What is pay per click seo

pay-per-click fundamentals and how does pay per click work on facebook
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Published Date:02-08-2017
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05_754943 ch01.qxp 12/28/05 7:09 PM Page 9 Introducing Pay Per Click Advertising In This Chapter  Understanding what sets Pay Per Click (PPC) advertising apart  Understanding how PPC ads work  Learning the ins and outs of PPC ads  Avoiding PPC tunnel vision f you’re reading this book, you’ve heard the hype about PPC. Pay Per Click Iadvertising is many things to many people. To some, it’s a tremendously effective way to push people to a Web site and sell products to them; to others, it’s a great way to lose money. To some, it’s a tool into which to pour millions of dollars for brand advertising; to others, it’s a huge disappointment. Which side of the line you sit on — the side of success or the side of failure — and how close to the line you sit, depends on a number of factors. Some of those factors are under your control, and some are not, but the intention of this book is to give you a good understanding of those factors and the best chance of landing on the money-making side of the line. Let’s begin at the beginning. In this chapter, you find out what PPC is all about and why some people swear by it, while others swear at it The Days before PPC Not so long ago, Internet advertising came in a couple of basic flavors. The first was very similar to print advertising. You paid someone to put some kind of advertisement on a Web site — typically what’s known as a banner ad (you can see an example in Figure 1-1). The ad sat on the site for the specified period — a week, a month, a year — and if you were lucky, people clicked the ad and came to your Web site. You were paying for an ad placement. www.taq.ir05_754943 ch01.qxp 12/28/05 7:09 PM Page 10 Part I: Preparing for Your Campaign 10 Banner ad Figure 1-1: Old school . . . the “banner ad.” Soon, a slight refinement to this model appeared. The main problem with the ad-placement model was that you didn’t really know what you were getting for your money. Sure, the ad would sit on the site for, say, a year, but what did that mean? Would a million people see it? Or a thousand? In many cases, all you had to go by was a vague promise from the site owner — “we get a mil- lion visitors a year,” for instance. Does that mean the page on which the ad sat would be seen a million times? Probably not. Worse, the promise might have been something like “we get a million hits a year.” What’s a hit? Ah, you think you know, but you probably don’t. The term hit has come to mean just about nothing. People say hit when they mean visit, and sometimes say hit when they mean hit but hope you’ll think they mean visit. Want to know what a hit actually is? A hit is a Web server request. When someone clicks a link leading to a page, the browser requests the page from the Web server; that’s the first hit. If the page has five images in it, those images have to be sent to the browser, too. That’s five more hits. If the visitor clicks a link and requests another page, that’s another hit, plus the images or other components inside the page. A hit www.taq.ir05_754943 ch01.qxp 12/28/05 7:09 PM Page 11 Chapter 1: Introducing Pay Per Click Advertising 11 might even be an error message, when a browser requests a page that no longer exists. So, the next time someone tells you that his site gets, say, 100,000 hits a month, ask him what that means. Is that 100,000 visitors? Almost certainly not, unless he is misusing the term hits and really meant to say visitors. Does it mean 50,000 visitors? 10,000? Who knows? Anyway, back to the story. If you put an ad on a site and pay for a month or year, what do you get? That’s right, no one knows what you get. So a second mechanism was developed — ads were sold by the ad impression. You would pay for the ad to be displayed a particular number of times. Ads were typi- cally sold in blocks of 1,000 impressions; they were priced by CPM. CPM means cost per thousand (no, not per million; M is the Roman numeral for 1,000). If you pay, say, a CPM of 35, that means your 35 buys you 1,000 ad “impressions” — the ad will be loaded into Web pages 1,000 times. Each time an ad appears, it costs you 3.5 cents. Hmm, still a few problems here. Just because your ad is loaded into a browser 1,000 times doesn’t mean the people viewing the pages actually saw the ad. What if the ad was “below the fold,” so far down the page that it wasn’t visible without scrolling down? Sure, it was loaded into the page, and if the visitor scrolled down he would see it. But if he didn’t scroll down, he wouldn’t. And so what if the ad was actually seen 1,000 times; will someone actually click it? And if people do click, how often will they click? In general, not very often, somewhere near 1percent of the time (and often way below that level). And that’s where PPC comes in. Understanding PPC: What It Is and Why You Should Care With PPC, you’re not paying for a promise, and you’re not paying to load an ad onto a page. You’re paying for an actual result, a click. With PPC, you don’t pay if nobody sees your ad, and you don’t even pay if someone does see it but doesn’t click. You pay only when someone clicks your ad. In the business, people talk about buying clicks because that’s just what they (and you) are doing. You’re paying a PPC company each time someone clicks a link pointing to your Web site. www.taq.ir05_754943 ch01.qxp 12/28/05 7:09 PM Page 12 Part I: Preparing for Your Campaign 12 Now, I wouldn’t go so far as to say you’re paying for a lead . . . you’re not. Some PPC companies have taken to referring to each click as a lead, but that’s just hype. (A lead in sales-talk is someone who has expressed an inter- est in your product or service. No sales professional would regard the visitor, at this click stage, as having expressed enough interest to have risen to the level of being a sales lead.) Nonetheless, you are paying for a particular action. Someone sees your ad, clicks the ad, and (in general) views your site. Certainly, now and then, people won’t arrive at your site — they may click and then cancel before your page fully loads — but generally speaking, a click is the same as a visit. It could be a very short visit, true, but it’s something a bit more tangible than a placement or an impression. Why isn’t a click the same as a lead? Compare Internet advertising with direct mail. Imagine, for a moment, a direct-mail campaign that is intended to get someone to call your company. You mail a letter, someone opens the letter, reads the letter and, you hope, picks up the phone and calls you. When the person calls, the person becomes a sales lead. Most people who open the letter won’t call, though. So you can’t call the letter a lead, and you can’t call someone opening the letter a lead. Displaying a PPC ad is the equivalent of sending the letter; and a click on the PPC ad is the equivalent of having some- one open your letter. It’s a step in the right direction, but it’s most certainly not a lead. PPC, 1-2-3 To make quite sure I’m explaining the concept of PPC adequately, let me just take you through the process of how PPC works, step by step: 1. The advertiser joins a search engine’s PPC program and “loads” the account with some money — say, 50 (though some companies’ PPC budgets are in the hundreds of thousands, even millions, of dollars a month). 2. The advertiser creates a small text ad (in some cases, PPC can include images, but I describe the most common form here). 3. The advertiser specifies with which keywords the ad should be associated. 4. The advertiser specifies how much he’s willing to pay each time some- one clicks on the ad. 5. Later, someone arrives at the search engine, enters one of the keywords or keyword phrases specified, and clicks the Search button. 6. The search engine finds the matching ads and places them on the results page. 7. If the searcher clicks the ad, he is taken to the advertiser’s Web site, and the advertiser is charged for the click. www.taq.ir05_754943 ch01.qxp 12/28/05 7:09 PM Page 13 Chapter 1: Introducing Pay Per Click Advertising 13 PPC pulls the banner down By the end of 2000, when the Internet bubble burst, banner advertising had acquired a really bad reputation. Billions of dollars had been spent on banner advertising, and most of it was wasted. Click-through rates — the proportion of ads that are clicked upon — for banner ads were very low, and many advertisers, perhaps most, spent more on the ads than they made on any sales derived from them. Banner ads had several problems:  They were expensive. Although CPMs were typically 35–50, because only one ad impression in 200 resulted in a click, that often translated into a price of 7–10 per click.  They had low click-through rates (the ratio of ad impression to actual clicks on the ad), which made them expensive. People were sick of seeing them, so they learned to just ignore them.  Conversion rates were low. That is, only a small percentage of the people who clicked a banner and arrived at a site actually bought anything.  They were in the wrong places. Ads were often placed in front of people who simply wouldn’t be interested in the offer, which meant people didn’t click them much. Which brings me to another critically important characteristic of PPC ads as opposed to the majority of banner ads — PPC ads are, often, placed in the right place, while most banner ads were in the wrong place. As you discover in this book, there are lots of different types of pay per click advertising, but the concept really took off when it was incorporated into search engines, and search engines’ results pages are the right place to put your ads. The first big move in PPC search advertising was made by GoTo.com, a com- pany founded by Bill Gross’ IdeaLab. (IdeaLab has had a huge effect on the Internet, from eToys to CitySearch, NetZero to PETsMART.) In the summer of 1998 the company began selling ad “bids” on the GoTo search engine; you’ll learn more about bidding in a moment. The company changed its name to Overture, went public, began a partnership with Yahoo and late in 2003 was purchased by Yahoo. (Yahoo is now in the process of re-branding Overture, calling it Yahoo Search Marketing.) By the way, in the early days this form of advertising was often known as CPC — Cost Per Click (but I’ll be sticking to the form that’s more common these days, PPC, in this book). Here’s the basic concept of PPC advertising: Rather than placing banner ads on various destination and content Web sites, when you buy PPC ads, most www.taq.ir05_754943 ch01.qxp 12/28/05 7:09 PM Page 14 Part I: Preparing for Your Campaign 14 are placed in search results. If you’ve searched on the major search engines — Google and Yahoo, and MSN — and most smaller search systems, too, you’ve seen them: small ads that appear above and alongside the search results. In fact, the search results page contains two types of search result, as you can see in Figure 1-2. Organic search results PPC ads Figure 1-2: Most PPC ads are placed into search results on the major search engines. As you can see in Figure 1-2, I searched on the term diving gear on Google; the words I’m searching on — diving gear — are known as the search term, search query, or search keywords. Figure 1-2 shows what’s known as the search-results page; Google takes my search term and returns information that it feels matches my search term most closely. You see two types of results in this page. The main area of the results contains organic search results. These are not ads; they are simply pages that Google found in its vast index of the Web (over 8 billion pages at the time of writing), pages that it thinks are the best matches for the search keywords I entered. At the top, and along the side, are sponsored links. These are the PPC ads. How do you get your pages to sit at the top of the organic search results? This book is about PPC advertising; however you might want to read the “partner” book to this volume, Search Engine Optimization For Dummies for all the details on ranking well in the non-paid search results. (See www.Get SEOBook.com.) www.taq.ir05_754943 ch01.qxp 12/28/05 7:09 PM Page 15 Chapter 1: Introducing Pay Per Click Advertising 15 One major search engine sometimes mixes organic and sponsored results — Yahoo. At the time of writing, Yahoo is the only major search engine that has a trusted-feed program, which you find out about in Chapter 14. In some cases, what appear to be organic search results are actually trusted-feed PPC ads, with no indication to the searcher that this is the case The power of search advertising PPC ads on search engines are likely to be much more effective than banner ads. Why?  People are searching for something when they see your ad. Banner ads are often placed onto what may be termed content sites, as opposed to search sites. On content sites, people are looking at information, rather than for information. In most cases, banner ads lead people away from the task at hand; PPC ads are designed to help people with the task at hand — looking for information.  Ads are delivered based on what people search for, so there’s a very good chance that if someone clicks your ad, he or she is interested in what you’re selling or promoting.  The ads are unobtrusive and not gimmicky. The major PPC systems have guidelines to stop the use of tricks and gimmicks. Again, if some- one clicks, he or she is probably interested. All in all, PPC ads on search sites are generally more effective than banner ads on non-search sites, in the same way that Yellow Pages ads are often more effective than newspaper ads. When people see your ad for, say, a shoe store in the Yellow Pages, chances are they’re looking for a shoe store. When they see your shoe-store ad in a newspaper, they may just be reading the news. Having said all that, it’s important to understand that sometimes PPC ads are not placed in search results — they are sometimes placed on content sites (that’s a choice made by the advertiser). You can see an example of a PPC ad on a content site in Figure 1-3. (I’m going to use the term content match for this type of ad, which is actually the term used by Yahoo — other PPC sys- tems use different terms. One common term you’ll hear is contextual advertis- ing, though that term is a little ambiguous in some ways.) Right now, Google is the big player in the content-match game, but other PPC systems also do it. Google’s big in the content-match business because, through its AdSense pro- gram, it makes it very easy for almost any site owner to run PPC ads on his or her Web sites. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 16 Part I: Preparing for Your Campaign 16 Figure 1-3: Some PPC ads are placed into “content” pages on non-search Web sites. Google AdSense PPC ads It’s also important to understand that these types of ads are likely to be less effective (and, therefore, more expensive from a results standpoint) than the ads in search results. I recommend that when you start your PPC advertising, you turn off content-match ads (you’ll see how in the chapters on Google and Yahoo) to increase your chances of success, or at the very least, track them separately so you’ll know the true picture (I cover tracking in Chapter 15); if your PPC campaign is a total failure, you may find the content-match ads pulling down the average while the regular search-match ads work okay. I cover this in more detail later, in Chapter 13. Oh, and there’s another reason to avoid content-match advertising; click fraud, a subject you find out about in Chapter 17. Content-match ads are prime targets for fraudulent clicking, so avoiding that form of advertising may reduce your exposure. By the way, there’s no reason that a PPC ad can’t be a “banner” ad. They can, and sometimes are. But at present, most PPC ads are the small text ads I’ve shown you here. You pick your placement Here’s another important PPC concept — you get to pick where your ads are placed by associating your ads with various keywords. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 17 Chapter 1: Introducing Pay Per Click Advertising 17 In the past, with banner ads, you would place ads on a specific Web site or work with an ad network to place ads on a particular type of Web site. If you sold sports paraphernalia, for instance, you would place your ads on sports- related sites. With PPC, though, you can get much more targeted than this. Rather than just placing an ad on a site related to sports, you can now display your ad to someone who has clearly stated that she has some kind of interest in . . . some keyword. When someone searches on nfl memorabilia, for instance, your ad may appear. You get to state, in very specific terms, when your ad appears. More specifically, each ad you create can be combined with one or more key- word search phrases. You might have 30 different ads with 30 different groups of keywords. When a keyword in group one is typed into a search engine by a searcher, the associated ad is displayed; when a keyword phrase from group two is typed, the associated ad for that group is displayed, and so on. Again, having said that, content-match ads are not quite as precise as regular search-result ads. Remember, with content-match ads, nobody’s typing a search phrase into the page; rather, the ads are simply displayed when a page is opened in a browser. So the PPC systems try to match your chosen key- words with the text in the Web page. Sometimes they do well; sometimes they don’t. In general, PPC advertisers seem to agree: The PPC traffic you get through content matches are not as good as the traffic from searches. You bid for position PPC ads vary greatly in price. On the major PPC systems, you’ll pay anywhere from a minimum of 1 to 10 cents per click (Google’s and Yahoo’s minimum bids, respectively) to many dollars per click: 20, 50, 75, perhaps more. But rather than negotiating with the company selling the ads, you compete with other people who want to display ads at the same time you want to display an ad. Here’s an example: Imagine that you want to display an ad when someone searches on the term mesothelioma at Yahoo (Mesothelioma is a disease caused by breathing in asbestos fibers.) You’re not alone. Many other people want their ads to appear at the same time. Of course, everyone wants his or her ad to display at the top, so how does Yahoo determine which goes first? By how much each advertiser bids. You can see a list of bids in Figure 1-4; these are bids on the Yahoo Search Marketing system for the term mesothelioma. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 18 Part I: Preparing for Your Campaign 18 Figure 1-4: A list of bids on Yahoo Search Marketing. You find out about this bid tool in Chapter 7. On Yahoo, the minimum bid is 10 cents per click, so the first advertiser to select this keyword phrase selected 10 cents. Another advertiser may have come in and tried to get a better position by placing a bid of 11 cents a click. Then another might have tried to beat that position, with a bid of 12 cents, and so on. So, with the most basic of bidding schemes, you see a bid struc- ture like this: Top Bidder 14 cents 2 Bidder 13 cents 3 Bidder 12 cents 4 Bidder 11 cents 5 Bidder 10 cents Of course, bidding gets far more complicated than this. Bidders, as in any kind of auction, try to beat the competition. Bidder 5, for instance, may be determined to get the top spot, so he outbids the Top Bidder, as do 2 and 3, perhaps. Prices rise until people stop trying to keep up with the top bids. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 19 Chapter 1: Introducing Pay Per Click Advertising 19 In fact, the top bid for mesothelioma on Yahoo, at the time of writing, was 39.41 (as you can see in Figure 1-4). I’ve seen the price well over 50, though, and I’ve been told it went far higher than this at one point. When you bid on a keyword, you’re saying, “This is the maximum amount I’m willing to pay when somebody clicks my ad.” If you bid 12, that means if someone clicks on the ad, you may end up paying the PPC service 12. So make sure a click is really worth 12 A PPC bid is a little different from the normal auction-type bid, however. While a bid in an auction is what you’ll pay if you have the top bid, a bid in PPC advertising is what you’re willing to pay, if necessary. But you generally won’t pay more than one penny above the next lowest bid for the top posi- tion. For instance, look at this situation: Top Bidder 20.00 2 Bidder 12.00 In this case, the Top Bidder pays 12.01 per click, not 20. Bidding 20 allows the Top Bidder to hold the top position. In order for 2 to take the top posi- tion, he’ll have to bid at least 20.01, but then he will have to pay 20.01 per click But as long as Top Bidder is bidding more than anyone else, he pays only a penny more per click then the second-highest bid. This is the case in most major PPC systems these days. It wasn’t this way in the early days, when you paid what you bid, but in order to encourage more advertising and more bidding, the engines came up with this system in which you place a maximum bid but pay only a penny above the guy below you. However, some smaller PPC systems may still use the old system. Google handles bidding a little differently. The top bidder does not necessar- ily get the top spot. Rather, the bid is just one criterion, and ad position is also dependent on how well the ad performs. Ads that get clicked often get a “bonus” and may actually be displayed higher than ads that are being charged more per click. (I discuss this in more detail in Chapter 9.) You have total control As you discover in this book, PPC systems provide a great deal of control over how and when your ad is placed. You can control characteristics, such as these:  You can set the maximum you’re willing to pay for a click.  You can specify the maximum you’re willing to spend on your ads each day, week, or month.  You decide which keyword or keywords “trigger” the ad — from a single keyword to thousands of keywords. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 20 Part I: Preparing for Your Campaign 20  You control the ad wording — you can change wording from minute to minute if you really want to.  You can associate different ads with different keywords or keyword groups.  You can specify exactly how keywords work — if you select shoes, will the ad appear if someone searches on shoe? What about shoes in denver?  You can specify, to some degree, where the ad appears — will the ad appear if the person searching is in Denver? In Chicago? In California? In Germany? The degree of control allows you to tweak your advertising campaign. As you see in Chapter 15, you can track the effects of your ads — not only can you see how much each click costs and how many people click an ad, you can even see what people do when they come to your site. You can track how many of the people who click the ad actually buy, fill in an information- request form, or take some other kind of action. Some ad texts may work better than others. You can experiment by combining different keyword choices with different ads. This information allows you to optimize your advertising by pinpointing which keyword/ad pairs get you the best results. Is Everyone Making Money with PPC? No. Why use PPC if you’re losing money? As bizarre as it may seem, many PPC advertisers are losing money on their ads. How can that be possible? The following are real quotes from real com- panies using PPC, explaining why they use PPC despite the fact that the PPC campaigns are losing money:  “I know we’re losing money on PPC, but I’m under pressure to provide leads.”  “Well, we’re not really sure if we’re making money on PPC or not.” (They weren’t.)  “We experimented with PPC last Christmas . . . sure, we lost money, but we’ll probably try again this Christmas, too.” www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 21 Chapter 1: Introducing Pay Per Click Advertising 21  “It doesn’t really matter if we make money directly; this is ‘brand’ adver- tising.” (I talk about brand advertising in Chapter 3. Suffice it to say that brand advertising is often — perhaps usually — a good way to lose money.)  “No, we’re not making money right now, but we will just as soon as we improve our conversions.” (The term conversions refers to the process of converting visitors to customers, and the last time I spoke to these guys, they were still a long way from fixing this problem.) The fact is, despite the hype — to some degree because of the hype — many people working with PPC are losing money doing so. Some are in the process of finding out if PPC works for them and either will stop when the pain gets too great or will experiment and figure out a way to make it work. Others have a much higher pain threshold and are willing to lose large sums of money because they’re caught up in the hype and know that PPC must work, if they can just figure out how Or they really don’t care much either way; PPC costs are just a small part of a large marketing budget. Sometimes, spending money on PPC and taking a loss can make sense. PPC can be used to test your site and to test keywords very quickly. You can turn on a PPC campaign, watch for a day or two, and get a feel for how things are going — what people do on your site, how well the site converts visitors to buyers (see Chapter 5), the difference between people who had searched on keyword A and keyword B, and so on. PPC can be used as a clearly measur- able system for testing and improving what happens on your site and for picking keywords (see Chapter 4). Now, just because PPC hasn’t worked for you doesn’t mean you should stop and never try again. But if you do try again, there has to be a good reason. As a good friend, Joe Sabah, likes to say: “If you do what you’ve always done, you’ll get what you’ve always gotten.” If PPC fails, you’d better figure out why and do something to resolve the problem, rather than just banging your head against the same wall (you find out more about making your PPC campaigns more efficient throughout the book). Reality is, PPC might work, and it might not. In Chapter 3 you’ll learn whether or not it’s likely to work for you. But the ultimate test is, of course, to try it. But be realistic, and test carefully. Most advertising doesn’t work Remember also that most advertising doesn’t make money. “I know half the money I spend on advertising is wasted,” said Chicago department store www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 22 Part I: Preparing for Your Campaign 22 owner John Wanamaker more than 100 years ago, “but I can never find out which half.” There’s an adage in the advertising — wait, no, not in the advertising busi- ness, because the adage is not exactly good for the business — that goes, “most advertising doesn’t work.” I don’t remember who said it . . . oh, wait, it was me. Anyway, it’s true, and it’s worth understanding up front if you’ve never pur- chased advertising before. If you have purchased advertising for a large busi- ness, you may not believe this; many large business spend a fortune on advertising that doesn’t work, because nobody has actually proven that it doesn’t work. But having worked with small-business people over the last 15 years, I’ve learned that many small-biz people do understand this concept. Here’s how we know most advertising doesn’t work . . . because if it did, busi- ness would be easy Need customers? Just advertise for them Need some more? Advertise some more. Most of the money you spend will make you money, and the longer you do it, the better you do, as you eliminate the minority of advertising that doesn’t work. Reality is very different. Most advertising doesn’t work, so business is a battle, and most businesses, business experts tell us, fail in the first few years. So can you make money with PPC? The answer to the above question depends on what you mean. If you mean can one make money with PPC?, then the answer is, “Absolutely” One can, if one happens to have the right product, the right Web site, the right ad, and the knowledge you find in this book. If you mean can I make money with PPC?, the answer is a definite “Maybe” I don’t know what you’re selling, what your Web site looks like, and whether you can put together the right ad, so I don’t know for sure. But some people definitely are making money with PPC; perhaps you can, too. I’ve worked with companies doing well with PPC, and with those doing badly. If all the planets align, if you put all your ducks in a row, and if you figure out any other folksy mottos that may apply, you can make money with PPC. But as with every New Thing, there’s a lot of hype behind PPC. Just remember that the PPC companies are in the business of selling PPC ads, not of selling information about your chances of succeeding. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 23 Chapter 1: Introducing Pay Per Click Advertising 23 Why Bother Using PPC? So why bother with PPC? There are lots of ways to bring people to your Web site, after all. Here are a number of reasons why PPC might be the way to go:  You’re reaching people when they’re looking for you. The search engines are hugely popular, with more than half a billion searches every day (perhaps much more) These are great prospects for your business.  It’s fast. While most marketing methods can take a long time to get started, you can get a PPC campaign rolling very quickly, literally within an hour or so.  It’s a numbers game. It’s easy to measure success; count how much you spend, and how many sales you made.  It’s a great testing tool. As I mention earlier, even if you can’t make money with PPC, it can be a useful way to test your site and test keywords.  It allows you to market products temporarily. Seasonal goods, prod- ucts of which you have a small supply, and so on. Want to sell or pro- mote a product around Christmas or Easter, have decided to discontinue a product and want to get rid of it, or have a limited-time discount? PPC could help.  It’s a good brand advertising tool . . . oh, wait a minute. No, it’s not At least, not for most companies. Many writers and PPC pundits promote PPC as a great brand advertising tool. In Chapter 3, I explain why it gen- erally isn’t. If you use only PPC to market your product or service, you’re probably making a mistake. But PPC is often a very good first choice. Let’s compare with search-engine optimization, the practice of “optimizing” pages and links to make your Web pages rank well in the search engines. Search-engine optimization is complex — there’s a lot to learn. The work you have to do can sometimes be quite difficult. And it can be very time consum- ing, both in terms of time invested and the time you’ll have to wait for results. While it’s sometimes possible to see results in days, more commonly it can take weeks or months. (Did I mention my other book, Search Engine Optimization For Dummies?) On the other hand, PPC is quick and easy. When you know what you’re doing, you can begin a PPC campaign in an hour or so. www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 24 Part I: Preparing for Your Campaign 24 Many people use PPC to get things rolling. While they plan to use other forms of online marketing, they can use PPC to begin bringing people to their sites within minutes of the site launch and start making sales and testing their sites right away. PPC allows you to turn on a campaign immediately, and turn it off as soon as you’re finished with it. Placing Eggs in Several Baskets PPC is just one weapon in your marketing arsenal, just one wrench in the tool chest. You may discover that it’s incredibly important, a business builder; but don’t get tunnel vision and think PPC is the only way to go. You may find PPC is useful, but not enough. Or you may find that it’s simply not viable for your business. Either way, don’t focus on only PPC. Even if PPC works wonderfully for you, there are two very good reasons for trying other forms of marketing, too:  If there are other forms of online marketing that can make you money, why leave money on the table?  Just because PPC works for you today, doesn’t mean it will work tomorrow. I think it’s important to remember the second of these. There are a limited number of ads that can be placed, and two important trends at play: 1. The increase in the number of people using the Internet — and, thus, searching at the major search engines — is slowing down. 2. The increase in the number of businesses using PPC is ramping up. Pay Per Click fees have been increasing, as PPC becomes more popular. Most businesses — the vast majority — not only haven’t used PPC, they don’t even know what it is. Certainly the PPC companies are constantly looking for more places to put their ads, but it seems likely to me that as more people learn about PPC, and more get online and use them, the more expensive the clicks are likely to get. In fact even without an overall upward trend, your business could be hurt if competitors move in on your space. Here’s an example (a proverbial “off the top of my head” example). Let’s say you sell books about, um, rodent racing. Right now you could buy clicks very cheaply. It’s hard to believe, but you can place an ad on Yahoo when someone searches for rodent racing and pay only www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 25 Chapter 1: Introducing Pay Per Click Advertising 25 10 cents a click As strange as it sounds, nobody . . . not a single company, is currently bidding on that term. Anyway, imagine that you are placing ads whenever someone searches on the term rodent racing, and making a tidy little sum. But then, a series of nasty accidents during high-profile rodent races lead to a sudden interest in insur- ance for racing rodents (and their jockeys). Major insurance companies real- ize that there are huge profits to be made . . . and start bidding on PPC ads. Rates go up, 50 cents, a dollar, five dollars. And now, you’re out of business, because the click rates are so high you just can’t buy them. Many companies think that when they advertise through PPC, they are com- peting with, well, their competitors. But they’re not, they’re competing for ad space with other companies that are interested in the keywords. Look at Figure 1-5. I searched for the term campground, and five ads appeared. Figure 1-5: These PPC advertisers are not in direct competition with each other. The PPC ads are not directly competing with each other, as you can see below.  Camping.com — make campground reservations and buy camping gear  eBay.com — auctions of camping gear  MapQuest.com — maps www.taq.ir05_754943 ch01.qxp 12/28/05 7:10 PM Page 26 Part I: Preparing for Your Campaign 26  Cheap-Prices.co.uk — a British “affiliate” site with links to vacation services  GoodSamClub.com — the world’s largest RV owner’s association Not one of these sites directly competes with another. Now, the rodent-racing example earlier is rather unlikely — rodent racing is, in fact, a very safe sport — but this sort of thing does happen. If you’re selling a 25 book, you simply can’t afford to pay as much in click costs as a company selling, say, insurance policies or mortgages worth thousands of dollars over the life of the policy. Yet you may want to advertise under the same keywords. Oh well, that’s life. You have several choices:  Find keywords that the “big boys” aren’t targeting  Find PPC systems that the big boys aren’t using  Move on PPC won’t work for you So, let’s move on. We’ve talked enough in generalities, let’s look at the differ- ent places you can advertise using the PPC model. www.taq.ir06_754943 ch02.qxp 12/28/05 7:10 PM Page 27 Chapter 2 The Different Forms of PPC In This Chapter  The Tier-1, -2, and -3 PPC systems  Using geo-targeting and contextual systems  Paying for clicks from “natural” search results  Getting clicks on the shopping sites  The new PPC systems — Pay Per Call and Pay Per Action s I mention in the previous chapter, there’s more than one form of PPC Aad. There are quite a few, and more types enter the market all the time. In this chapter you take a quick look at where and how you can employ PPC advertising. The Big Two PPC Search Engines At the time of writing, the vast majority of all PPC advertising goes through just two large, tier-1 PPC systems, owned by the two most important search companies:  Google AdWords:http://AdWords.Google.com  Yahoo Search Marketing:http://SearchMarketing.Yahoo.com For now, there are two big systems. By the time you read this, there may be three. Microsoft is launching its MSN AdCenter advertising system. Within that overall system, Microsoft will have its own PPC service, MSN Keywords. Microsoft owns some of the world’s most popular Web sites. While Yahoo is the world’s most popular site, the number 2, number 3, and number 6 most popular sites are owned by Microsoft (the ranks shown below are provided by Alexa, an Amazon-owned company — www.Alexa.com): www.taq.ir06_754943 ch02.qxp 12/28/05 7:10 PM Page 28 Part I: Preparing for Your Campaign 28  Number 2: MSN.com  Number 3: Passport.net  Number 6: Microsoft.com Actually, until recently, this list was larger, but Microsoft has merged various sites; the domain Hotmail.com, for instance, now points to Passport.net, so it isn’t measured as a separate (but incredibly popular) site. In any case, my point is that Microsoft’s sites get a huge amount of traffic. Microsoft has a search engine, with its home on the MSN.com Web site, and Microsoft.com and Passport.net both use this system. This search engine has PPC ads, of course — it’s big business, too big for Microsoft to ignore. But at the time of writing, the PPC ads are provided by Yahoo’s Search Marketing PPC system. That’s all changing. Early in 2005, MSN announced that it was building its own PPC system (which was hard to hide, anyway, as people throughout the PPC business were getting calls from headhunters wanting to hire them to work for Microsoft). In the summer of 2005, MSN went live with its own PPC system — AdCenter — in France and Singapore. In the fall of 2005 it also launched an “invitation-only” service within the United States, open to large advertisers, and started mixing its own PPC ads in with the ones coming from Yahoo. Microsoft, today, owns one of the world’s three largest search systems. The change is that it will be running its own ads, not someone else’s, on its search- results pages. However, in the summer of 2005 Microsoft announced that it was renewing its PPC partnership with Yahoo and signed another contract taking it through to June 2006. So it’s close to 100 percent certain that by June 2006, MSN will be running its own PPC system, with full access for all advertisers. If you want to see if MSN’s system is fully open for business yet, visit this page: http://advertising.msn.com/msnadcenter/. So there you go, two big PPC systems, based on the Google, Yahoo, and a third on the way, MSN. And the vast majority of PPC ad placements and clicks go through those systems. By the way, all PPC systems are not equal. You may find that you do very well on Google but just can’t get PPC to work on Yahoo — or vice versa. In fact, that’s exactly the case for one company I recently spoke with. They’ve given up working with Yahoo because, although they can buy clicks, they just don’t seem to “convert” for them — that is, the visitors coming to them from Yahoo are less likely to buy from them. This may be a function of the type of products the company sells. The company believes that its prospects (the people who could be persuaded to buy from them) are more likely to use www.taq.ir