Pay Per Click (PPC)

Is Pay Per Click marketing a good solution for your business?  In many cases the answer is yes, but it may not be the BEST solution for your business.

Pay Per Click (PPC) marketing is a cost per action advertising model that allows you to pay only when a prospect takes action on your ad (in the case of PPC the action is a click through from your ad to your website or sales page).  It is a very flexible and powerful advertising medium, but it does have it’s limitations.

First, for our purpose today, I’m going to focus on search based PPC, (there are content driven PPC models and they also work well, but I’ll save a discussion on them for another post), so for search based PPC, your prospects have to be searching for what you offer.  If they aren’t, then search based PPC isn’t a good option for you.

Next, if you are in a highly competitive online market and your competitors can afford to spend more than you on leads, they PPC may not be a good solution.  PPC works on a auction pricing system where the advertisers bid on the keywords that they want to show up for.  So if you are in a market where your competitors can continually bid more than you and still make money, PPC isn’t a good option for you.

For example,  if you offer a specific product and specialize in only that product and your competitors offer the same product and also a line of complimentary products and they know that on average when a person buys the first product that they will buy 2 of the complimentary products over the next 12 months, then they will be able to pay more for that lead on the front end as they stand to make more on the back end than you, so they can just bid you out of the market.

Another example is a small business competing against a larger business (size doesn’t matter as much as scale and efficiency, but it’s easier to visualize a smaller company vs. a giant factory buying in bulk and having a lower overall cost per product) with a lower cost per product due to scale.  The small business won’t be able to bid as much per keyword or pay as much per lead as the larger business.  I call this the Wal-Mart effect.  Wal-Mart buys cheaper because of their buying power and can sell cheaper for that reason – it’s the same basic idea.

PPC is an excellent solution and can produce a very high return on investment for the right business.

Contact Renew Today to find out if PPC is right for your business!