When I speak to business owners about local online advertising I often find that they are overwhelmed and confused by the alphabet soup of – PPC, CPC, SEO, SERPs, Twitter, Facebook, social marketing, search marketing, organic search and paid advertising.
In this article I’ll attempt to clear up this confusion and set you on a course of action that makes sense and works.
Keeping It Simple
In the end, you can cut through the majority of the alphabet soup by breaking your options into two major categories: “Paid” and “Unpaid”. In this article we will be focusing on the advantages and disadvantages of the “paid” half of the equation.
Paid Local Online Advertising
While there are literally dozens of different ways to spend money on paid local online advertising the single most relevant, effective and easy to implement is Pay per Click advertising.
Pay per Click (PPC)
Originally pioneered by Yahoo through their Overture program many years ago, today pay per click advertising (PPC) is almost universally synonymous with Google AdWords the way Kleenex is synonymous with tissues. So since all the systems work about the same, we’ll take a look at the “Big Dog” which is AdWords.
How It Works – Search-Based PPC
Any time you search for something in Google you will notice up to three paid advertisements at the top of the SERP (Search Engine Results Page) and up to 10 advertisements along the right side of the page. These are AdWords advertisements and as the name pay-per-click suggests you get charged a fee every time anyone clicks on your ad – whether they take any further action or not.
While like all things Google the exact formula that determines which ads are shown in what order is a closely guarded secret our testing and research has shown the following variables to be extremely important:
- relevance of the keyword the advertiser is bidding on to the search term
- the click-through-rate (CTR) of the advertisement
- the quality of the page linked to the advertisement
- how much the advertiser is willing to pay per click.
Pros and Cons Of Search-based PPC
A big plus for pay per click is that in a matter of hours you can create a Google AdWords account, create an advertisement and if you’re willing to spend enough money, be on the front page of Google search. A second big plus is that if you know what you are doing you can create highly targeted advertisements that will only show to the exact demographic you are interested in targeting.
The drawbacks to PPC are considerable. First, PPC rates have skyrocketed over the last five years. For example, just a few years back you were able to buy advertisements for the keyword phrase “Sales Training Chicago” for little over $1.00 per click. Today, each of those clicks will cost you over $5.00!
Second, developing and managing a cost effective and productive campaign requires an enormous amount of skill and experience in multiple disciplines from writing ad copy to developing high converting webpages that meet Google’s mysterious and ever-changing “quality” score standards.
Finally, multiple eye tracking studies have shown that most web users (your potential new customers) completely ignore both the top paid listings as well as those along the right side of the page. So while the good news is you only pay for those people who click on your advertisement the bad news is that most of your new potential customers will never see the ad you labored over to create!