In the last year or two i have seen a lot of support and positive chatter around the use of PPC advertising (Pay Per Click) – the highest profile of which is Google Adwords. Of course this chatter and support for PPC ad use is then reflected in increased activity with companies running their own adword campaigns and/or employing the services of specialists to run them on their behalf.

There are numerous reasons for this increasing PPC activity:

1. SEO laziness – as the web becomes bigger and technology more complicated, the effort required to optimize even a simple website let alone understand it is greater these days i admit. But the truth is, very few people bother to try, or even understand basic SEO. They want quick results and so look to advertising that can be done for them. To me, basic SEO knowledge for a website you own is like knowing how to change a tyre on your car or maybe changing the oil. You need to know a little about looking after such an asset or you probably shouldn’t own one. SEO can be complicated yes, but the basics aren’t as complicated as some people make out. Knowing the basics helps you make informed decisions. SEO doesn’t have to be expensive either. If you make some internal “time” investment into understanding your audience and the search words they use, then the external investment can be low for some good results. Albeit this may take a few months to show up.

2. Google “push” – Each year Google is increasing its page real estate geared towards paid advertising. When Google started, it offered free services; a search engine to find other sites and information online. We always knew that later on they would have to capitalize on this and start charging or making money in some way. So here it is, it’s happening more now than ever. Sometime soon i envisage Google will be a fully paid ‘search’ engine. When this day arrives, users worldwide would have been using the Google services so often and for such a long period of time, that the future use of Google for any average punter online will undeniable – if you want to be found, you will have to pay. This is not going away.

3. Marketers “push” – some of the recent stats produced show PPC advertising working well and beating down the traditional SEO model. These stats only support the figures themselves – they look good. But they cannot be quantified in sales or return on investment (ROI). Those that sell it say they can, but it’s poppy cock. The people selling this and offering to provide services for things like Adwords do not know if the “click” from an advert is someone who knew the company already and was simply looking for a number or an address, or if they were truly a new prospective customer. You can measure many things online, but a lot of these measurables are not actually that concrete in terms of ROI nor can they tell you enough about the audience to know what they were truly doing.

4. Statistics “push” – measuring what an audience does has always been the dilemma online. Trying to work out what people are doing and why. Today, we can still really only measure the volume, visits, browser, location and – in some cases – demographic, amongst a few other things. This is because statistics are “one away”. We are only viewing what users do, not what they want or think. We are not interacting or asking them anything for concrete answers. Marketers use stats to justify the sale and use of PPC ads. Terms like “unique visitors” and “page views” or “impressions” are used to determine if the advertising is working. But the truth is, they don’t really know if it’s working. Only the company being advertised will know this from sales activity and even then it is mostly subjective.

PPC ads scenario – In a good market your company might make 10-12% profit in one year from sales. This means for every million dollars of sales, you might make $100-120K after all expenses, salaries and costs. Business is good for you. But a recession comes and things are tighter. Profits drop to 5% per annum because you’re having to do more, be more competitive on price and sales are naturally less. So you decide you want to increase sales by improving leads online. A marketing group sells you on using Google Adwords and you embark on a $2K spend per month. This is a common story.

In one year you spend around $25K of profit on PPC ads. This means you needed to be making $500K of extra sales just to pay for the campaign let alone your time and effort! If you had spent say $50K on advertising, you needed to make another 1 million per annum in sales to cover the costs. For most small and medium sized businesses, a million dollar increase in sales inside a recession would be amazing.

“So if PPC is not what it’s cut out to be for alot of websites Dean, how come the figures say that PPC ads are some 65% vs 35% for organic SEO?” Click this link to see how this is justified.Here’s the catch – the PPC ads are mostly replacing the function of the organic listing for the majority of searchers. These searchers were simply after a number, address or some product information. They knew you and your service and deal with your company already. But it is easier to Google your name, so they do this and up it pops within an Adword. Once clicked, your money is spent. These customers/searchers click on the advert because it’s beckoning them at the top of the page and it’s easier to use than looking below. But they are not a new client nor do they want to buy any more than they did the week before. In fact i would be bold and say, from my experience, that roughly 80% of people that find you in the page results or show up in your stats Google you specifically. This means they would very likely look for your name in the organic search results if you weren’t using PPC ads! That’s right, much of your revenue in these campaigns is simply used up by lazy searchers who knew you. I occasionally do this myself! Recently i have been organizing a business trip and i googled “Wotif” and the name of the relevant city. Up comes the advert with “Wotif” and the city words in it. But if i look down below the PPC ads, the organic result is also there… but it isn’t so obvious and i didn’t need to use this because they gave me an advert at the top. Was i going to use another company from an advert if Wotif wasn’t advertising? No, very unlikely. I was after Wotif; i love and use their service a lot. But they lost money from me and probably millions of others, by putting in place an easier option advert. Ironically they come up well in organic search so i would question the money they spend in Adwords vs the return they receive.

Google is a massive index, it’s not Facebook trying to get you to click on an advert, it’s a directory making it easier to click on what you already know and is already there. It’s just they have turned these listings into adverts. Whoever pays more at any one time, pretty much gets to the top of the page with a little help from a good marketing group. It’s a very different proposition to almost any other form of online advertising; a Google advert is the directory result, so they are one in the same.

PPC ads can work, so don’t get me wrong here. But it is likely to be far more successful for larger value items where low volume sales will well exceed the spend in PPC ads. However, that also raises the point that large ticket items might often be in a niche market. It could then be argued that your money might be better spent working on relationships with wining and dining your customers … or maybe using very targeted advertising in niche publications on and offline. I am not an SEO analyst nor do i have the figures to know all the answers let alone the whole truth. But i do know that most people who embark on PPC advertising fall to these things below:

– Most can’t be bothered to learn basic SEO, so they look for other choices.
– They want fast results; a silver bullet.
– The marketing push is hard to resist backed by stats and Google, so they buy.

The only people really getting consistently good results with PPC advertising is the marketer selling you the services and Google. Some marketers are good at this; however, many are not. I kind of liken this whole activity to the stock market – tons of people investing, very few prospering.

My advice to anyone considering PPC ads:

1. If you proceed with any PPC ads, use a mix of low to medium spend with PPC ads for higher ticket items to target those specific types of sales, AND use a moderate spend in traditional SEO for lower ticket items (or information) for those regular customers who use Google to look you up often for simple things or high volume tasks.

2. Optimize your website content with the correct keywords that match your audience and make sure these are reflected in your page meta tags well before you embark on any SEO or PPC ads.

3. Where you can, at every customer touch point, try to have your sales people ask customers very briefly how they came to contact you – and record it. Make this a practice; it only takes a few seconds. Only then will you truly know what it is that is sending customers your way.

4. Ask for customer referrals so you can ring people about any SEO services you are thinking about using so that you’re confident the offering service knows their stuff.

Do we avoid PPC advertising? No, of course not, there is a place for it. But we can make better decisions and achieve better results by understanding PPC advertising, where to use it, why and what to expect from it.