Pay-Per-Click Marketing

Explore the Strategy of Pay-Per-Click Marketing

Pay-Per-Click marketing

For proof of the economic power of Internet marketing, look no further than the trend of massive Internet business buy-outs. Companies that don't even have brick-and-mortar offices are absorbed by major corporations like Google, Yahoo!, Facebook, and Microsoft for millions of dollars every year.

Consider the purchase of pay-per-click ad placement pioneer Overture by Yahoo! in 2003 for $1.63 billion.

That acquisition was well worth the investment, because pay-per-click marketing generated over $9 billion in revenue in 2004 alone, according to Internet World Stats. By then, Yahoo! wasn't the only company in the pay-per-click business, but saw large gains from their Overture acquisition in a short period of time. Today, more companies are looking to implement cost-effective, yet profitable, pay-per-click marketing campaigns, and look toward marketers with technological skill and traditional educational backgrounds to spearhead those efforts.

What is Pay-per-click Marketing?

Pay-per-click (PPC) is a method of purchasing targeted advertising space on Internet platforms that takes advantage of organic search terms. Advertisers pay the owners of a web space, such as a search engine results page or a specific webpage, a certain amount of money each time an Internet user clicks on their specific ad. This takes many different forms and has evolved since the technology was first introduced at a 1998 TED conference by Idealab founder Bill Gross.

Return on Investment for PPC

With the right price per-click, the right ad placement, and the right number of clicks purchased, PPC can produce an impressive return on investment. According to calculations provided by Entrepreneur.com, it's very easy to track cost vs. benefit in the pay-per-click model. A company can control exactly how many people engage with an ad by setting a maximum number of paid clicks and then simply track how many of those people were converted to a sale. By using an equation involving number of paid clicks, cost per click, average sale price, and frequency of customer conversion, calculating ROI with pay-per-click is simple arithmetic.

Search engines like Google and Bing are some of the most prolific providers of PPC space (See also Search Marketing). Instead of placing their ads on specific websites where they believe they will find customers, advertisers enter into deals with search engine platforms. That advertiser's website appears higher in search engine results, allowing a smaller company to boost their visability in the absense of traditional search engine optimization methods.

For example, a car company that wants to market its 2012 pickup truck could pay Google to insert an advertising link to the car company's website whenever a user types terms like “pickup truck” and “new truck 2012” into the Google search bar.

Who Uses Pay-per-click Marketing?

Today, pay-per-click marketing is commonly used by a variety of businesses and organizations ranging from smaller companies selling goods, to political campaigns hoping to raise awareness about an issues.

Business owners are attracted to pay-per-click marketing because it can be highly effective at a low cost. PPC allows a business to reach people who are likely to already be interested in what the business sells, because many PPC advertisements only appear on websites and search engine results pages that are related to the product.

Joy for Page & Moy

In 2011, the UK-based travel industry company Page & Moy Travel Group overhauled its marketing plan, including a significant application of pay-per-click strategies. Their marketing consultants at a company called Receptional created a new plan that greatly improved P&M's profits.

They increased exposure through a massive expansion of keyword lists, databases from ad placement areas like Google search pages were updated daily, and the number of PPC campaigns rose to capture new target demographics. After a year of smart, revised PPC campaigns, Page & Moy's booking rate more than doubled, their cost per customer dropped 12%, and their return on investment increased 18%.

For political campaigns or other awareness-raising efforts, pay-per-click can also be a cost-effective way to reach likely stakeholders. If a campaign to create no-leash areas for dog owners in the city of Denver wanted to use PPC to raise awareness about the issue or even encourage donations, it could use Bing to place an ad link on search results pages generated by keywords about Denver, dogs, and no-leash areas.

Implementing a Pay-per-click Campaign

Depending on its structure, a pay-per-click marketing campaign can be a very frugal or a very expensive form of advertising. An organization that has never used PPC before should start with a small campaign on a limited budget, and then expand the scope of the next campaign based on lessons learned from the first foray.

Before signing up with a pay-per-click service and spending any money, an advertiser should identify who the ad will target and where it will be most effective. Marketers usually first use web analytics software to track web traffic, determining the best location for the advertisement (See also Behavioral Marketing).

Because of the pervasiveness of PPC, some services, especially those on major search engines, can be highly competitive. A small, local taco restaurant, for instance, should think twice about getting into a bidding war with Taco Bell over premium pay-per-click ad space on Google.

Who Controls the PPC Market?

Pay-per-click ad space in search engines is the most popular in the field. Here's how much of the market the major search engines of the world each control in August of 2012.

Many modern pay-per-click packages are very flexible, allowing advertisers to set a limited budget for each day, week, or month, as well as allowing advertisers to freeze the service upon request. An advertiser can allot a monthly PPC ad budget of a certain amount, like $600, and then ask the ad space provider to take down the ad once the number of clicks reaches that limit. This is not only a great way to keep simple financial records during the marketing campaign; it is also an excellent way to control just how many people visit the company website. Such control allows for very straightforward analytics and manageable customer interactions.

Pay-per-click marketing works best as short campaigns, usually ranging from one to three months. The advertiser should analyze the effectiveness of each campaign and then adjust keywords, placement, and budget allocation to capitalize on the data from previous campaigns.

Careers with Pay-per-click Marketing

A good pay-per-click campaign involves every member of a marketing team, combining the expertise of technical and creative positions. These are just a few examples of the many career tracks involved with PPC strategies.

Data Analyst

The proper placement of a pay-per-click ad and the effectiveness of that ad once placed are determined by the analysis of things like site traffic and web page evaluation. Data analysts use software and other technical skills to perform these calculations and make recommendations based on them.

Education/Experience

PPC Career Salaries

  • Data Analyst
    Entry Level: $33,350
    Median: $60,570
    Top Earners: $111,440
  • Web Designer
    Entry Level: $47,000
    Median: $62,000
    Highest Earners: $80,000
  • Content Specialist
    Entry Level: $35,000-$40,000
    Median: $54,000
    Highest Earners: $72,000

Source: Salary.com, Bureau of Labor Statistics

A career in data analysis begins with a bachelor's degree in marketing, math, computer science, or business. It requires high computer literacy and the ability to communicate complex technical concepts in simple, non-technical ways. Previous experience in systems administration or database management can be helpful as well.

Web Designer

Internet users often experience pay-per-click advertising through images like banner ads or through text-based links. Both will lead to the advertiser's website. A web designer uses skills in computer programming and visual presentation to make visual ads appealing and ensure potential customers have a good understanding of what their options are once they reach a product website.

Education/Experience

Web designers should have a bachelor's degree in marketing, design, or computer science. Because web design positions require the creation of professional-quality visual materials, a portfolio of past designs can greatly increase the appeal of an aspiring designer's resume.

Content Specialist

While web designers concentrate on the visual and structural elements of the marketing materials connected to a pay-per-click campaign, content specialists engineer the overall message of the product. They write the text of ad materials and develop the tone of the company brand for each campaign.

Education/Experience

Content specialists should have a bachelor's degree in marketing, business, English, or communications. A background in copywriting and search engine optimization is very helpful. As with web design, content specialist resumes greatly benefit from the inclusion of work samples.

Learning Pay-per-click Marketing Strategies

In today's Internet-dominated business world, marketing education programs now include instruction in Internet advertising, which involves many elements of a pay-per-click strategy (See also Web Marketing). This includes training with software like Adobe InDesign and Dreamweaver for web design, and to customer relationship programs such as SalesForce and analytics software from industry leaders like SAS. Aspiring content specialists will learn the core principles of brand management and the most up-to-date wisdom on keyword usage.

Marketing education classes open up many other great careers with a curriculum that covers other important spheres of knowledge. Tomorrow's managers will benefit from studies in the best practices of business administration and finance, while those interested in brand development study customer psychology and social trends.

Marketing programs are very hands-on learning experiences. They use texts written by contemporary marketing experts, case studies of real-world marketing campaigns, and student-run simulations to prepare tomorrow's marketing professionals for careers in fast-paced work environments. The Internet has resulted in a vast array of new marketing systems like pay-per-click, so those who enter the work force with a thorough education in these systems have a great advantage over those who are stuck learning on the job.

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