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Pay-Per-Click Pays Back Big for Local Business Marketing Efforts

By Ricardy Banks

The rush of local advertisers staking their claim to the top paid advertising spots on the search engines, networks and local online directories surprised Gordon Borrell, president and chief executive of market research firm Borrell Associates. His firm’s research shows that US companies who operate strictly on a local level will spend $3.9 billion dollars for online advertising in 2005. That’s roughly double what they had predicted for the year and well above the 28.4% growth they reported for 2004.

Borrell’s numbers are conservative however, when compared to the United Kingdom (UK) spending numbers released by the Interactive Advertising Bureau. .

They showed spending overall on online advertising to be up more than 60% in 2004 over 2003. Paid Search Advertising accounted for 39.5% of that figure and was itself up more than 87% over the previous year.

"We've always viewed local advertisers as fairly conservative in that they don't have that much to spend," Borrell told Clickz Network reporter Rob McGann. "Typically you expect them to funnel most of their ad spend into direct mail and yellow pages, with only a small percentage for online, but that is not the case at all this year.”

WSI Internet Consultant Ron Adelman wasn’t surprised at all. He believes that local advertisers are behaving conservatively when they choose to participate in paid online advertising. In fact, he says 80% of these local business people jump at the chance to do Pay-Per-Click (PPC) campaigns when he shows them how many people locally are searching on keywords related to their business. He also reports that every single one of his current clients is engaged in some level of PPC ad campaign, targeting either a local, national, or international audience.

“Pay-Per-Click is the best way for any company to reduce their advertising risk. Because even if your campaign isn’t that good, you only pay when you get results – when you get someone to click through to your site” he shares.

The other risk Adelman believes these businesses are reducing is the overall financial risk posed by the high bid prices many generic but popular search terms can pose. Very competitive keywords like “mortgages” or “Web design” could easily command a bid price of $10, $15, or even $30 per click. However, when you add a regional term such as “St. Louis” or “London” to the keyword “mortgages” and use a tool like Overture or Wordtracker you’ll see that the number of searches done on that phrase may be dramatically lower – 30 - 40 searches as opposed to 4,000 to 400,000. Through effective keyword research a business can identify more specific keywords which cost substantially less, oftentimes just pennies a click.

One of the major benefits of running a local PPC campaign is that it provides flexibility in reaching local customers within a given geographic area. For example, a florist operating in Edinburgh, Scotland can set-up their ad so that it only appears to users within the Greater Edinburgh area.

'Few industry experts recommend that a small or medium sized business attempt to track their own campaigns and results.'

Adelman reports his typical clients happily spend between $300 and $1,000 USD on their clicks each month. His St. Louis, Illinois WSI office charges a very affordable fee to set up PPC campaigns and manage them each month on behalf of their clients. Adelman and his team provide the expertise and careful management that each PPC campaign requires making sure clients get the optimal return for their PPC advertising investment.

While the major search engines themselves offer advertisers a variety of free tools to help them manage and track the results of their PPC campaigns, few industry experts recommend that a small or medium sized business attempt to track their own campaigns and results. They note that while most can track which keywords convert the best, many do not look deeper into their numbers to know whether what they are doing is at the best possible price.

Management of a PPC campaign goes beyond setting up an account, keyword research, writing ads and setting a daily advertising budget. It also entails measuring your results and tweaking your ads and placements to improve on those results. Tracking which words convert the best is only the first step across the surface data available. Which search engines or networks return the best conversion results for each keyword, or whether they’re doing so in your targeted cost range are just two more of the many other variables you’ll want to keep an eye on. You’ll also need to know, and use, your average cost-per-sales, average customer acquisition costs, and average lifetime customer value calculation to determine the actual Return on Investment for each phrase, ad, campaign, engine, search network, or local search directory used.

While managing a successful ongoing PPC campaign can be extremely tedious and time consuming, even a poorly run campaign can begin to increase a company’s search visibility within days or hours.

“I can literally walk in to any business with a document in my hand that shows them how many people searched for their type of business, product or service online last month, and say the one thing that every businessman wants to hear – I can guarantee to put them on top of all those searches within hours of launching a brand new website. I can guarantee that they will be found” exclaims Adelman.


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About The Author

Ricardy Banks is a Certified Internet Consultant with WSI Internet Consulting & Education with over 20 years of experience in the IT industry.

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Last Update: 06-Apr-2009

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