The main disadvantages of paid search that need to be managed for success are:
- 1. Competition. Since Pay Per Click has become popular due to its effectiveness, it is competitive and because it is based on competitive bids it can get expensive. CPC/bid inflation has led to some companies reducing PPC activity. Some companies may get involved in bidding wars that drive bids up to an unacceptable-level “some phrases such as ‘life insurance’ may exceed £10 per click.
- 2. Higher costs than other media. If SEO is effective it will almost always deliver a lower CPC.
- 3. Favours larger brands. For companies with a lower budget or a narrower range of products on which to increase lifetime value it may be not possible to compete. In the past large players have got deals on their media spend through their agencies through, for example, Google Best Practice Funding.
- 4. Complexity of managing large campaigns. PPC is deceptively simple to setup. But to compete effectively, particularly for a large campaign, requires knowledge of best practice which changes as Google and other engines introduce new facilities – see the official update blogs from the search networks to gain an idea.
- 5. Limited reach. Not all searchers will see your ads, since the majority scan and click on the natural listings. Your ad will only reach those who are proactively looking for a product or service, but not those who are unaware of a need. Here display advertising can be used, but the paid search content networks can help here.
- 6. Click fraud. Common in some sectors where competitors or advertisers click on ads when there is no intention to buy.
Paid search marketing (PPC) definition
Although many searchers prefer to click on the natural listings, sufficient numbers do click on the paid listings (typically around a quarter or a third of all clicks). So with careful control, Adwords can drive quality traffic for which you get a good return.
Although many searchers prefer to click on the natural listings, sufficient numbers do click on the paid listings (typically around a quarter or a third of all clicks). So they can drive traffic.
The main benefits of using paid search marketing in Google Adwords is that it gives you:
- 1. Great targeting. You can reach your target audience when they are looking for products, i.e. high purchase intent.
- 2. Low wastage. With the right match types in Google Adwords, use of phrase match, exact match or broad match in combination with negative keywords, you can ensure that your ads are only shown when searchers are searching for relevant products.
- 3. Predictability. Traffic volumes, ranking, returns and costs tend to more stable and more predictable than SEO.
- 4. Speed. PPC listings appear much faster, usually in a few hours (or days if editor review is required). SEO has a much longer lead time, particularly important when new sites are created (the Google sandbox effect) or when ads need to be switched on and off for a campaign, promotion or stock changes.
- 5. Control. Unlike SEO (with sufficient budget and staff or agency with good PPC skills) it is more straightforward to achieve high ranking and direct visitors to the relevant page on your site. With the right technology, and that means a bid management system, creative / copy and budgeting can be tightly controlled.
- 6. High conversion rates. Following on from 1, PPC tends to have the higher conversion rates than SEO and much higher than display ads where viewers of the ads may click more on impulse.
- 7. Branding effect. Tests by the IAB have shown that there is a branding effect with Pay Per Click, even if users do not click on the ad. This can be useful for generating brand awareness during the launch of products or major campaigns.