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Pros & Cons of Pay-Per-Click Advertising

By Vittorio Bosio

Pay-per-click (PPC) advertising is a very popular form of driving traffic to a website, especially to a brand-new one.

Google Adwords is the leader PPC engine, followed by Yahoo Search Marketing and MSN Adcenter.

No matter which one you choose to start with, the process is the same: you decide which keywords you want to target, write an ad and are charged every time someone clicks on it.

PPC advertising seems pretty straight-forward at first. If you don’t carefully track how well your campaign converts, you can end up with nothing in your hands at the end of the month.

Let’s analyze the pros and cons of PPC as a traffic source.

Advantages
PPC traffic can be turned on and off instantaneously. Once you have done your keyword research, you can be up and running in less than 15 minutes.
It is very targeted, since you can decide the time of day and the location from which your ads should be seen (country, city, etc.).

It’s the ideal method of testing how your website converts. You can run as many tests as you want, with the goal of improving your conversion rate. PPC can help you refine your website before using other traffic sources.

While in banner advertising you pay by impressions (an impression is when someone sees your ad), in PPC you pay only when someone clicks. This means you are paying only for the actual traffic Google is capable of sending you.

Disadvantages
While it has several advantages, PPC also has its pitfalls.

Google Adwords is a very popular way of driving traffic. The more people use the system, the more it will cost to achieve the top position. Depending on how many advertisers are in your market, it is not uncommon to go over $1 a click for the top spot.

Don’t rely solely on PPC. It easier for a competitor with deeper pockets to outbid you. Unlike search engine optimization (SEO), it is much easier for your competitors to replicate your success–they just need to have the budget for it.

Some people say that PPC is becoming more similar to SEO, because after the introduction of the quality score (a score given to every keyword in your account that determines the minimum cost per click you have to pay for your ad to appear), Google started assessing how you organize your campaigns AND if your landing page is relevant enough for the keywords you are advertising with. If you have a low quality score, Google will increase the minimum bid you have to pay.

Finally, since Adwords seems so easy at first, many advertisers do not invest the time necessary to track the ROI of their investment. They just turn their campaign on and suppose it will help them make more sales. Only by tracking your campaigns you know which keywords don’t convert and can exclude them from your campaign.

Your Thoughts?
Are you using Google Adwords? Can you think of a pros and cons that I forgot to mention above? What is your most burning question on Google Adwords? Please leave your comments below.

About the author: If you are interested in video tutorials and articles that can teach how to increase your web site traffic and build a list of targeted prospects for your business, you are going to like what Vittorio Bosio is saying on his blog: www.TechSavvyMarketer.com.

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This entry was posted on Thursday, November 29th, 2007 at 5:16 am and is filed under Lead Generation, Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

  • I believe another issue with PCC is that all users think differently when they see an advertisement. Some may choose to click it or others may scroll down and go to the other links with a description of what they are looking for. Honestly some user don't even consider anything that my look like an ad.
  • Michaela W.
    I believe another disadvantages of PPC is that some users tend to see the border around an ad and by pass it and go straight to the links below.
  • pauleen21
    Hi,

    I'm brand new to the Internet Business, and I've been doing some research as it applies to PPC's. Google made a very important warning on PPC Fraud. It may interest the people that visit your site to investigate this very serious problem. There are actually company's that pay individuals to go to their competitor's site and click on it so much that the PPC becomes burden because of price. Just thought I'd share this with you and your visitors.
  • it is good thing.

    <abbr>Internet Marketing's last blog post..Contact</abbr>
  • Just to throw a spanner in the works. If you are gaining high SERPS in your SEO campaign and have a PPC campaign working along side this, you will find that they will compliment each other. What I have found is my CTR goes up.

    I can't remember where I read this but it was from a reliable source (if not respond). Your general CTR for "organic results" is approximately 10 clicks per 1000 impressions. On Pay Per Click it's 20 per 1000. When the two are running alongside each other is doesn't double to 30, but jumps to 60 clicks per 1000 impresssions.

    So pros and pros when running along side each other.
  • Thanks for the great article about the Pros & Cons of Pay-Per-Click Advertising. I really liked how you separated the article into the advantages and disadvantages. I especially appreciated you identifying the importance of tracking ROI. One addition I wanted to add to the disadvantages side is the new Automatic Matching feature that Google Adwords turns on automatically. I think they have enough of everyone’s money without automatically turning on features that allow them to capture additional revenue without giving advertisers the option to opt-in to the new feature. If an advertiser doesn’t want to utilize the new feature they have to hunt thru their account to determine where they need to opt-out.
  • Mike,
    Regarding Glyphius, it actually works wonders for PPC. I sold one copy after a consultant ran her ads that she was running for a client on adwords through Glyphius. The software scored the ads and the ones that she had already determined were more successful scored higher.

    That said, you need to test and split-test. But at just $250 for the 2007 version, which the creator says is just 1-2% less effective than the 2008 version which costs almost twice that, it shouldn't take long to earn back the investment.
    Joshua
  • I agree that adwords prices are getting higher and higher. I am concerned that eventually the smaller online advertisers will be priced out by the bigger companies with huge advertising budgets. But, for the astute pay per click marketer, adwords can still be a very profitable advertsing tool.

    regards,

    AnthonyB.
  • I'm also really concerned about the rising click prices in AdWords. We've seen quite a few of our campaigns increase by an average of 50 cents a click over the last 4-5 months - and im sure its only going to get worse.
  • Thanks for the good block and the interesting information.Yes, I use Google Adwords and its work to like me a very much , because it easily enough and quickly. As is known time is money. If you well understand work of systems, prompt me, what system better? Where there are less than expenses, but the result is better?

    Excuse me for English bad, not the native language:)
  • When it comes to PPC, it always pays to know a little something about what it is your doing. More often than not, people who understand how PPC Search Engine Internet Marketing works, are not necessarily expert in the field.

    It is always better to learn the basics that just relying on the what the self proclaimed experts are saying.
  • PPC is useful when you have hughe margin in your product as I found out in my Internet Marketing Metrics Research.
  • abigail hunter
    Hey dudes,
    I've been using Glyphius for about 6 months. Like you, Vittorio, I ran headlines through it with significantly increased results. I do a lot of posting on Craig's List and the difference a good headline makes is really something.
  • Louise,

    I heard good things about Glyphius, but never actually used it. I have a swipe file of headlines that I put together out of the copywriting books and sales letters I read. I also use an inexpensive software called Headline Creator Pro, which I find very handy (it has far less features than Glyphius, though).

    Dom,

    Adwords is indeed a great tool to test a market, because you can turn the traffic on and off as you wish. It is wise to test the waters before diving in a new market and PPC is the way to do it. You pointed out a great advantage of Google Adwords that I missed. Thanks!
  • Hi Dom and Louise;

    I think Glyphius is more targeted to traditional ads rather than PPC ads.

    The issue with PPC ads is the very limited headline text (esp. with Google).

    The best test is trial and error. Keep experimenting and see which ones have high conversions.

    Thank you both for your comments.

    Mike
  • Dom
    Mike,

    Adwords is also good way to quickly test if there is a market for a new product not yet developed. The marketer can perhaps perform a survey on the landing page to learn if there's interest on a new item and/or technology possibly entering the marketplace. Obviously, such research may require having a solid marketing budget, but the knowledge gained could be priceless.
  • Louise K
    Your blog is well written and touches on important points of pay per click advertising. The one thing I noticed not mentioned was the context of the ads themselves. This is as important as deciding when and by whom they should be seen. I'd like to suggest you check out Glyphius.com. This software has you put in your ad and then tells you how effective it will be. You'd be surprised by changing just a word or two, how many more clicks you'll actually get. This software helps one get the most for their money.
    Thanks again for the valuable information. Ill be checking back for more!
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