Rough Guide to: Pay-Per-Click Advertising
Pay-per-click (PPC) advertising on the Web has been one of the major growth sectors in marketing. Last year, Internet search engine Google overtook ITV for monies received from advertising and nearly $2 billion was spent on PPC globally. New Media Knowledge spoke to a PPC consultant to gauge what companies looking at the technology should consider.
What is Pay-per-click, in a nutshell?
Google AdWords, as well as Yahoo!Search and MSN Adcenter, are all forms of pay-per-click advertising. PPC is essentially a real-time auction where you bid on words and phrases to ensure that your website appears in the sponsored results displayed on the main search engines. It’s based on keyword advertising. Keywords can be single words or whole phrases. If your ad is triggered by a search query that contains your keyword and the user clicks on your ad, you pay for that click.
Why market with Pay-Per-Click? Isn't it expensive?
You and your competitors could be bidding on the same keywords, but if you are prepared to pay more, your ad will appear higher in the listings. The interesting thing is that neither Google, Yahoo! or Ad Centre set the max bid price – it is the advertisers that set that price.
All forms of marketing are expensive, but in relation to other forms of marketing - print, direct mail, outdoor - PPC is relatively cheap. Using a keyword research tool you can find the most relevant keywords to use and get quite a high return on investment (ROI). We can track ROI down to the individual keywords within a PPC campaign.
However, pay-per-click should be part of an overall online marketing strategy, external links, online PR, on-page search engine optimisation (SEO) and off-page SEO, as well as email marketing.
[Above: Ian Howie, PPC expert]
What are the advantages of PPC over organic SEO?
PPC is flexible and fast. If you had an offer that only ran this weekend you could have your PPC campaigns running, for example, from Friday night to Sunday night. With SEO, it is very different, since you are dependent on so many other factors that you don’t control. With PPC you control the keyword, the maximum bid, the ad copy and the landing page. And even at what time of day and which country, city or region it is being shown in.
What are the core principles of PPC marketing?
There are three key marketing principles of PPC
1. Relevancy – in PPC this is called the Click Through Ratio (CTR). This is the ratio of the number of clicks to the number of impression each keyword in your campaign has received. Higher CTR is rewarded with a discount being applied to the bid price. Most traditional advertising only has a resource rate of one per cent. With PPC, CTR rates of above five per cent are not uncommon
2. Keyword Match Types – these allow you to fine tune your search queries to your ads. The most powerful match types use negative keywords to stop your budget being spent on non-relevant keywords
3. Return On Investment – with PPC it is quite easy to measure how much your keywords are costing you. The 20/80 rules normally applies - to make a campaign deliver positive ROI you need to focus your bids and budget on the 20 per cent of keywords that will deliver 80 per cent of your profits
What's your advice when picking keywords?
To match your offering as closely as you can to the keywords being searched, use keyword research tool Wordtracker.com, which is the only tool to supply long tail keywords. The keyword query should be mirrored in the ad copy and be relevant to the landing page. For instance, if you are selling diamond earrings you want the long tail – e.g. ‘silver diamond earrings’, ‘gold diamond earrings’, ‘buy diamond earrings’ – rather than just ‘diamond earrings’. Such a term is too broad and will bring you traffic that may not be interested in buying, just browsing.
What are 'negative keywords' and what's their impact?
Negative keywords stop your adverts from appearing when a search query includes a term that is not relevant to your ad.
In the case of ‘silver diamond earrings’, I may not want people coming in for ‘cheap silver diamond earrings’. So in this case the negative keyword would be ‘cheap’. Any query with ‘cheap’ in it will not appear.
What is the role of analytic tools?
Analytics tools, such as Google Analytics or Yahoo’s Index Tool, give information on the behaviour of visitors within a web site. They allow you to set goals and see how people entered and exited your web site.
With any online marketing - PPC, SEO or even email marketing - you should regularly check your analytics reports.
What are the key five/ten things companies should consider before engaging PPC?
1. Ask yourself what your goal is. To get more email addresses, to increase your brand awareness or for sales?
2. Research – what are your competitors doing with PPC?
3. What is your unique selling point? Can you offer something different? Can you offer something of real value?
4. Do you have a budget for pay-per-click?
5. PPC is a marketing tool, so the person in charge should have some knowledge of marketing and an understanding of how to put together html pages would be useful.
Ian will be running a Wordtracker Profitable PPC Campaigns workshop on 13 November 2008 in London.