When Pay Per Click Is NOT Right For You

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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.

Brian Carter
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... Read Full Bio
Brian Carter
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