The Death of Pay Per Click Advertising (PPC)

Sookie Shuen
Sookie Shuen Community Manager, Tomorrow People

Posted on March 20th 2012

The Death of Pay Per Click Advertising (PPC)

eguide download death of ppc

For something that’s been around for just a few years, PayPer Click advertising, or PPC has become an established part of online marketing for many companies. Put simply, “Paid search marketing is the process of gaining traffic by purchasing ads on search engines. It is sometimes referred to as CPC (cost-per-click) or PPC (pay-per-click) marketing, because most search ads are sold on a CPC / PPC basis.” (Source: Search Engine Land). Yet while PPC seems to have become a staple of online marketing, there are clear signs that it is dying out as a lone marketing resource. For example, recent research has revealed that just 18% of SMEs using Google Adwords actually recoup their investment (Source: YouGov).

Why use something that’s not working right?

So why do businesses continue to use a marketing channel that is failing to win them new business? On the surface of it, PPC looks like an easy way to bring in new leads. After all, you can automate it - or ask one of the thousands of PPC agencies out there to do it for you. PPC is part of the many ‘get rich quick’ approaches that sprang up alongside the exponential growth of the internet in the past ten years. That isn’t to say that PPC doesn’t have its value, but it is currently being misused by many businesses. PPC can deliver results when it is used for a short-term, highly targeted campaigns, but used in the long-term it often becomes costly. Web users have quickly learned to filter out internet advertising, with fewer people clicking on advertising than on organic listings. All these issues add up to the important fact that PPC delivers lower returns than SEO and content marketing. In short, PPC done on its own is costly when compared to the alternatives.

Two important reasons why PPC is failing businesses:

PPC appears to offer a simple solution - paid ads to drive people to your website. But used on its own it actually fails companies because:

It’s a short-term fix

PPC is purely about grabbing the potential customer’s attention without actually developing a lasting relationship with them. It focuses on the attraction stage and neglects to actually nurture and convert the buyer. This is why used alone, it can only ever offer limited returns.

It is brand-unaware

PPC is purely about the ad and about capturing the interest of window shoppers. With no brand awareness or value proposition around it, the PPC campaign tends to attract window shoppers who are focused on cost rather than quality.

making ppc pay

Making Pay Per Click really pay

So PPC as it stands right now is not bringing businesses the rewards it could be. But what can companies do to win better returns from PPC?

Be strategic, not short-term

Planning your PPC campaign for the long-term will make it more effective and profitable. Fit it in with an overall inbound marketing strategy and you’re likely to gain more long-term leads and revenue instead of window shoppers.

Get real intelligence on web traffic

PPC is focused around gaining high volume results and often comes with confusing data and analytics on visitor numbers. Use inbound marketing technology to track conversions so that you can gain full intelligence on all your web traffic, right down to each individual web visitor.

Build loyalty to create long-term revenue

Use PPC within a wider inbound marketing approach to align your ads with matching content on your site and nurture visitors into customers. This also helps you to build a profitable profile as a thought leader.

Plan for the long-term

Instead of taking the quick fix route, use inbound marketing technology to shape a long-term PPC campaign that uses the relevant keywords and allows you to stay up to date with the search terms people are looking for right now.

Finetune and optimise for better results

Inbound marketing technology allows you to identify more effective and more targeted keywords. It also lets you eliminate negative keywords and reminds you about including misspellings – all helping to win you more sales. With inbound marketing technology you can also optimise your keywords for better results – so you know the exact details you need to know to reach the right people, including times, location of ads and demographics.

Test for the best

Get more from PPC by continually testing for what works best. Undertake regular A/B testing to create the most effective ads, keywords and landing pages to nurture and convert your web visitors.

Use Ad Extensions

Use Ad Extensions to include sub links in your text adverts and increase click throughs and boost traffic to your site.

Get linked up

Link your AdWords account to use Google Analytics and find out which positions your adverts perform best in and adapt your strategy accordingly.

Increase Click Throughs and Cost Per Conversions

Work on increasing your Click Through Rate and Cost Per Conversions as you could gain a reduction in your Cost Per Click as a thank you from Google for giving Google search users what they want.

Think bigger than basic

Look outside of the basic text adverts. Use graphic and animated banners across highly targeted websites in the AdWords Display Network.

The next step for PPC

PPC isn’t dying yet. But is still being underused by many businesses and offering very limited returns. So what is the next step for companies looking to get better results from PPC?

Create a strategy

It can be very tempting to go for a quick win with PPC. But this can end up costing you in the long-run. Instead, build a clear strategy using inbound technology to monitor and update your advert content, location and links. Use inbound marketing technology to gain a better insight into the results of your campaign, right down to the individual web visitor and how they got to your web page. Use A/B testing to make your PPC as effective as possible. Within this, include a plan to increase your Click Through Rate and Cost Per Conversion for rewards from Google. Create a clear strategy and you’ll begin to see the results you want with PPC.

Sookie Shuen

Sookie Shuen

Community Manager, Tomorrow People

I’m a community manager, social media engagement specialist, and a brand advocate. I utilise various social media channels as a lead generation tool.
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Comments

jmacofearth
Posted on March 20th 2012 at 2:50PM

Nice overview of the changes necessary to have an effective PPC campaign. But perhaps the primary thing you missed, I think, is how PPC can rapidly inform and guide a business in targeting their Organic search and even the "messaging" for their advertising. While the ads on Facebook certainly don't deliver the revenue, they do offer millions of eyeballs and if a message resonates there, with clicks, perhaps it will work elsewhere, as Organic or Direct Mail.


And of course the Google PPC industry is quite healthy as a business tool. So PPC is not dead, it's merely changing. It's a tool. Just like social media. It's not THE ANSWER, but it's part of a strategy, as you say.

 

Without strategy PPC, Social, SEO, they are all just shots in the dark. Analytics and Optimization, those are the new religions.

 

John McElhenney
www.uber.la // @jmacofearth

Sookie Shuen
Posted on March 21st 2012 at 9:05AM

John, you do have a strong point there. Users are telling search engines exactly what they want and when, and marketers have the opportunity to be visible to their audience at that exact moment. As a marketer, what more could you ask for? :)

lisafick1
Posted on March 20th 2012 at 2:58PM

Good Article, so what are some of your favorite Inbound Marketing Technologies?  Any recommendations

Sookie Shuen
Posted on March 21st 2012 at 9:09AM

Lisa, there are loads of inbound marketing technologies out there. We personally use Hubspot. They have an amazing blog that I recommend you should subscribe to as well.

cmartinsmd
Posted on March 20th 2012 at 6:40PM

Company's  are in their experimental stage when it comes to PPC advertising.  If the results reported are not looking solid at this time it's because we are all still working hard on learning what works and what doesn't.  

I believe with so much content flowing a business using PPC advertising will have an advantage over one that does not participate.  But, the PPC ad should have a call to action attached and be evoloving not static..  For example, my clients want to build their social communities and we use PPC ads quiet effectively to meet that goal.  Another one of my clients has a very niche product with a specific radius and PPC ads have helped thier  demographics find them.  Good luck with it all and keep exploring what will work best for your company!  

Carolyn Martin, founder, www.socialmediademand.com 

Sookie Shuen
Posted on March 21st 2012 at 9:00AM

Hi Carolyn,

You are absolutely correct, you need to make sure that your ad copy needs have the following points within the CTA:

  • Value
  • Offer
  • Proposition

Good luck in your future PPC campaigns!

Brandt Page
Posted on March 20th 2012 at 7:54PM

This is a very helpful article, I am running http://launchleads.com and we have been primarily focused on generating b2b leads via phones, and we also help our clients verify and qualify their inbound leads from ppc, with an immediate phone response, but we have been interested in doing our own ppc/seo for our clients to help own more of the funnel, this article gives me some insight as to what would be the best way to go about that. Thanks again. 

Sookie Shuen
Posted on March 21st 2012 at 8:58AM

Hi Brandt, thanks, I hope you'll be able to implement those tips into your PPC campaign.

PurpleFishMarketing
Posted on March 20th 2012 at 8:16PM

Good article about Pay Per Click Advertising. I agree that it's not as strong as organic search results and I don't think it ever will be, because people know those are ads. Although it can certainly catch more eyes, if it's not converting then it doesn't matter.

I'd be curious to see if the next step with Adwords for Google is to start moving to more of the social advertising that Facebook is doing now. With Google+ they will eventually have the data to place ads that have more of a "relationship" to them.

 

Jason Bazinet

www.purplefishmarketing.com

Sookie Shuen
Posted on March 21st 2012 at 8:56AM

Hi Jason,

I guess Google has already started doing their own version of social advertising. Google+, the +1 button, and +1 Annotations increase the social visibility and relevance of your business to potential customers as they browse the web, making you a part of their everyday web browsing activities. So there you go, Voilà!

Thanks for your comment!

theonetrueguide
Posted on March 21st 2012 at 3:34AM

As much as PPC is getting a smaller share of the internet pie, it's undoubtedly here to stay. I mean, there will always be people/companies who want instant results or have spare cash to burn.

 

And even if some of them learn their lessons, there will be 'newbies' who come on board to go through the cycle the hard way.

 

Looking at how the search engines are evolving, the bottomline of providing relevant content will continue to resonate stronger than ever. That's why organic search traffic will, all things being equal, make the most sense in the long run.

 

As Keith Cunningham said, 'Find out what they want, go and get it, give it to them!'. Although it's in the context of the offline brick and mortar businesses, I believe it's directly applicable to building a sustainable business online too.

 

That's why, in the long term, only sites that offer true value in terms of what people are looking for will hang around.

 

Sean L.

http://www.successful-online-business-guide.com/

Dimitri Visser
Posted on October 8th 2012 at 12:25PM

I think the title of the article doesn't really cover the content. PPC is still the best way to get traffic if you need it fast and for a short time. And all sugestions given here can be applied to other techniques for getting traffic, like search engine optimisation and social media, as well...

Dimitri Visser

Mun Yin
Posted on March 21st 2012 at 10:06AM

Think you also need to consider what you want it to achieve (branding vs. direct sales), and it should probably just be a part of an overall online marketing mix. I can't personally see it dying out soon, search engines are just too important to most users.

 

I'm also pretty sure PPC has been around for longer than just 'a few years'!

Margaux Caffa
Posted on March 21st 2012 at 3:51PM

The article recommends you to ''increase click throughs and cost per conversions.'' Increasing your CTR is a no-brainer but why would you want to increase your cost per conversion??? You should be trying to reduce it to increase your ROI.

Sookie Shuen
Posted on March 23rd 2012 at 5:11PM

Hi Margaux,

You are right, it's a typo mistake, it should be increase click through rates and reduce cost per conversion. I do apologise for that. :)

sbazerque
Posted on March 21st 2012 at 3:52PM

 

If you want to retire in 30 years, you may go to the stock market and invest your savings directly, but it's gonna be risky and actually making money is going to require some serious effort. Stocks are fine as a mechanism for buying and selling equity, but for your retirement it would be better 99% of the time to just go to a retirement fund, that for a small fee will take care of your retirement savings responsibly and efficiently (well, give or take a major financial crisis, but that's not the point).

 

CPC is great as a pricing model, but doesn't present an efficient interface to end users. You can pick your individual CPCs if you want, but that's going to take skill and effort. 99% of the time, you would be better off delegating your CPC optimization. You can use a cheap and efficient automatic optimizer, like BidBrains.com for example (disclosure: I work there). But there are many others.

PamMoore
Posted on March 21st 2012 at 4:55PM

The title of your article does not reflect the content. Overall I think your article would confuse many new to online marketing and PPC. 

While I agree with you on most points, I don't think PPC ever was considered a stand alone solution. I also think most businesses who saw results with PPC got that. To see any results with PPC requires content, a landing page, a lead funnel etc. 

Also, I don't agree that it is always only a short term solution. It all depends on your business, services or products offered, target markets, their online behaviors etc.  If a business's target market does not often use the internet and will only do such in an emergency situation when they need to find the product or service then PPC works perfect.

We have few clients that use PPC for many of the reasons you mention in this article. However, for some clients and their niches, PPC works great. For these same clients investing in loads of content continuously wouldn't make sense and could actually be more expensive for them because of the behavior of your audience.  I am a BIG believer in content so am not stating such because I don't believe in inbound or content marketing. I am simply stating it may work for some clients. 

You also state that it is brand unaware? This is not true in that if it is a large global or national brand then a PPC ad may work great as the URL will often highlight the ad, the name of the company is in the ad. I have seen large national clients get excellent results via PPC because of this simple reason. They get the clicks because of their strong brand. 

Anyway, hope this helps.


Pam 

Margaux Caffa
Posted on March 21st 2012 at 5:24PM

The article recommends you to ''increase click throughs and cost per conversions.'' Increasing your CTR is a no-brainer but why would you want to increase your cost per conversion??? You should be trying to reduce it to increase your ROI.

jakehyten
Posted on March 25th 2012 at 11:48PM

Although I think it is getting harder to do ppc CORRECTLY I do not think it is dying. Although I don't, I would be more likely to agree if you said that certain ppc media were dying. But as with everything when one thing is not working as well, there are a dozen other new methods and new ppc media that do produce results if done correctly.

You also mentioned that ppc is failing because it is a short term fix and only focused on branding. Because people do not build relationships with customers that come from ppc traffic, does not mean it is the traffic sources fault. 

Things are changing and evolving a lot more rapidly in this industry than they every have. You can't use cookie cutter approaches to your marketing and rely on any one medium or method. You have to figure out where your customers hang out online and how you can engage with them, be it ppc, cpm, social media or any other medium.


The biggest mistake I see small business owners making is not that they spend money on marketing methods that aren't the most effective but they aren't building relationships and distinguishing themselves and monetizing the long term business of that customer.


Jake Hyten
http://www.phareenterprises.com

 

Aline Bandeira
Posted on March 22nd 2012 at 12:47PM

You can use PPC to create a lasting relationship, but it's not that common. I agree there are other ways to do that but multi-channel analytics is just proving us that PPC is ONE of the main ways to get to reach the public.  

karllloyd58
Posted on March 22nd 2012 at 2:13PM

Very well explained and written Sookie I am always in admiration of those people that have the ability to explain things clearly and cleverly. 

I have recently come in contact with a company called BannersBroker that pays commissions to its clients for sending out banner impressions and receiving PPC to those impressions. They have over 21,000 clients all doing as I am and they are growing by the day. As far as I am aware they are earning revenue in the same way that Google earn their billions and growing.

It is a multi billion $ industry and the internet in my view is the future and where it is at, so therefor in your opinion do you think that they will hit a saturation point of available marketing space or will the likes of over 21,000 of us still be earning revenue in years to come.

Sergei Izrailev
Posted on March 22nd 2012 at 3:36PM

Regarding PPC in display advertising, a study conducted by Collective last year of 100 campaigns showed no correlation between click-through rate (CTR) and brand lift nor purchase intent as measured by independent post-impression survey. Detailed study results are at the Collective web site. See also page 6 on CTR in the recent white paper on causal attribution for more research data.

mattmchugh.com
Posted on March 23rd 2012 at 6:51PM

Two quick thoughts:

1)   "...recent research has revealed that just 18% of SMEs using Google Adwords actually recoup their investment" (Source: YouGov).  With no explanation of the methodology, definitions, or data involved in this "recent research," this is roughly the value of barbershop gossip.  (Which is innately true of most things connected to social media.)

2)  The idea most advertising dollars could ever be directly, 1-to-1, trackably recoupable is ridiculous.  Advertising is an operating expense.  If you keep it in an acceptable ratio to your income, you're doing OK.  That's not to say you shouldn't use precise analysis to help maximize specific advertising ROI -- but recouping advertising spend is like recouping your rent.  It's all about the bottom line.

I imagine what this really says is that only 18% of SMEs have good profit margins.  That sounds believable to me.

 -- mattmchugh.com

 

jdavidgreen
Posted on March 24th 2012 at 3:43AM

Google's financials and Microsoft's level of investment in growing share with Bing would suggest that PPC is doing just fine.  The issue is really about doing marketing well, not the marketing channel.  The big flaws we see are as follows:

1. A lack of insight and wisdom about customer motivations. Unless you climb into the mind of your customer and take the journey with him or her, step by step, you're going to leak revenue, whether you're talking about lead capture or ecommerce.

2. A lack, credibility, appeal, and/or exclusivity of your value proposition. Your value proposition answers the question, why should your customer a) buy from your company b) buy a particular product or service from your company and c) take a particular action at a particular point in time. And your value proposition must answer those questions for each segment of your market.

3. Too much friction in your ad, your landing page, or the sales path.  Friction comes in all shapes and sizes, like too much data capture or too much data capture prematurely.

4. Too little incentive to take a particular action. 

5. Too much anxiety, typically at the point of capture.

www.MarketingExperiments.com teaches free clinics on this methodology and I would encourage PPC marketers who are not having success to attend those clinics.  www.MarketingSherpa.com is another source of great marketing information on this topic, much of it free.

 

Exit Strategy
Posted on May 6th 2012 at 8:13PM

We've done numerous PPC campaigns and have concluded that the cost outweighs the benefit.  Even after using SEO techniques to reduce the cost per click to a minimum, it would require us to increase our products prices by a minimum of a factor of four to make PPC work for us.  

We have since put our effort into SEO and improving our organic search results.  We also are using direct mail to elevate the business community's awareness of our products and drive traffic to our site.  

I'm probably more of a geek than a marketer, but it seems that the best strategy is to try everything you can think of until you find something that works.

Micheal1975
Posted on October 2nd 2012 at 8:09PM

Quite an interesting read Sookie.  I am into the PPC game as well and run a small pay per click company and we are always on the lookout to serve our clients better.  

Lets face it, after the latest Google Penguin updates, most webmasters whose site's got hit are leaning towards paid ads to get most of their traffic.  SEOs would have to rethink their strategies. The sad part is that majority thinks Google Ads seem to be the only viable alternative. Which makes me think - was Penguin update really meant to get more $$$ for big G? 

Anyways, you are absolutely correct in citing that PPC is not dying YET :)  It can still be a feasible means of advertising.  All we need to do is make the clients aware of how PPC exactly works so they get a better understanding and eventually come up with a good strategy.  

Regards,

Micheal of ClickXposure

Micheal1975
Posted on October 8th 2012 at 1:56AM

Oops, seems like I double posted my first comment.. sorry....

hmayag
Posted on November 27th 2012 at 1:28PM

Why ideal clicks, two dollars a click, two dollar click, six dollar click do not pay to the people that made the job watching the advertaising anounces every day.

I can´t understand , if they don´t have the money for the jobs, is better that do not meke the jobs offer.

BoxedUpChris
Posted on May 19th 2014 at 5:56PM

PPC does still work and there will always be a place for it.

Why, because PPC is an auction that finds a commercial value through competitive influences. So, when other marketing channels are more cost effective, advertisers will spend less on PPC and the click values will reduce.

On the other hand, social media is increasingly beeing seen as a platform for businesses to annoy people. Follow and I'll like you on Facebook or you can win some meaningless prize - the list is endless! Groan...

When social media is done well it is effective, but when done badly it is like dragging nails down a blackboard. A bit like bad PPC I guess...