Business owners are reluctant to engage in online marketing activities not because they don’t want to see their website online, or they don’t have the budget for it. Mostly, it’s because they struggle to track Internet marketing’s return on investment or ROI. Indeed it is difficult to invest in something whose value is not obviously apparent. Good thing there’s PPC or pay-per-click advertising.
PPC not only gives businesses quick results, it also tracks these results – allowing owners to see exactly what they are making through this channel. In fact, a recent study showed that 50% of marketers that use PPC do so because they want to achieve or increase their measurable ROI. PPC is indeed the online advertising model businesses need right now.
‘Complex’ Concept Simplified
When business owners hear the word “PPC,” they usually think of it as a highly complex, completely technical, paid online advertising model that they should stay away from. And indeed you have reason to think of it that way. Perhaps you’ve been approached by a consultant before with terms like “spend, bids, impressions, CTR and quality score” didn’t really make sense to you. But really, what you should know about PPC is in the name itself: pay per click. Unlike other forms of advertising, you only pay when users click your advertisements. No click means no payment.
Paid advertisements may appear on various online locations but the simplest and most popular form of PPC is the search results text ad, which is displayed on top of and beside “organic” search results. Each ad is composed of four lines of text. Currently, 95% of PPC marketers consider these text ads as important, according to a digital marketing survey. Paid ads may also appear as banners on partner sites and on video content (such as YouTube). But in this article, we’ll focus on search text ads.
Should You Spend on PPC Ads?
Research by MarketingSherpa showed that online marketers indeed are dedicating a significant amount of their budgets to paid search. A quarter of the marketing budget is spent on PPC! Another 25% is allotted to the business website. SEO gets 21% of the pie. The rest is intended for email and other channels and activities. In the United States alone, search ad spending is expected to hit $22.86 billion in 2013, up from merely $15.36 billion two years ago, estimates by eMarketer showed. By 2014, it’s expected to reach $25.41 billion and by 2016, a massive $61.1 billion!
Here are other statistics that matter:
- Estimated $22.86 billion U.S. paid search spending in 2013 (eMarketer)
- By 2016, PPC is expected to become a $61.1 billion industry worldwide! (Kissmetrics)
- Increase web traffic – 63% (MarketingSherpa)
- Generate more leads – 62% (MarketingSherpa)
- Increase online sales revenue – 57% (MarketingSherpa)
- Achieve or increase measurable ROI – 50% (MarketingSherpa)
What these numbers is trying to say is this: PPC works. Online marketers are spending on PPC, and are looking to spend more on it in the future. This upward trend in spending says a lot about the power of paid search. But as research shows too, the main hindrance preventing B2C businesses from increasing online budgets is the difficulty to prove ROI. But what it you can track ROI, and see results instantly?
Instantly Appear on Google Search Results
One of the top reasons why pay per click advertising is popular among business owners is its power to propel websites to the first page of Google – “instantly.” Instant in this case is in comparison with SEO or search engine optimization, which is a slower but nevertheless necessary online strategy. With SEO, it can take time to rank on search engines, especially for competitive keywords. But with PPC, you can immediately ascend to the much-coveted search results page and advertise your business to interested prospects without waiting for months.
The instant appearance on Google search results brings instant traffic to the website. Research shows that increasing web traffic is top objective of 63% of PPC advertisers. So if you’re just getting started with SEO, or your website needs a traffic boost fast, you may use pay per click to get it.
Take note though that being on Google’s Page 1 is not just about extra traffic; it’s also about spreading brand awareness. Whenever users see your search result, they get an “impression” of your business. You do not pay for impressions. This means you get to give your brand exposure with little or no cost, and do it instantly. It’s also about converting the traffic to leads and sales.
Measurable: from Impression to Conversion
PPC networks such as Google AdWords and Bing Ads allow businesses to track a wide array of metrics, from impressions to clicks to conversions. These metrics enable businesses to see whether they are indeed getting the “conversions” or results they want from paid ads. You get to see how many people saw your advertisement, how many clicked the ad, and how many performed the desired action on your landing page.
Because you can measure impressions to conversions, you’ll be able to see how much a particular conversion cost you. Calculating your “cost per click” will let you determine the amount you spent for every advertisement clicked by a user. “Cost per conversion or action or acquisition” is the amount you spent for that lead, sale, or whatever conversion you are tracking.
Being able to measure not just traffic but also money spent and earned is an attractive feature of PPC. It is one of the reasons why pay-per-click is very popular in the retail industry, which accounts for 16% of businesses that run PPC ads. Case in point: Amazon. The e-commerce giant spent $55.2 million on Google AdWords in 2011. Retailers are tracking not just how many clicks they got but how much they earn from these clicks. Businesses in other industries are following suit.
Don’t be left behind. We can implement pay-per-click advertising for you and help you get instant, highly-targeted traffic and measurable ROI for your website and your business. Call us now or send us a message to schedule your free consultation on PPC advertising.