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Friday, March 14th, 2008

What is PPC?

 

PPC (Pay-per-click advertising) has been around for a while now and many site owners have either experimented with, or have at least heard of the marketing platform but surprisingly, there are still a large number of potential advertisers who have had no exposure to the world of PPC.

After fielding questions from new clients as well as our newest sales representative, I have decided to write an article to explain a few of the basics of what PPC is, some pro’s and cons and provide some insight into how it works.

PPC advertising is a means to let businesses advertise their products or services online, within search results or on other websites participating in an advertising network. The advertiser pays only when a potential customer clicks their ad and follows it to their site. The advertiser competes on ad display and positioning by bidding on relevant search terms.

Pro’s

  • Matches consumer specified search terms for something they are already interested in researching/purchasing, with the advertiser providing what they are looking for.
  • A well managed campaign allows consumer behavior to be monitored to assist in adjusting the effectiveness of the campaign while it’s running.
  • In some cases, particularly ecommerce sites, ROI can be tracked very accurately.
  • Advertiser pays only when potential customers interact with their ad.

Cons

  • Ad copy is very limited in size which makes it difficult to “shoehorn” in a lot of information to attract customers.
  • Cost per click is dynamic not fixed; rates can depend on a number of different factors. Potential overspend is offset easily by setting a budgetary cap.
  • PPC can be susceptible to abuse, such as click fraud. However, there are methods employed by search engines to detect much of this. Additionally, aftermarket analytics solutions such as ClickTracks, can also be of significant help in narrowing down possible click fraud and generate a report for advertisers to send to the appropriate search engine.
  • PPC differs from more traditional forms of advertising in that it displays ads to those who are actively looking, rather than merely “display and pray” to a demographic. Also, the ability to gather information and adjust an advertising campaign at any given time makes it a more flexible alternative to broadcast or printed media.

How PPC Works

At its simplest level, PPC works as an auction style “bid for position” system. This system has evolved over the years to take keywords, ad copy and even destination page content into consideration when determining the order of the paid listings.

It is pretty easy to get an ad live in front of searchers with 4 easy steps. 1. Choose your destination page 2. Pick your keywords 3. Write your ads 4. Set your bids. While this will allow you to get your ads live, in order to be successful (unless you are incredibly lucky) more research is required here, but these are the basics.

While there are many important aspects to setting up and maintaining a successful PPC campaign, three very important things to focus on are keywords, ad copy and bidding strategy. Here are a few of the major points to remember on each of these categories.

Keywords

  • As a rule, using keywords most relevant to the content on your site’s landing page(s) will net the most qualified traffic and result in better positioning within a search engine for reduced cost.
  • Keywords that are very general will usually result in greatly increased cost by displaying ads to searchers that are unlikely to follow through to purchase.
  • One technique often overlooked is the use of negative keywords to filter out unwanted traffic. For example, using the word “free” as a negative keyword would block out any searches that include the word “free”. If you are not offering free products or services you would definitely not want ads displayed to searchers using that term. This can also be a very effective optimization technique to enable the use of keywords that are too general otherwise.
  • Using “long tail” keywords. Keywords that are highly relevant but not often searched for can be a very inexpensive means of boosting niche traffic.

Ad Copy

  • Ads should first and foremost be designed to get the searchers attention through relevance and a little creative writing.
  • Testing different ads against each other is the best way to optimize the effectiveness of an ad group.
  • Whenever possible, employing keywords in the ad text is best practice. It can be difficult to do this while keeping the ads appealing to searchers, but it will increase the quality of the ad to the search provider and will generally result in better positioning at reduced costs.
  • The ad destination must be a working link to a landing page relevant to the user’s search. Consequences of not following this guideline range from greatly increased cost per click to having ad service declined outright by the search engines.

Bidding Strategy

  • Rather than arbitrarily setting out bids based on estimations, best practice is to start low and spend a bit of time daily adjusting upwards until reaching optimal bids.
  • In some cases, particularly when bidding on very competitive keywords, it’s not always the best approach to vie for the number 1 position. Avoid getting locked into a bidding war over the top positions.

PPC is a very direct method of advertising which, when implemented properly, can generate a stream of targeted traffic to your website almost immediately. While PPC may not be cost effective for all target phrases in all industries, proper keyword selection and campaign management can help attract qualified visitors and generate conversions at a reasonable price.


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