Is 'pay per click' advertising right for your online business?

Article written by Valerie McCord and published in StrictlyBusiness, Central Vermont's business monthly, Volume 3, Issue 11, April 2008.

Pay per click advertising is the online advertising choice of many successful eCommerce and online businesses. If done well, pay per click advertising drives your target market directly to your site with a very good return on investment. Some believe that it is one of the most cost-effective ways to advertise online.

In the search marketing space, pay per click advertising and natural search engine optimization are the two major approaches for driving target markets to web sites. Successful online businesses tend to use both, diversifying their search marketing strategy.

In the pay per click advertising model, the advertisers (the web site owners or their pay per click managers) create targeted ads associated with keywords that will be triggered by the search engine when searchers submit a query for those keywords. Advertisers specify the maximum cost or bid they are willing to pay per click which, along with other criteria, determines the ad's position on the search results page. The most well known pay per click services are Google AdWords, Yahoo Search Marketing and Microsoft adCenter.

Pay per click ads can be positioned anywhere on a search results page. You commonly see ads at the top of the results, above the natural listings, and running down the right side of the page. Google, for instance, identifies them as Sponsored Listings to separate them from natural results.

The search engine charges the site owner when the searcher clicks on the link to the site in the ad. The cost will be up to the maximum cost per click set by the pay per click manager. Click costs run from $0.01 to $50 or more depending on the competitiveness of the market and the keyword being bid on.

Some may ask why they should pay for clicks when there is no cost per click for visitors to enter their web sites from natural search engine results. For those of you whose web site is on the first page for every major keyword relevant to your business, you may find that having your brand seen more through pay per click ads is valuable enough to warrant the ad-spend. But most web sites don't have top rankings for all their primary keywords, particularly large eCommerce sites selling thousands of products. Pay per click advertising can fill in the gaps where natural search optimization is not performing as desired.

Another great benefit of pay per click advertising is you can get immediate traffic. Getting high rankings in natural results can require moderate to very aggressive search optimization measures, which can take months to achieve and have a variety of costs, including directory fees which can run over $1000.

If done properly, the return on investment for search engine optimization can outweigh the return for pay per click advertising because, over the long term, the initial upfront investment pays for itself.

However, achieving top natural rankings is not always possible or cost-effective given the competition, how a site was built, what the budget is or given the business' time frame. If you want to start driving traffic to your site, you can do so at any time with pay per click advertising.

As a pay per click advertiser, you are in control of your advertising and the budget. As an example, with an investment of just $5.00 you can create a Google AdWords account and start creating targeted ads to any page within your site. You set a daily budget which you can modify at any time. All changes are real time and are reflected in Google within minutes of being saved. You can create and edit ads and change the pages they are linked to; keywords may be added, removed and paused; maximum costs per click may be changed. All major pay per click services have similar features and tools to help you maximize your advertising campaigns.

Monitoring pay per click advertising results is a great way to learn about your customers and mine for keywords to naturally optimize your site. The benefit to your search optimization efforts is that you can determine which keywords and ads cause sales/conversions which can provide a good keyword list for natural optimization. Recognizing the slight nuances between keyword search intentions can also make all the difference between a successful ad campaign and an unsuccessful one.

Geographical targeting is one of the most powerful features of pay per click advertising services. Geo-targeting, as it is known, allows click managers to target their ads to specific geographical areas. They can be as broad as countries (i.e. US, Canada, France), at the state/city/province level (i.e. Vermont, Burlington, Quebec) or an area within geographic coordinates. When ads are geo-targeted they are only served to internet visitors in those areas. Search engines use computer IP addresses to determine visitors' locations. This tight targeting of ads ensures that only those in your target market area will be seeing and responding to your ads.

The features and flexibility of pay per click advertising services provides those who create and manage proper campaigns a very respectable return on investment. If done poorly however, pay per click advertising can eat your advertising budget very quickly and produce poor returns. Real success comes to those who understand the keyword selection process and who monitor and optimize their campaigns regularly.

Keywords need to be tested, monitored, removed and added, as do ads. Cost per click values need to be managed to reflect ideal ad positions and then monitored. While you are working on your campaigns, the competition isn't sitting idle. Watch those ad positions; you may find yourself making frequent max cost per click changes to compete in a competitive marketplace.