at all, just that it's... different. (As such, most bloggers try to monetize their blogs with Adsense and get paid getting clicks from these type of visitors - Adsense is a whole new topic I may blog about later)

What about SEO traffic? Yes, these can be targeted and great (because it's free) IF you can get good ranking in the first few search result pages for the "buying keywords" you would otherwise bid for. The caveat is the big IF. Anyone every ask whether SEO is risky for the newbie?

Do the obvious, but do it differently.

(hehe... this last phrase has nothing to do with this post, I saw it on the cover of a magazine call "Expat" in my local shopping center just now)

Later, Hans.

Add your comment!

emanrais said...

Dear Hans, the blog of PPC is fine. I'll dig more later on. Thanks for a compliment about my grand daughter Gaby, yes she's cute indeed. Have a nice day.

My Surfing Notes said...

No efforts without RISK.
As human being we can counting the risk.

KoliRana said...

I loved this blog. Interested to work closely with this blogger.

seoexpert said...

I would love to write and say what a great job you did on this
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