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Pay Per Click engines like Goto.com have been growing rapidly in popularity
over the past couple years. This has spurred an onslaught of new Pay Per
Click (PPC) Engines such as Sprinks, FindWhat, Kanoodle, and others. In
fact, at least 70 "me-too" PPC engines have sprung up across the Web,
many in the past year. The question is, are PPC engines really the big
marketing
opportunity that some people make them out to be?
Before answering this question, let's address "What is a PPC engine?"
As with many emerging technologies, they are known by several different names
and acronyms. Some people call them Pay
Per Placement engines (PPP), others call them Bid for Placement engines, and the
list goes on.
I believe the industry is now trying to standardize on "Pay Per Click"
as the official terminology. The reasoning goes that you do not
actually pay for placement on the majority of these engines. Technically,
the positions or listings are free. You pay only for each click (i.e.,
visitor) that you receive from that search engine listing. The person
placing the highest bid per click price for a keyword achieves the highest
placement or ranking.
So why pay for top rankings when they can still be achieved for free on many
major engines like Google, AltaVista, Lycos, and others? Applying tips
from this newsletter, WebPosition's Page
Critic, and other resources will launch me to the top right? So why pay to
be listed? There are many reasons for considering PPC's as part of your over-all
marketing strategy. You can achieve a top ranking on many PPC engines the
very same day versus waiting for weeks or months with the regular search
engines. You will also receive a guaranteed placement on every keyword you
choose without needing to tweak the content of your pages. You'll then
keep your ranking until someone outbids you. When this happens, your
listing will be pushed down a notch. In essence, you bid on rankings in a
real-time auction environment similar to the way eBay auctions products.
You pay only as much as you choose for the visitors they send you.
The advantage of PPC's over paying for banner ads is that you do not pay for
impressions displayed, but instead for actual click-throughs. With
banners, you could purchase 1,000 impressions for $40 and receive only 20
clicks, costing you a whopping $2 per visitor (this has happened to us a number
of
times). In general, there's no guarantees how much you'll pay per visitor
acquired with most forms of advertising. TV, radio, magazines, and
others normally force you to bear all the risk. YOU must create ads and
pick advertising locations that will be cost-effective for your business.
With PPC's, you still gamble that the visitors acquired will convert to enough
sales to pay for all those clicks. The sales generated versus the cost
paid to make that sale is often referred to as your Return on Investment, or ROI.
With the slowdown in the US economy and the stock market decline, ROI has
received renewed focus with the marketing departments at most companies.
Even though a PPC cannot guarantee you'll make a profit, it does offer you
significantly less risk than many other forms of advertising. It's also
commonly known that visitors from search
engines (PPC or otherwise) are much more likely to make a purchase than visitors
derived from traditional ads. Search engines provide you with highly
targeted visitors. Each click in
theory comes from someone who was actively looking for your products or
services.
Not all PPC's are created equal. Most receive relatively little traffic to
their site. Therefore, you could gain dozens of top rankings yet receive
little to no clicks during the month. That's the big problem with the
majority of the seventy or more "me-too" PPC's out there. They
aren't worth your time or
attention.
On the other hand, Goto.com boasts over a billion searches per month.
It has risen to become a significant player by paying the major portals like
AOL, MSN, AltaVista, Lycos, and others to
carry Goto listings on their results pages. The top two to three Goto.com
listings for each keyword will often be displayed under a "Featured"
or "Sponsored" area near the top of the engine's results page.
Are these "featured" listings clicked on as often as the regular
search results? No. However, because you pay only for clicks, you
don't really care. If you know you are profitable paying 30 cents a click,
then you want all the targeted clicks you can get.
Unfortunately, the greater volume of clicks from Goto comes at a price.
The average bid price on Goto will be significantly higher that
"second-tier" players like Sprinks, FindWhat, Kanoodle, and others.
You could average 50 cents per click on Goto and pay only 15 cents per click on
Sprinks for the same
keywords. Goto also has a 5 cent minimum bid whereas many other PPC's have
1 cent minimum bids.
So why use Goto? Because the second-tier PPC's may generate one third to
even one twentieth the amount of clicks that Goto generates, the extra volume
that Goto offers can be worth it. It then comes down to the value of your
time. You must set up and manage more bids on the less popular PPC's to
generate the same amount of traffic as Goto offers per month. However,
you'll get a lot more for your money with the second-tier PPC's.
Paying as little as 1 cent per visitor is dirt-cheap. If you can't make a
profit paying 1 cent per visitor, then you may be hard pressed to find many
advertising options that will work for you.
An exception might be to optimize for free rankings on the non-PPC search
engines. You can't beat free, targeted advertising. In addition, a
top ranking on a major engine like Yahoo, MSN, or AOL will yield far more
traffic than the same ranking on most PPC engines. However, you will have
an
investment in your time used to achieve those rankings. Once you come up
to speed on search engine optimization and acquire a tool to assist you (like
WebPosition), the investment will pay off
many times over. However, most companies will want to diversify into more
than one type of advertising, which is why PPC's are worth a look.
Tip #1: Focus your bids on keywords that closely apply to your Web
site's content. You'll be tempted to purchase listings on the most popular
keywords, which are often the most expensive
and least targeted. However, you pay by the click, so you want to do
everything you can to ensure that those who click on your ad are truly
interested in what you offer.
Tip #2: You'll also want to make the listing description closely match
your site's content. Create persuasive and compelling descriptions.
However, avoid descriptions that are so broad that they bring in too many
unqualified prospects. Otherwise you may secure a reasonable per click
price but
discover that few of those visitors are converting to sales.
Tip #3: You may also be tempted to bid only on keywords costing 1
cent. Why pay 30 cents when you can pay 1 cent right? Not
necessarily. You can find bargains for sure, but quite often
the cheapest keywords are also less popular, and thereby will bring less
traffic. It doesn't cost you any money to bid on terms that few people may
be clicking on, but it does cost you some time. It's generally worthwhile
to use Goto's keyword analysis service to find applicable keywords that are also
reasonably popular. |
