Is pay-per-click for you?

Everybody is doing pay-per-click, or so it seems. For those who don't know, this is the sponsored links that appear on all the major search engines. It's what's made them profitable and it's what's fueling the growth in online advertising, account for half the total budget.

Certainly the big online spenders are putting a lot of money into PPC. Financial services, travel and automotive have pushed up the costs of generic terms, such as "mortgage" or "flights", as far as it will go. (Costs are now coming down on the major terms, as the nature of the offering, with the best advertising slots going to the highest bidder ensures that each term will find it's natural cost level.)

And now the big PPC Agencies are using sophisticated software to "develop the long tail". This involves using advanced technology to increase the number of terms used in the search for better value terms. Key accounts will have literally millions of key words covering every possible search terms that you could think of using to find one of their products. Interestingly, the larger PPC agencies are looking for clients with a minimum monthly spend of £10k or more.

In short, the PPC world has become very competitive indeed and if you want to compete with the big guns, you have to compete on price. And if you want to use the latest technology to compete on price you have to have a very significant budget to offset the cost of that technology at a sensible percentage of overall spend.

So what does that mean for a small business that is looking to do online advertising. Is PPC still a viable route, or is it the domain of the big player?

We need to consider what it is ...
- a good way to acquire visitors to you website
- a good way to test the water for online marketing for you company
- easy to track in terms of ROI and visitor activity (using Google analytics)

... and what it's not?
- a panacea and the solution to your problems

So if it can generate visitors, why isn't it the panacea that you've been looking for. The answer is in 2 parts: one, those visitors each come with a price and, two, unless they do what you want them to when they visit your site (normally buy something), then they do not deliver any value in exchange for that price.

Which brings us to the nub of the issue and shows us the key to making it work? As ever, the key is good old-fashioned marketing techniques, admittedly as applied to the technically led world. In simple terms ...
- develop the right product
- defining your audience (segmentation)
- targeting
- tracking
- analytics focusing on ROI
- test-learn-test

All of which makes me think back to my marketing diploma, which I took when the Internet was the next big thing and PPC hadn't been born.