We're all looking to make the most of our marketing dollar. How can we know if we are getting a return on investment? It's very hard to determine an ROI from traditional forms of advertising like television and radio. That's why many companies are moving their marketing budget into the digital space.
With digital marketing, impressions and clicks are tracked, sales are recorded and attributed, and conversions are calculated – thus giving companies proof that their advertising dollar is working.
What Is PPC Marketing?
PPC (Pay-Per-Click) simply means that you market on websites or search engines like Google and pay each time someone clicks your ad. When you preform a search on Google, the results that show at the very top in a light gold box, and the ones on the right side of the page are all ads called Google AdWords. Every time these ads are clicked, the company displaying the ad is charged.
You can also find PPC marketing on around 90% of websites out there. On many websites you will notice banner advertisements on the top, sides, and below web pages. These banner ads are also part of PPC marketing. Every time they are clicked, the advertiser is charged.
PPC Is More Effective
For starters, both forms of marketing operate with completely different strategies. Television commercials, radio commercials, magazine ads and billboards all eat up your marketing budget by purchasing impressions. That means that you are paying to serve your ad to people who aren't in need of your product or service – or perhaps are not even good candidates to convert into customers.
PPC advertising, on the other hand, targets people who are specifically in need of your product or service. Why cast out a wide net over the airwaves to the masses in hopes to obtain a sliver of the audience, when you can cast a much smaller/niche net out to only the people who need what you have to offer? The answer is you wouldn't – or at least you shouldn't.
Here's An Example
Let's say you own a real-estate company and you think it's a good idea to advertise on a local radio station that has a real-estate themed show. This sounds like a great spend of marketing dollars because you would be putting your message in front of people who like real-estate, right? The fact is most people who tune into the real-estate show are probably people who also sell real-estate. Also, how can you be sure that you gained any business from your commercial?
Instead, you should be placing your message in front of people looking to buy or sell homes. People who are searching online for home listings, or real-estate services. Not people who may need you down the road and will soon forget about your commercial the minute it ends. You want people who need you today, right now, in the real-time. That's what PPC marketing provides.
PPC Is Cheaper
Because PPC marketing delivers your marketing message to a more qualified audience, conversion rates are much higher than traditional forms of advertising – thus creating a lower acquisition cost. Let's say you spend $1,000 on a television commercial and from it you “supposedly” gain 10 new customers, worth on average $50 a piece. You find this out by asking all of your customers how they heard about you (a very inaccurate way to track results). So you spent $1,000 and made $500 back. That's a loss of $500.
Now let's move that same budget to PPC. For $1,000 you may expect a 3% conversion rate on PPC, vs a 1% on television. That means you received 30 customers compared to 10. And a positive return on investment of $500. And the best part is it's all trackable – and scalable. Now that you know what your ROI is, double your PPC budget and double your profits!
Is PPC Right For You?
You may have noticed that the ads you see online are more and more tailored to your likes and interests these days. That's the power of PPC and digital marketing at work! If you can describe your perfect customer, and want to place your product or service in front of them today, then PPC is a great marketing strategy for you. Start with a budget that makes sense for your type of business and market. There are many PPC management companies out there that can get you started.