SEO

When Pay Per Click Is NOT Right For You

One of my main job functions is recommending online marketing strategy for specific client situations. Over the last five years, I’ve looked at a lot of different client situations in a variety of verticals.

Often, we provide a comprehensive proposal and suggest the whole package: PPC, SEO, Call Tracking, Social Media, Email Marketing, and Omniture Analytics.

But some clients have too limited a budget, or have an offering where not all of these strategies make sense.

When do we recommend pay per click advertising, and when do we NOT?

Pay Per Click Is An Outstanding Strategy When…

1. You need traffic immediately.

Other methods like SEO and social media can take months to bring people in. Compared to SEO, which has great long term benefits, PPC provides some instant gratification. If you have a new site and need traffic now, use pay per click advertising. It’s also a good way to get a head start on whether your site converts well. In other words, is the percentage of visitors who do what you want them to do on your site high enough? To wit…

2. You have a crystal clear conversion goal.

If you’re selling something they can buy online, or trying to get a lead generation form filled out, that’s a pretty clear goal. The more goals you have, the vaguer they are, and the less they can be achieved online, the more trouble you’ll have optimizing. You should use call tracking when the lead or sale happens on the phone.

3. You have a product or service people are already looking for online.

If the product or service is well known, there should be searches for it. You need to get hundreds of clicks per month to optimize frequently enough to get great results. To get that many clicks, you need a niche with thousands of monthly online searches.

4. You want the opportunity to warm up prospects.

You could focus on PPC or SEO or both. But for the same keyword searches, PPC ads provide a distinct advantage over natural search listings. You can customize and test which ads do the best job of qualifying and warming up prospects. I find it surprising that some people find this surprising, but a good ad can easily lead to 5-10x the ROI of a bad ad.

Certainly, you can test meta descriptions and their effects on natural search visitors, but you’d have to create the system – especially if you want to split test them during the same time period – whereas one already is set up for you in AdGroups.

Pay Per Click Is Not So Great When…

1. You sell clowns

Studies have shown that not many people buy or sell clowns. And what clown sales there are usually happen in the real life black market, not online. OK, that one was a joke (but more to come on this market).

2. You have very small profit margins.

The average cost per click across all niches is between $1-2. And in some niches, CPC (cost per click) averages $7-10. If, for example, your sales site converts at 2%, you need 50 clicks to get a sale. That’s $50-100 per sale. Can your profit margin cover that?

On the flip side, I once help a business owner sell her custom-made polish pottery online via pay per click. We got her a $6 cost per sale and each dish was priced around $60. But the planets have to line up just right for that kind of thing.

3. You’re trying to sell something so new that no one is searching for it.

If you’ve created a new product or service, chances are there will not be enough searches to justify the effort. Let’s say you start a service of clowns who sing songs for kids with cancer (I thought I’d use a really common business example). I’m guessing that the number of searches for singing clowns is not high. And of those searching for clowns, how many searchers need them for kids with cancer?

You might try to go for a related, more general niche like entertainment, but “entertainment for kids with cancer” may not be something people look for online. Your target would be hospital administrators or nurses. It’s probably better to just call them on the phone.

4. You’re in a super competitive niche with little or not competitive advantage.

If you sell insurance or you’re a mesothelioma attorney, you’re going to be paying out the wazoo for clicks. We’re back to the profit margin issue; if you don’t have a way to get more money out of those conversions, or dramatically increase your conversion rate, or you have huge money to burn to carve out a space in the niche, you won’t last long.

5. Your target market isn’t internet savvy or does most of their business offline.

They won’t be searching for what you’re offering online. Go back to the 80′s and do not pass go, do not collect $200.

A Brief Look At The Strengths of Other Strategies

As you can see, you should prioritize other strategies more highly when:

  • You don’t need most of your traffic right away- you have time to wait for SEO traffic or to create and run a social media campaign
  • Your niche’s competition and CPC is prohibitively high- in this case, SEO can be very expensive as well, so I’d think Social Media first)
  • You’re offering something so new that you first need to raise awareness- I’d use social media for this, not keyword/search-based marketing
  • If you can gain some profits from a house email list, you might be able to funnel that to PPC later

Brian Carter is the Director of PPC, SEO, and Social Media for Fuel Interactive and The Brandon Agency. He co-founded TweetROI which is an AdWords-like Twitter advertising service.

 When Pay Per Click Is NOT Right For You
Brian is author of The Like Economy: How Businesses Make Money With Facebook and Facebook Marketing: Leveraging Facebook's Features For Your Marketing Campaigns, How to Get More Fans on Facebook, and LinkedIn For Business: How Advertisers, Marketers and Salespeople get Leads, Sales and Profits from LinkedIn Brian has 12 years experience as a freelance consultant and digital marketing agency director. His hands-on business experience, cutting edge insights, background in improv and stand up comedy culminate in a keynote speaker, and social media trainer who leaves every audience not only entertained, but armed with powerful strategies and tactics.
 When Pay Per Click Is NOT Right For You

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25 thoughts on “When Pay Per Click Is NOT Right For You

  1. Brian:

    Great article on benefits of PPC, especially as it pertains to traffic generation for new sites. Glad to see you clearly explain why PPC does not work for every business need.

    Shay West
    @shaywest

  2. Brian thank you for your article, it’s very interesting! To monitoring my campaign PPC ADV I use Clickmeter http://www.clickmeter.com . It is tested to monitor over 30.000.000 clicks for every single user and has shortest URLs. Now I said I can peaceful sleep!

  3. Having relevant and unique adtext in your Goolgle adWords campaigns is definately gives you a stronger edge and allows for a higher click through rate.
    We have seen a 44% increase in sales through revising our clients adtext and monitoring competiors.

  4. Thanks for a very realistic way of assessing PPC: as you say it’s not for everyone.

    One bonus if you do use it can be brand building, even if people do not click on the ad. That does require a simple brand concept with a striking logo, but it can be a useful non-charged extra value.

  5. Great article Brian. At AdSymetrix we have made it simple for ecommerce enabled sites to measure where their traffic is coming from, whether it’s paid or organic and if it generates a call or a chat. Once the call is started our software is off to the races as far as call handling features and add-ons. Determining your ROI on PPC advertising was never easier.

  6. Great job on the reasons PPC is not right for a business. I think another big mistake many, many people make is they try to do PPC on their own when they have never setup a campaign and don’t change the default settings not available in the wizards.

    I think the search engines could do better in this respect of helping new comers pick the right advanced settings.

  7. You’ve finally convinced me – the clowns are going on Freecycle this afternoon :)

    Great list for folks to consider before throwing money at AdWords. One slight nuance – the new and improved content network is a great place to advertise solutions that no one has heard of or knows they want yet. Just make sure you set up conversion tracking and run the placement performance report to identify good and bad content sites.

    And now to get rid of Bozo… ;)

  8. re: Pay Per Click Is Not So Great When… 2. You have very small profit margins and 3. You’re trying to sell something so new that no one is searching for it.

    Howie’s right, content targeting can actually be very effective for both of those scenarios. Always bid less. Run placement reports to look for high traffic/spend but non-relevant or non-converting sites. For low budgets, might want to exclude the major gobblers like domain pages, error pages, myspace and gmail (those are just harder to micro-target) because even EOC’s for those placements can be costly.

  9. I recommend PPC much more than SEO for those trying o sell a product or service online….as long as sites like Wikipedia About.com Ask.com & Yahoo Answers are returned in the organic SERP for a commercial search query I always will….SEO is good for some clients but for most it sucks …..

  10. Too short of a video… to validate 1. ppc arbitrage changes roi / image ads have a different roi / and i disagree with new products that the consumer does not know about.. that ppc will not work; Video ads can educate the consumer about the new products; The very nature foundation of viral marketing;
    I would say do not use ppc without Mentors…who can help you thru the process..! http://adwords.la

  11. Well done Brian, you have explained the pros and cons of PPC clearly.

    Internet marketing strategies do very depending on geographic location of the target customer and what products or service you are selling.

    At Adeo Internet Marketing we often recommend a PPC campaign as a way to validate a key phrase before undertaking a SEO campaign.

    Derek

  12. #2 in the reasons NOT to use PPC is particularly vital for search marketing firms to explain to clients.

    You can’t enter a campaign without clearly defined profit margins, without a clearly defined message, without a differentiation from your competition and expect to succeed.

    Stage ONE in any successful PPC campaign should be to determine the worth of your conversion, or if you sell something, determine how much you’re comfortable spending to attain your average sale value. Then, make all your bid assumptions based on that.

  13. So refreshing to read an honest, hype-free comparison of SEO and PPC – particularly since many consultants seem to be pushing them as the magic bullet to sell anything and everything to everyone. Since I’m a direct response copywriter vs. a highly-specialized SEO/SEM pro, this article adds much-needed balance.

    Despite devoting a healthy chunk of time to staying current on both strategies, the sheer overload of info (and hype) I find on blogs, social forums and sites can be overwhelming!

  14. All advertising is not created equal. There are different advertising quivers available to marketers, based on specific needs and situations. For those marketers with a need to generate a quantifiable amount of leads/revenue with their ad dollars, general awareness or even online display campaigns aren’t the best fit-for-purpose. With emerging digital capabilties and new media models such as CPA (cost-per-action), marketers can allocate risk-free dollars towards generating quantifiable numbers of customers and revenue dollars. Affilate networks such as Hydra, create brand-building campaigns using email, display, search, video and social media. These campaigns run over a network of affilates and generate costs only when deals close. These types of campaigns can actually be used to subsidize some of the softer marketing tactics which still have their place in the mix. Do ads pay? Some do some times. CPA ads pay every time.

  15. It is so vital to inform people of the organic SEO benefits. To gain the effects you need to have a skill set that understand all aspects of SEO and what is involved. But it truly is worth the time and effort and you point this across. This is excellent.

  16. Hi Brian:
    Great post. What do you do when you run into someone who wants to spend money on pay-per-click even when it’s a really bad idea. How do you persuade them to invest their time and energy in something else like email marketing, social networking, article marketing etc.? If they force you to go ahead with the PPC campaign, you’re going to look like an idiot because it’s not going to work.

  17. Good article Brian. I like to use a combination of SEO and PPC together. I find that if I optimize my page for SEO, then I am also usually rewarded with higher quality scores on Adwords which lowers my CPC. But you’re right, PPC is not right for every situation.

  18. I agree with your post that pay per click advertising is not for every business. It’s imperative to do some competitor research in order to know what you’re up against.

    If you’re going to go the PPC route, targeting the right keywords for your advertising campaign is important to maximize your return on investment.

    Great tips, cheers!