Pay-per-click (PPC) advertising can be an expensive marketing strategy for many smaller businesses. Still, it can be a very effective tool for driving traffic to your site and making sales or “conversions.”
To embrace, what online marketing software company, HubSpot, calls “inbound marketing”, executives need to rethink traditional interruptive strategies and consider using PPC advertising, search engine optimization (SEO), blogging and social media.
HubSpot’s vice-president of marketing, Mike Volpe, has many tips for making your PPC strategy more effective.
While it can be expensive, pay-per-click is a very effective tool for marketers to do initial testing when devising their overall strategy, and for learning how to build future ads and receive reports on traffic from Google.
The most important thing you want to get out of pay-per-click is higher conversion rates. This refers to the percentage of users (of the total number who visit your site) who actually do what you intended them to: purchase a product, download a report or fill out a form.
Better conversion can be achieved by increasing click-through rates: the number of searchers who click on your advertisement, Volpe said.
And an increase in click-throughs can be achieved by testing.Executives should test keywords, focusing on popular search terms, such as “free” or “download” and check out their competitor’s ads to see what works for them.
Marketers should be monitoring the variations of ads produced and put a hold on the ones that aren’t doing well. Volpe says you want to make sure all of the ads have been viewed at least 100 or 200 times before making any decisions.
When choosing keywords, Volpe recommends using a three- or four- word, rather than a one-word phrase, which can be expensive when bidding and highly competitive when search results are being ranked.
You need to also consider the type of keyword search you use, Volpe said. On Google, you can choose three different types of match types for Google which will affect your outcome.
Choosing a broad match strategy will make your ad show up for singular and plural forms, synonyms and other relevant variations or synonyms of the word. You will have a higher impression rate with this strategy but a lower click-through rate because the words are less targeted.
A phrase match, involving keywords with a phrase in quotations, is a little more specific if you want to increase click-through rates but can sometimes be ineffective because it places your keywords in between other sentences, changing the meaning or subject of the keyword search.
Exact matches will only reveal matches with that exact search and is much more targeted.
Users can improve their conversion rates by ensuring the landing page that their ad is directed to is not the homepage, but the object they are trying to sell or advertise.
“All things have interplay that I like to call ‘the state of mind of the searcher,'” Volpe said. He urges marketers to “take a step back and think not about what you want to accomplish but what the person who is doing the search is trying to accomplish.”
You can also improve your keyword strategy by using negative keywords, by adding a dash, Volpe said. For instance, if you sell a high-end product, use a dash to omit search words, such as free or low-cost.
There are a variety of strategies to improve your keyword selection, Volpe said. “The first way is to talk to your customers and find out what keywords they would use if searching for your products, ask them what they would call your product in a few simple words.
“Also, find out what keywords are already driving traffic to your site. There are a variety of software tools available, such as HubSpot’s Keyword Grader, and a number of rudimentary Google tools available on their site.”
Another way to improve your pay-per-click strategy is to combine paid advertising with SEO strategies.
While PPC is an effective tool for immediate sales, once you stop paying Google, your click-through and conversion rates automatically drop.
Volpe compares PPC to liposuction and SEO to going to the gym. “SEO takes more time and effort but it’s less expensive and effects are longer lasting.”
Making your Web page or blog more SEO-friendly will ensure the content you created years ago is constantly being clicked on.
David Hallerman, senior analyst at New York-based market research group, eMarketer, and author of the recently-released report, Search Ad Spending: Reactions to a Recession, says SEO is something that is still being under-utilized.
“To a certain degree many companies see it as a ‘black box’ – the result of SEO is not immediate – it’s something that improves over time, so it is harder to track. And it’s too bad because searchers tend to prefer organic listings over search ads. So improving SEO is something that could really help companies during the recession.”
His report states that search spending will continue to grow in 2009 and grow faster than any other kind of advertising, including television, radio and newspaper.
Search advertising’s share of total online ad spending reached 44 per cent in the first half of 2008, up from 41 per cent in the first half of 2007. eMarketer estimates that search ad spending passed $10 billion in 2008 and is expected to reach nearly $20 billion by 2013.
In 2009, it is expected to grab almost 48 per cent of the online advertising pie. However, while investing in search advertising is growing – it is growing at a much slower rate than ever seen before.
“Search and the Internet are part of the mainstream economy, so it will suffer along side it, but its growth comes from the desire among markets for a more accountable marketing strategy. As companies become more conservative in their spending, they will need to prove which tactics are working.
“Search allows marketers to see a direct connection between an ad and its ability to entice a user into clicking on it – showing potential conversions into sales.”
However, Young-Bean Song, senior director of Microsoft’s Seattle-based, Atlas Institute, providing digital media solutions for advertisers and publishers, says pay-per-click marketing strategies and the “last ad” or “final click” reporting standard is misleading.
Most searchers have come in contact with hundreds of other kinds of advertising before clicking on the search ad. “Channels influence each other,” Song said. “And there is a lot more advertising going on than the final clicks.”
Microsoft has created an “engagement mapping” tool to map all of the “touch points” consumers come in contact with, such as an e-mails or banner ads seen elsewhere on the Internet, which may influence their decision to click on the final ad.
For instance, if a user is buying a BestBuy DVD player, they may search the words BestBuy DVD player in Google, but if you check the user’s history – they may have seen a dozen other ads for the same product. Just because their final destination was a search engine ad –doesn’t mean it deserves the credit, he says.
Microsoft uses a mathematical strategy to help marketers determine which campaigns are increasing a company’s conversion rate.
For instance, larger ads make a bigger impact than smaller ones. Proximity of viewing date and purchase date also matters, as well as ad format. Rich media ads have a higher branding impact.
By taking these factors into consideration, executives have better insight into what contributes to the success of a digital campaign, Song said.
This is especially important now, as companies tighten their marketing budgets and falsely believe that focusing on search advertising will increase their revenue.
“Because advertisers are fixed on giving credit to their last click, they’re over-looking other aspects which are driving revenue.
“Companies that stop using display ads may see that their search results are starting to suffer or that their conversion rates on clicks are not as high. They’re missing out on the synergy between channels.”
Rather than focus all of their energy on search in 2009, Song says marketers have to continue buying banner ads and sending e-mails, as well as producing television and radio campaigns.
And if companies want to ensure their marketing dollars are being spent effectively, the engagement mapping tool will help executives see where their ROI is and help execs better allocate their advertising dollars.
“We will see metrics continue to evolve in the next year,” he says, “especially as companies need to justify their dollars.”