What’s the number one reason for PPC’s strong growth as an advertising channel? High ROI.
PPC is one of the most profitable advertising and marketing channels. This view is shared by most online marketers, who in 2007, according to Marketing Sherpa, ranked PPC and email marketing as the two channels with the highest ROI.
1. Pay Per Click Yields a High Return on Investment
If you had to choose one, PPC or email, which would it be? Email marketing works best with house (not purchased) lists. Those take time to build, and one major way to build them is via PPC. Unless you have a strong house list and don’t want new customers, PPC is better.
We just went through the year-end agency/client review process of what did and didn’t work in 2008. We assessed the ROI of each marketing channel and helped them plan their 2009 budgets accordingly.
One of our biggest clients is planning a six to seven-figure AdWords spend in 2009. This is because their ROI from AdWords was, on average, five times stronger than other online advertising and marketing channels. In 2008 we helped this company increase its revenues by 36% in a vertical hurt by our recessionary economy.
2. Pay Per Click Gives You Instant Targeted Traffic
We frequently recommend PPC for new websites. SEO has long-term benefits and is a great investment in your site’s future value, but the big bottom-line results take months or years. PPC gets immediate traffic and can help generate significant sales within weeks. We recommend both strategies in parallel because of their complimentary pros and cons.
3. Pay Per Click Helps You Find Problems With Your Offering, Promos, or Website
As soon as you have traffic, you can see what your site does and doesn’t do well. At what rate is it converting sales or leads? If highly targeted traffic converts poorly, you need conversion optimization or a usability reassessment. Sometimes an uncaught programming error or design oversight obstructs critical site functionality. Noticeable lack of conversions or low conversion rate spurs PPC managers to investigate what’s wrong.
The disadvantage of starting a site with SEO but without PPC is that traffic can take months to ramp up to significant levels. If you have a usability or conversion problem in those first three to six months, you may not have enough data to detect it or to fix it quickly with conversion optimization.
4. Pay Per Click Brands Your Company While Selling Its Offerings
Some of our clients occasionally ask about branding with PPC. I won’t belittle branding because it really is an important strategy and discipline.
Sometimes what clients mean by branding is simply increasing their exposure to new prospects. Whenever I hear “We also want to do some branding,” I ask “What do you mean by branding? What are your ultimate goals? Leads? Sales? Email list building?” After three to six months of PPC, if the client doesn’t have the leads or sales that bring in the revenue, branding won’t seem like such a good idea anymore. If you went along just to make them happy or avoid the work of educating them, you won’t look so smart or effective at this point and you may lose the client.
PPC works best with a conversion goal, even if it’s an email signup. Even depth-of-visit or time-on-site are better metrics than just clicks.
The good news is, for all keywords besides your brand name, PPC already exposes your brand’s name and message out to new prospects. PPC “brands” your offerings to the most qualified prospects, not just to everyone. It’s not pure branding, but it is a kind of branding for companies who don’t have Godzilla-sized marketing budgets.
Branding isn’t as easy to measure as direct sales, but we can measure it with the usual PPC metrics:
- More impressions equal more exposure.
- Higher click-through rate can mean both good prospect targeting and that the ad holds interest for your prospects.
- Good conversion rate is more about direct selling success, but could also mean you’ve introduced and sold a new prospect on your brand in one fell swoop.
Again, I’m not at all devaluing the importance of having a brand, knowing your brand, and communicating it consistently. Regardless, most clients need to see tangible results, and you’d better demonstrate them if you want to keep their PPC business.
PPC Is Almost Always A Good Promotional Channel
It’s true that not every offering, website, and target audience is ideal for pay per click. See “8 Ways Clients Can Help Their PPC Agency Succeed” for some of the scenarios that make it less ideal. You can’t always sell directly online but, generating leads or emails for email marketing with PPC is a powerful component of any successful online marketing effort. And you can measure the value of those leads and email lists, you can measure customer lifetime value from those leads and thus you can track their ROI.