Introduction to Pay Per Click Advertising Part 1

4 June, 2013

Colin McNulty asked:

Search Google for “Software” and down the right hand side, you’ll see links by websites who are paying Google to have their advert and site listed there on the first page of results. This is Pay Per Click Advertising and this is why Google now turns over more than $6 Billion per year!

The benefits of Pay Per Click internet advertising compared with traditional advertising methods is simply this: almost all traditional methods are broadcast methods to people who have shown little interest in buying your product. Think bill board posters, TV ads, radio ads, flyers through doors, magazine ads etc etc. They are all broadcast adverts. Sure there some targeted than others, if you are selling marketing services to businesses, you advertise in a Marketing magazine, but that’s a crude method these days.

Compare that to some searching Google for “how to do online marketing for lawyers”? That’s a person that right at that precise moment in time is interested in learning how to do online marketing for lawyers! If you expect to sell a product or service that can help them, you’d better hope that you’re on the first page of Google. How much is it worth to you to have that user visit your site within 5 seconds of typing that into their search engine? 5p? 10p? 50p?

Sure, you could search engine optimise your website to make sure you have first page rankings for that term, but this takes time and a reasonable investment in cash. This is where Pay Per Click marketing really comes into it’s own, and is under used in my opinion. You could be on the first page of google the same day for that search term for a very small budget. In a week you’d have some indication of how many people are really prepared to search for that term, visit your site, and buy your product. And it could even cost you less than £100 say. This is real time, right on the money, market research for a tiny budget that you simply can’t get any other way.

What’s more, let’s say that you are paying 20p per click, and 500 people click your advert making a total spend of £100. Let’s say your conversion rate is a modest 1%, so you’ve got 5 new orders and more importantly 5 new customers that you can now up sell to. All for £100 spend! How much is your average customer worth to you? It’s attractive isn’t it?

One important thing to know is how Google ranks the sponsored Pay Per Click marketing Adverts. In essence it’s a real time auction. The highest bidder wins. If you bid 20p and someone else bids 25p, they will rank above your. Actually it’s a lot more complicated than that, as if you have a better quality Pay Per Click advertising, it’s possible for you to rank higher than the 25p advert because Google will give boosts to higher performing Pay Per Click Adverts. What this means is that if your advertising professional knows what (s)he’s doing with Pay Per Click bid management, it’s possible to get higher rankings (read more traffic) for less money. So your valuable online website promotion budget goes further and you save money. Conversely, if your online advertising campaign is managed by someone who doesn’t know what they are doing, it will cost you more. Or worse, Google will penalise your campaign by artificially increasing the amount you have to pay for a click, this is called getting a “Google Slap” for being a bad Pay Per Click advertiser.

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