Home » Marketing resources » Newsletter » October 2010

Web Search & Marketing Newsletter: October 2010

Welcome to the latest issue of our monthly newsletter which covers news and trends in the field of website marketing.

Following on from last month's issue where we looked at 10 common questions about Search Engine Optimisation and link building, this month we focus on Pay-Per-Click (PPC) Advertising and how this can work for your business. We've listed the 10 most common questions we're asked about PPC and Google AdWords, and hopefully we've answered some of the burning questions you've had too!

Next month we'll continue this special focus of our newsletter with some questions and answers about website analytics and Google Analytics, and then complete this series with a look at the more recent trends in Social Media Marketing.

We hope you enjoy these issues of the newsletter and, as ever, we welcome your feedback and would like to hear from you if there are any other questions we've not answered.

On to this month's edition...

Common FAQs for Pay-Per-Click Advertising (PPC)

So what is pay-per-click advertising?

Pay-per-click advertising (or PPC) has been the massive growth area in search engine marketing over recent years and refers to the online advertising technique whereby companies can buy ranking positions within the search engine results for their chosen search terms, based on a variable bid price. In doing so, a small advert panel will then appear within the search results (identified as sponsored links, results or sites) on most of the top search engines – typical PPC services are provided by Google AdWords or Yahoo! Search Marketing. Once a web searcher clicks on the advertising link that takes them through to the website, then the advertiser is charged a 'cost per click' which is based on the original bid price.

Why is PPC advertising so popular?

The rapid growth in PPC advertising expenditure over recent years reflects the popularity of this technique as a marketing tool, for a number of reasons. Firstly, it can be highly targeted by specific search terms, so advertisers can reach their prospective customers at the time they are searching for a product or service. It's relatively quick and easy to set up an account, although you need to beware of the pitfalls that many new advertisers fall into and waste much of their advertising budget! It's also a flexible marketing tool that can be used tactically or to test a section of a market, it can be targeted geographically and by website, and the data generated makes it highly measurable. This means that advertisers tend to get a much higher ROI (Return on Investment) from PPC advertising than many other forms of marketing, both online and offline, which is something that can't easily be ignored!

What's the difference between optimisation and PPC?

There are some significant differences between the techniques of search engine optimisation (SEO) and pay-per-click advertising. In simple terms, PPC is a paid advertising technique which can be turned on and off, whereas SEO is a technique that should be developed into every business website to give it a chance to attract site traffic from prospective customers. Both methods target prospective customers through search and can be used together as part of an overall search engine marketing strategy. We recommend testing a PPC campaign first to get your website some immediate web traffic and to test different search terms. Once the PPC campaign has been running for several weeks, the data gained from this can be used to develop or improve an SEO campaign, which can be more cost-effective to run in the long term, as search visits from these listings don't incur a cost per click.

How much will a PPC advertising campaign cost?

This will largely depend on the market that your website operates in, including the number of search terms that you wish to target, the competitive nature of the campaign (which can increase the bid costs) and the volumes of search traffic. It's best to start with a test budget or set monthly spend to assess the responses from the campaign, and then decide how to develop the campaign based on the results achieved and your overall objectives. Bid prices for each search term will vary as PPC advertising is essentially an auction where you bid for the highest ranking positions. Niche markets with few competitors could see bids from as little as 5c per click for a top ranking position, whereas more competitive markets with many active advertisers can see bid costs from $5 per click or higher for a top 3 position on Google. It's therefore important to set your advertising budgets on the expected visitor numbers coming to your site and the conversion rate and value you achieve.

How many keywords and adverts can I use?

This is unlimited and one reason why PPC advertising can be so flexible, since your ranking positions in the search results aren't so determined by the number of pages or content on your website (as with SEO). You can set up a wide range of relevant search terms and phrases, grouped into themes which are supported by one or more adverts. It's always good to test a number of different advert creatives and landing pages on a website at one time, to see which work best for your business.

Where can my PPC adverts appear?

Since Google is the market leader in search, their PPC service – Google AdWords – is also very popular and the first place to start advertising. Here you can decide where your adverts will appear, either by geographic location or by network. For example, you can just have your adverts appearing on Google's search results, or you can expand your coverage to Google's search partners, which are sites like BigPond on OptusZoo where search results are provided by Google. You can also use the Display Network and expand your reach across many other third-party websites that carry Google Ads. Also, don't forget other PPC services, such as Yahoo! Search Marketing, which displays ads on Yahoo7, NineMSN and other sites – this tool tends to be less competitive and although has a smaller share of the market, can still generate some very cost-effective results.

What if my competitors repeatedly click on my adverts?

This is a common concern from advertisers and something that Google and the other PPC services try hard to block. It's true that an occasional click on your advert by a competitor will result in you being charged for a visit, but any widespread abuse will be picked up by Google's sophisticated systems that safeguard against this 'click fraud' – such as repeated clicks from the same computer, or unusual click behaviour on a page of search results. Google will remove invalid clicks and not charge you for this, and you can see the number of these in the AdWords reports. If you do see any unusual activity such as a spike in visits and click cost, then you do have recourse to contact Google who will review the data and issue a credit, if applicable.

How can I track the performance of my PPC advertising?

There is lots of data recorded within a PPC advertising account to help you assess and manage the performance of your campaign. The main PPC account interface gives you activity data or you can run tailored reports to analyse the behaviour of search terms, adverts and more. You can track 'conversions', which is any action that takes place on your website, as well as phone calls in some cases. You can also link your PPC campaigns to your website analytics (such as Google Analytics) to review an extra level of data on the performance and effectiveness of the visits coming from your search advertising spend.

So is PPC advertising complicated?

Not necessarily, but you need to be careful! Google AdWords makes it very easy to set up a new PPC account and activate a campaign, but Google also makes it very easy to spend your advertising budget quickly - and if this happens you may think that PPC doesn't work for your business. You need to understand what the best strategies and techniques are, and to use the data to analyse and improve the performance of your campaign. Google is continually adding new tools to help manage an AdWords campaign and so you need to devote the time to using these and refining your bid positions based on the performance of your advertising. As PPC advertising continues to become more competitive, you also need to ensure that you're making the most of each visit to your site, which is where your website analytics is also important, as will be the need for conversion optimisation (which we'll cover in more detail in next month's newsletter).

What about outsourcing my PPC campaign management?

Of course, you can do this and allow specialists – such as the Web Marketing Workshop – to run your campaign for you! When you do outsource your PPC campaign management you need to be careful with some agencies who may charge a set monthly fee that combines your advertising spend and management fee. We clearly distinguish between the two costs as you should know how much actual advertising is being spent, as this will probably vary each month. You also need to make sure that the management of your campaign is completely transparent and that you can see detailed information about search term performance and spend. It's also not a good idea to get tied into a long-term contract, in case the relationship sours. We don't operate with any minimum contract period, as we believe our responsiveness, experience and results will speak for themselves! If you're not yet a client and would like to know more about our PPC management service, please contact us for details.

We hope that the above questions and answers have helped to explain or clarify some of the core issues surrounding pay-per-click advertising. If you would like any further information on any of these points, or would like us to answer any other questions that you have, please contact us now.

Recent articles from The Marketing Workbench

The Marketing Workbench is our regular web marketing blog covering news and comment on Internet marketing events and trends. If you want to keep track of current stories you can visit this section of our website on a regular basis, or set up an RSS feed. These are just some of the items posted over the past month: