Our previous articles "News Flash: The Internet Tells You What Your Customers Want" and "Choose Your Keywords Carefully; Your Website’s Success Depends On It!" showed how to identify the keywords that tell you what your customers want and give you the information to develop an eMarketing strategy. In "How to Search Engine Optimize Your Website" and "How to Submit Your Website to the Search Engines" , we explained how to get top positions for your website through Search Engine Optimization (SEO). An additional way to achieve top search-engine positions for your website is by using Pay-Per-Click (PPC) keyword buys, also called Pay-For-Performance (PFP).
In broad strokes (we’ll get specific about each search engine later on), here’s how PPC works. Many search engines offer services that enable you to "buy" or "bid" on keywords you have identified that your prospects are using to look for your services or products. Bidding for a keyword gives your website a favored position in the "sponsored" list the search engine generates when that keyword is searched. You are charged the amount of your bid every time a visitor "clicks-through" to your website from your listing on the search engine.
Websites listed on search engines with PPC programs are usually identified as "Sponsor Results," "AdWords," and so on. For example, when you enter the keyword "auto insurance" on Yahoo’s search, the top four listings on the first page of results are "Sponsor Results"; another four Sponsor Results are in box ads running down the right side.
Different search engines offer different prices and plans, but generally the more popular a keyword is, the higher you must bid (and pay) for each click-through. Keyword PPC charges are pre-estimated on a monthly basis and charged in advance of service.
From a business standpoint, PPC is leveraged with extreme pluses and minuses.
Keyword PPC pluses are:
• Speed Your website can have top-of-page placement in a few days, while fully optimizing a website can take 60 days or more, depending on the size of the site.
• Agility PPC programs can be terminated or changed quickly, letting you target the right keywords or enabling you to highlight fast offers.
• Niche Targeting Keyword PPC charges can be relatively low for limited-market products, making highly targeted offers economical.
• Control Some PPC vendors set up programs that let you limit your cost exposure by removing your listing when your budget is reached.
• Product/Service Targeting Search engines that accept PPC listings usually let you specify the page on your website each keyword click-through goes to. This lets prospects go right to the product or service page they want rather than to your home page.
• You pay only when someone clicks on your listing and goes to your website.
Keyword PPC minuses are:
• Sustained Cost This is the major drawback. Keyword PPC is very expensive for any sustained effort. For example, at 60 cents per click-through—an average cost—500 click-throughs per day on just one keyword costs $109,500 per year. SEO costs a fraction of this.
• Keyword Cost Generally, keywords are priced on a bid or market system that prices the keyword by its recent traffic. Keywords can cost from 10 cents to over $10 per click-through. Currently, the average click-through cost is about 60 cents.
• Unpredictability If you lock in a PPC rate, your page listing position can be changed or dropped without warning, depending on bids from others. If you lock in a page listing position, your potential costs can skyrocket as competitors bid up the PPC rate on your keyword.
More subtle factors are:
• Lack of Sell-Through PPC provides a shortcut to the discipline of SEO/eMarketing. Going through the strategic and tactical efforts of SEO/eMarketing leads you to understand the values your prospects are looking for, and to structure and optimize your website so it will get responses, close sales, and acquire customers.
• Incremental Cost Using PPC gives up one of the Internet’s strongest advantages: no incremental costs. Incremental costs are the added costs incurred to reach more prospects. For example, if you do a postal direct mailing to 1,000,000 addresses, and then increase your mailing to 2,000,000 addresses, all your associated costs will roughly double also. Without PPC, once your website is up, it costs virtually the same to operate no matter what your traffic and responses. Adding PPC costs means you are being charged immediately for prospects that click-through to your website, which will make you see your website in terms of immediate payback. This short-term thinking can keep you from investing in website features that give long-term value and prospect attraction, and can make you ever more dependent on PPC for your traffic.
The Economics of PPC Use for Three Types of Businesses
Paying Per Click forces you to be very calculated in your budgeting. (In our next article we will show you how to get bid fees for your keywords.) Here are some examples:
Tony Grass is President of e-Market Intelligence, an internet sales generation consultancy and service. Previously, he built a traditional 65-person sales and marketing communications company in Chicago. Contact is welcome through firstname.lastname@example.org.