What’s it mean when paid search spending takes a dip? It could mean any number of things, but I think in this case it could mean that advertisers are beginning to figure out the right mix of their advertising needs.
I’m talking about numbers from the fourth quarter last year. Some interesting tidbits:
- Overall ad spending went up for the year and down for the quarter
- Internet display advertising spend was up 5.5% for the year and down 5.9% in the fourth quarter
- Television advertising went up in both periods
- Magazine, newspaper, and radio ad spending went down for both periods
- Auto advertisers are spending the most
- Both Amazon and eBay are spending less on advertising
But I think the most interesting thing from this study is that paid search spending was down both for the year and for the quarter in 2011. But why?
Maybe advertisers diverted a part of their ad spend budget to other channels – for instance, network TV and network radio. The ad spend for network TV rose 7.7% in the fourth quarter and declined 2% for the year. However, network radio advertising increased 4.3% in the fourth quarter while going up 2.7% for the year. Paid search advertising, on the other hand, went down 6.4% and 2.8%, respectively.
Advertisers have always been a fickle bunch. You never know where the money is going to go until it gets there. One thing for sure: radio print advertising is on the decline overall. Television advertising likely won’t go anywhere any time soon. But Internet advertising is still new enough that it stays in a state of flux. There are always new advertisers willing to give it a try and the old advertisers are still trying to figure out how to fit it into their budget optimally.
If you are an advertiser and you are trying to figure out where paid search fits into your overall ad budget, give us call. We’ve been doing this a long time.
PPC, like all other things (on the Web and off) has evolved. And it continues to evolve. Google has largely been responsible for that evolution, but Facebook has played its part too. And it’s likely to evolve even more, but who knows who will be most influential in how that happens in the future?
One way that PPC has evolved is in the tools that advertisers use to track their campaigns. Both Google and Bing, and Facebook now, have tools that allow you to track your own PPC campaigns. But you might benefit more by using a third-party tool that you pay for. Especially if you run a lot of PPC campaigns on more than one platform.
PPC has evolved in other ways too. For instance, pay per click has morphed into pay per action. Advertisers can pay for user activity in a number of ways. Here are some of the more popular pay-per-advertising models:
- Pay per lead
- Pay per impression
- Pay per view (for videos)
- Pay per call (for mobile and phone actions)
You can expect some of these to expand as technology improves. Currently, pay per impression is generally expressed in terms of 1,000 impressions. But what will it be ten years from now?
Pay per click advertising has become one of the most effective branding and marketing channels online. Don’t expect it to stay the same. It will change. And mostly for the better.
Advertising has always been about multiple points of action. On one hand, advertisers expect to earn a return on investment. But they also want to brand themselves in the marketplace. Sometimes you can do one or the other but not both.
The first step to using PPC advertising as a branding tool is to set your goals. Determine what your point of ROI is for each click price point. Can you achieve branding effects by limiting your ad spend to a maximum so that you can also realize an ROI? If not, then you have a choice to make.
Is branding more important or is that ROI more important?
The key to using PPC as a branding tool is to plant your company name or product brand in the top of your prospect’s mind. You want them to think of your company when they think of the benefits of using your service. To do that, you’ve got to establish your brand as a top brand through psychological condition. That may require throwing out your advertising budget and just focusing on being No. 1.
Large corporations have been making these decisions for years. Online, with PPC particularly, it’s a decision that even small companies can make.
Does it matter how much you spend on advertising? Does it matter how much you spend on pay per click advertising? I’d say it only matters if you are not achieving an ROI on your investment. Or, rather, it doesn’t matter if you are achieving a positive ROI.
It seems that Google is making hand over fist on the top 20 PPC ad keywords.
No wonder. Look at the top 5:
- Insurance
- Loans
- Mortgage
- Attorney
- Credit
If you are in the banking, mortgage, credit, or legal business, then you have to pay top dollar for your PPC ads or risk big chances that you won’t get much traffic from your advertising. But the bottom line for any advertiser is, How much ROI do you realize based on your ad spend?
If you are a small insurance company, for instance, and you target your PPC advertising toward a specific niche within the industry or a geographic location, then you can cut your ad spend down based on a narrower market definition. You are also more likely to realize an ROI.
The key is to target your advertising to the specific niche you want to do business with. Narrow your market down as far as you can before you advertise. Long tail keywords are much more profitable for smaller budgets than general keyword phrases.
A few years ago, if you wanted to advertise using a pay-per-click model, you either had to go with Google or opt for one of the smaller search engines, pay less, and get less traffic. In fact, that wasn’t too long ago. But now, Facebook advertising is growing at a very rapid pace and seems to be threatening Google’s dominance. One thing that could tip the balance for advertising is real-time advertising.
According to AdAge, Facebook has started experimenting with real-time PPC ads.
It works like this: You post a status update that says, “I love peanut butter sandwiches.” In that instant, an ad appears on your wall promoting peanut butter. Maybe it’s Jif, maybe it’s Peter Pan, but you know it’s peanut butter. Would you click the ad?
I’m guessing that many users would click the ad – probably enough to make it worthwhile to advertisers to spend money on real-time advertising.
The article doesn’t say whether real-time ads would cost more than regular PPC ads, but if the value is there, it might be worth paying more. Virtually anything can be promoted in real time just based on users’ posting habits. This takes PPC advertising to a new level and it could push Facebook ahead of Google as the preferred PPC provider.
One oft-repeated storyline we hear is, “I don’t need to advertise; I get a steady stream of referrals based on my reputation.” That’s great. We wouldn’t dare knock a great reputation, but let me give you something else to think about.
What if you could increase your business by 10% just with a little bit of advertising? Or, better yet, what if you could increase your business by 10% over and above what you spend on advertising. Would that be worth it?
Most business owners would say, “Yes.”
Ten percent may not sound like much, but if you do $100,000 worth of business in one month then that’s an additional $10,000 worth of business. And a website doesn’t cost anywhere near that much. If it does then you’re probably using the wrong web designer.
A pay per click advertising campaign might cost you $2,000 per month. If it brings in $5,000 in business each month over and above your current clientele then you can turn some of that business into lifetime customers. That’s the goal, isn’t it?
And it’s just as likely that new customers you acquire through online advertising and Internet marketing will also spread the word about your business. Online, there are some powerful word of mouth tools that you and your clients can use – many of them for free.
With just a little bit of expense, you can increase your business a great amount. So don’t knock advertising.
A WebProNews article asks if Google AdSense will be in trouble if Facebook starts offering advertising opportunities. It’s a good question.
Two days ago we asked if Twitter was offering a new SEM model. We might just as well ask the same question of Facebook.
The difference between Facebook and Twitter, of course, is traffic. Facebook is only about 50 times the size of Twitter in terms of traffic. It is now the most trafficked website on the Internet. And it’s gathering information about its members that Google would kill for.
Every time you Like something on Facebook you are indicating your interests. Every time you comment on something or share something on Facebook you are indicating an interest. That’s much more valuable information to advertisers than a string of keywords you entered into a search query. And it’s something that I think Google knows as well.
If Facebook did roll out an ad network based on user interests, would you advertise through it?
Twitter has announced that it will start introducing ads called Promoted Tweets, except that these ads will be organic tweets with one exception. They’ll be labeled Promoted Tweets.
And there is one other difference as well:
There is one big difference between a Promoted Tweet and a regular Tweet. Promoted Tweets must meet a higher bar—they must resonate with users.
The plan is this …
Promoted Tweets will be added to users’ Twitter streams according to relevance. If Twitter users don’t reply to or retweet the Promoted Tweets then they’ll disappear. They won’t be shown any more. My question is, Will the advertiser be reimbursed for any unpublished tweets or is the risk a part of the deal? Do advertisers pay a flat rate and take a risk on the tweet not resonating?
This certainly looks interesting and if the first phase of advertisers manage to pull off ads that resonate then I’m guessing that other advertisers will be given an opportunity as well. Will Promoted Tweets become another potential advertising stream for search engine marketers who want to reach their target audiences? Will it fly?
A few years ago, around the turn of the millennium, the forums were abuzz with discussions of whether display advertising or PPC advertising would win out in the hearts and minds of Internet advertisers. I guess we now know – PPC won.
But will it last?
I’m betting PPC will be around awhile, for a few very simple reasons:
- It allows advertisers the ability to control their spend. What other kind of advertising allows this? With PPC, you can set your own budget. Is it perfect? No. There are downsides, but even with the downsides, PPC still have this advantage over other forms of advertising.
- It provides a direct route from first impression to conversion. There is only one thing between the two – your landing page, or sales page. With other forms of advertising (TV, radio, etc.), there is something else that must take place – a drive, a phone call, or whatever. With PPC, it’s click, read and close.
- It’s keyword based. Yes, PPC ads can be optimized. That’s a good thing.
PPC advertising is a direct shot from first impression to conversion and the advertiser is total control. The consumer has a choice and gets to see what is being offered before committing. It provides the best win-win opportunity for all involved.
Pay per click marketing isn’t so new any more. A lot of people are doing it. Some are more successful than others. Some people swear by it. Others swear at it. But no matter your view on pay per click advertising, there is one thing for sure. It is unique among advertising models and there is one thing in particular that makes it a special kind of advertising.
Pay per click advertising provides one benefit that no other form of advertising offers. Quality, targeted traffic.
You know that traffic is important to any web business. Get no site visitors and you can’t get any business. But even better than loads of traffic is moderate targeted traffic. I’d rather get 1,000 good quality leads than 100,000 paint pellets on a wall. Pay per click offers targeted traffic. If one does it right.
What that means is, if you do your keyword research well and you define your market followed by a well-written ad targeted toward your ideal audience and that uses a strong call to action, you should do well with pay per click. The size of your budget doesn’t matter. What does matter is the quality of your advertising.
