photo credit: gcoldironjr2003
When you’re starting out online and need to drive a good stream of traffic to your website or blog, the promise of instant, targeted advertising sounds like a dream come true. And if, as happens with pay-per-click advertising such as Google AdWords and Yahoo! Search Marketing, you only pay when it works and people actually visit your website, this makes it all the more enticing. But is pay-per-click really worth it? Should you rush off and get your AdWords account? Let’s take a look.
As you may know, when running a pay-per-click campaign, you choose some search engine keywords related to your business, decide the maximum you are willing to pay for clicks from people searching for those keywords and write some ads that will show on the search engines. I’m greatly oversimplifying here, but that’s the basic picture.
Now, the key thing to keep in mind with pay-per-click (as with any advertising) is the bottom line - what is the return on investment you are able to get?
The first part of the equation is how much you need to spend to get visitors to your website. This cost will vary, depending on a number of things - mostly on the keywords you choose, but also on how well you manage your campaign (which is why if you do run PPC advertising, hiring an expert to do it for you will probably save you lots of money in the long run). With a well-run campaign, you will find that the average cost to get a visitor to your site (cost-per-click) will drop steadily as your campaign is tweaked and tuned for performance. In any case, after a few weeks - sometimes even days - of PPC advertising you will have a pretty good picture of what it is costing you.
So, on to the next step: how much are you earning from each click? Fortunately, in many cases this is easy to measure with utilities like Google Analytics that allow you to follow your clicks and track the actions (sales, enquiries, etc.) that they generate. The easiest scenario is if you sell directly off your website. For example, if you sell soft toys and make an average of $10 profit on each order from your PPC clients and pay an average of 20 cents per click, you can work out that you need to make a sale every 50 clicks to break even, and anything over and above that is positive ROI.
In many other cases, the situation may not be so clear cut - for example, you might only be able to directly measure the number of enquiries you get on your contact form. Even so, you can generally still work out how many enquiries it takes you to make X amount of profit and judge the effectiveness of your pay-per-click campaign based on that. Of course, there could also be outcomes of a click, such as a phone or e-mail enquiry, that are impossible to measure automatically, and you should also keep these in mind when judging the benefits of your pay-per-click campaign.
Once you have all the information, you can decide if Pay-Per-Click cuts it for you or not. If your PPC advertising is leaving you in the red, you can obviously ditch it, but you can also try and optimize your PPC campaign so you spend less for each visitor you get, and you can improve your website so that it converts better, meaning more people who visit actually buy. If you’re getting a positive ROI, the decision to keep your PPC campaign is easier, but you still should make sure that both your campaign and your website are working at maximum efficiency, so you make the most of your efforts.
What I’m saying here is that with Pay-Per-Click, you often won’t know if it’s worth it unless you try, although some cases are more clear cut, but the good news is that even a modest trial budget is generally enough to test the waters. If you decide to go for it, the overhead of using an expert Pay-Per-Click manager who has the skills and insight to fine-tune your campaign is money well spent in the same way that it makes sense to get a professional mechanic to tweak your sports car’s engine.
Having said all that, do keep in mind that if your website is going to be around for the long term, even a successful Pay Per Click campaign is not a substitute for good SEO. In fact the two should ideally be run together initially and once the SEO takes effect, your PPC budget can be retained if it is generating you extra business, or redirected to focus on keywords not fully covered by your SEO, or even stopped altogether.
