Pay-Per-Click Strategies for Search Engine Marketers
Over the next few weeks, I’ll feature a multi-part interview looking at the pay-per-click world. Why should you undertake PPC? What tactics should you use? How do you get the most out of your PPC campaigns?
I’m talking to three very experienced pay-per-click operatives –Ammon Johns , Andrew Goodman from Page Zero Media and Jim Banks from Web Diversity who have all kindly agreed to share their knowledge. This interview is so large I will spread it over the next few weeks, so it’s easier to digest.
It’s damn good, though. A PPC master-class. And it’s free. Enjoy…
Round one, gentlemen. The traditional SEO model relies on free traffic after having gained appropriate placement in search results. Why should an SEO undertake PPC? What are some of the advantages PPC offers?
AJ: More and more companies are learning the value of search engine marketing. Search engine placement is probably the most effective means of driving highly pre-qualified prospective customers to any web site. The most controllable form of search engine placement is the pay-per-click model.
Pay-per-click search listings allow companies to bid for placement within the search results users select. Those willing to pay more can appear higher in the search results.
Companies bid for the specific search terms that their listings will appear as search results for. When a user searches for, or is using, a search term you have bid for, your listing will be displayed as one of the search results.
Unlike other forms of search engine marketing, PPC is agreeable to all parties. While SEO through tweaking HTML and exploiting loopholes in algorithms is seen by search engines as destructive and damaging, PPC is seen as supportive and healthy.
Basically, PPC is the one way you can get whatever relevant placement you wish on search engines without being an enemy to the engine in question. It does cost more in many cases, but the predictability and stability means that the ROI is also more stable.
PPC is incredibly effective, reliable and cost-efficient compared to other advertising.
Let’s put it into context. Say a banner campaign on MSN will cost you $40 per thousand impressions. An average banner may have a 0.5 percent click-through rate, so for every $40 spent, you’ll get 5 visitors at your site. If your own site has a conversion rate of 3 percent (which would put you very firmly in the top ten percent of ecommerce sites in the world) you’ll need 33 visitors to get a sale, so you’ll be spending around $280 to attract each sale. I hope your profit margins allow for that.
Using Overture, I can place my listings on the MSN search results. I can make these listings appear only to people who are already actively looking for something like my product. I can present a Title and a description that let me give a lot more information, specific to their search query, than banners allow. As a result, the click-throughs I’ll get are more qualified, and I can fully expect to see my conversion rate rise from 3 percent to 4 or 5 percent.
With the PPC listings I pay nothing for impressions. A thousand people (all pre-qualified by their own search terms) can view my listing and get the branding message and I pay nothing for it unless they click through.
Going back to the higher level of pre-qualification, I find that my conversion rates have risen to 4 percent and so I need, on average, just 25 visitors to get each sale. The search term I want is quite competitive, so even though the minimum bid is just $0.10 on Overture, I have to beat rival bids, and I end up paying $1.00 to gain the #1 place in the results.
Unlike the CPM model of advertising I pay purely for the click-throughs, so my 25 visitors to get a sale cost me just $25.
In actual fact I could probably have gotten my search terms far far cheaper than $1 per click simply by using more specific search terms. Not only does this mean less competition, but as an added benefit, more specific search terms tend to have an even higher conversion rate.
Many companies use PPC very successfully to acquire new customers for under $2 per customer acquisition. That’s tremendous value, and that’s why PPC is so worthwhile.
AG: I’d rather ask the question “why should [merchant x] do PPC?” to see it through their eyes as entrepreneurs with a multitude of pressures, priorities and marketing opportunities.
If the question were “why should an SEO do PPC,” my answer would of course be “they shouldn’t – they should leave it to me and I’ll send them my SEO business.”
So let’s take a look at it from the perspective of merchant X – for example a niche catalog retailer who recently contacted me.
Merchant X probably does a million in sales per year right now, and would, within 18-24 months, like this to become $6-8 million. This type of growth is possible if a lot of demand is created, but the question becomes where to start. Some selective use of broadcast, print, and outdoor media might be warranted, but not to the point of incurring further bank debt, since there is already debt associated with carrying inventory.
One obvious method might be direct mail. There are companies that deal in this sort of thing, and some of it is sort of opt-in. But it is a tad spammy, and the web seems to offer something more promising: high-tech targeting that you do yourself rather than relying on some third party’s claims that they’re selling you a bunch of really targeted addresses.
Ideally, then, a low-risk medium would be found where you can test and target your niche market at a low cost, and track your results.
Pay-per-click search engine advertising is highly targeted and the results are highly quantifiable, particularly when you use sales conversion tracking. The process involves nearly zero risk. No $50,000 media buys. Not even $2,000 media buys. You pay one day at a time.
It’s not going to generate negative publicity or “turn off” your market, because, as Danny Sullivan has argued, search engine ads are like a “reverse broadcast network.” The consumer or information seeker types a query, so by definition they are looking for something related to that query. In this world of attention deficit and zero tolerance for intrusive advertising, search engine ads are one of the few ways to find people without pissing them off.
If they get to your site and you’re too pushy there, depending on your usual sales process it might be a good idea to give them info first, and sell to them second. Just because they found you on a search engine doesn’t mean your work of creating a business relationship is done. What happens on your site is vital to that relationship.
For a niche marketer looking to grow quickly and organically, this type of advertising is a godsend. For a larger company looking to launch a new product or test a new market, it’s an ideal way to experiment.
So if PPC is good, isn’t SEO better? All I have to say to that is, look at the demand. There is a lot of demand for PPC, and no, it isn’t out of laziness. Some SEO’s act as if paying for targeted traffic is like paying for sex: that you do it because you’re somehow not attractive or clever enough to get a “real partner.” That makes me laugh. Anyway, from the standpoint of the majority of my clients, at least when it comes to traffic: “whatever gets you through the night.” (Have you noticed how popular those online dating services have become, by the way?)
Successful business people do not feel sheepish paying for traffic. In fact, they’d rather pay for it, much the same as they’d rather not clean their own toilet. We should all aspire to this level of greatness. [cue inspiring music]
The ROI of PPC is quantifiable and the advertiser CAN DEMAND something tangible for their dollar. Needless to say, advertisers cannot call Google up and demand ANY sort of special treatment for their pages in the organic Google search results.
And that’s what this is, you know. It’s advertising. Anything to do with search engine marketing is really advertising, whether you pay for it or not.
Since SEO is advertising, but search engines themselves do not consider search results to be advertising, there is actually an inherent conflict there; a conflict which has led to a long-standing Spy-vs.Spy-like adversarial relationship between SEO and search engine technologists.
Advertisers are better off, IMHO, being in a position where their interests are aligned with the media with whom they’re placing their message.
Being found in organic search results is a great bonus. But if you want to start generating leads and sales tomorrow, and have the budget to pay for ads which appear near popular key-phrase searches, you don’t wait. You do PPC.
And, of course, you don’t rule out other forms of publicity – especially the legitimizing stuff like organic search results, word of mouth, press coverage, etc.
And that all comes back to the most fundamental point. What about your business is remarkable? What about it is *worthy* of word of mouth, press coverage, etc.? Knowing what that something is can actually provide a business with an excellent strategy for addressing consumers more directly through PPC. Consumers are getting good at comparing ads on a page. They can tell immediately what companies stand out.
JB: Well, PPC is useful for a number of reasons. First it can be used as a testing ground for SEO, you can experiment with different keywords/titles/descriptions and when you hit on a winning formula then look to integrate that combo for SEO purposes.
The benefit of this testing, is that because you are paying for the traffic there is no danger of a PR0 penalty if Google don’t like your technique.
It’s great for filling gaps. Sometimes, it is not going to be good use of your time to have to work to get to the top of a search engine listing, so buying your way to the top can sometimes be useful.
Time sensitivity is another biggie. Many advertisers are running time sensitive events, or promotions and SEO isn’t as effective in delivering the 4 P’s that any good marketer will tell you about, product, price, place, promotion. PPC is much better at delivering it. Some examples of this might be Christmas, Valentines Day, sporting events, January sales. SEO is not exact for delivering to get the best impact.
Whether you listen to some sages or not, many people chose the Sponsored ads or the Google style ads because they know that the people advertising have paid good money to be their, and it should be both relevant and current. From my own experience of shopping online, I almost always will chose a sponsored ad over a SERP’s these days as I find they have a better relevancy more often than not.