How bidding works and costs per click are set

As you may already be aware, PPC advertising works on the basis that every time someone clicks on your advert you pay an advertising fee. The cost of that fee is dependent on the competition of the key phrase you’re bidding on.
For example, if you would like to advertise for the key phrase ‘Home Insurance’ you’ll be forking out somewhere in the region of £16 for every click you receive. This cost is so high because the competition is fierce and from businesses that have extremely large Pay Per Click advertising budgets.
Because there are multiple bidders willing to bid highly for a click, the cost of that click is artificially pushed upwards, in line with the basic principles of supply and demand. Something is worth as much as someone is willing to pay for it.
Another example is the key phrase ‘web design Cornwall’. If a business was looking to compete for this phrase they would be budgeting somewhere between £2 – £4 per click. Again in this situation there are a variety of people advertising for it, but the costs they’re willing to budget for a click are much lower.

Where do you find the costs per click for your business?

If you have a Google account all you’ll need to do is Google ‘Adwords’.
Once in the system you’ll need to click on the Tools tab at the top of your screen and select the appropriate tool you’d like to use, depending on the information you’d like to gain, for example the volume of searches being made for certain key phrases or the levels of traffic you can expect.
Don’t worry, by signing up for Google Adwords or using their tools there is no obligation for you to spend any money or to advertise.
Now we know how a PPC cost is established and where you can find it lets work out if the cost stacks up.

Does the cost add up for your business?

There are a few things to consider when looking at PPC advertising on Google:
a) What is the cost of the click?
b) How many clicks does it take to convert to a paying customer?
c) What is the revenue per unit you would gain as a result of a converted click?
d) Is figure C sufficiently higher than A x B?
If the answer is yes then it is a viable option for you.
If the answer is no then on the face of it the sums don’t add up. This would mean that unless there are other reasons driving your advertising, such as competitive or loss leader activity you should evaluate your current advertising spend and weigh up if it would be better spent elsewhere.
For more information on how we can help you implement effective PPC campaigns as a local business please give us a call on 01566 784860 or email mark@mihidigital.co.uk

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New websites and businesses

If you’re a new business or website you’ll be the new kid on the block in a variety of ways.  Think of it from a search engine’s perspective; your competitor has been around for ten years, it’s a known quantity and yours is new.  It’s going to take time to understand what you’re about, to trust you and also to know you’re out there.
You’re simply not going to immediately compete with those more established websites.  There are ways you can reduce the time it takes but in the meantime PPC advertising can be a useful tool to give you visibility where Google isn’t yet ready.
This will be artificially putting your new business in front of new customers, which is what every new business wants and needs!

Capitalise while SEO work is coming to fruition

SEO (search engine optimisation) work takes time to have an impact and come to fruition.  This is because Google takes time to understand the changes and activity you’re undertaking and reflect on how that impacts where you should be ranking.
This can be one to three months in order for full results to be felt so during that time it may be prudent to also undertake PPC advertising, tapering off your expenditure as time goes by and your organic rankings increase.
This will give you greater visibility over a greater length of time.

You can’t rank for everything

Unfortunately no website can rank for absolutely every key phrase that counts.  If you try to rank for everything you’re more likely to begin ranking averagely across the board; think of this as being a Google Jack of all words, master of none.
You need to have focus and PPC advertising can fill in the gaps left by that focus.  In this circumstance you’ll end up ranking higher for certain key phrases and advertising for others.
Overall visibility will be increased.

You can’t conceivably rank for those phrases

Sometimes competition is too fierce to rank.  In these circumstances you’ll need to assess how much a click is worth and weigh that up against the expenditure you’ll need to exert in order to rank for the phases organically.
If you’re up against national players or others with big budgets PPC will sometimes be able to give you visibility that otherwise would be prohibitive to achieve.

Seasonal and tactical advantages

The Westcountry has a lot of industries that are affected by seasonal fluctuations in demand.  By advertising in peak and pre-peak periods you can give yourself a bigger slice of the pie and take advantage of that demand.  This can be particularly useful as a competitive activity.

Competitive activity

What are your competitors advertising? Search is competitive and you should always be monitoring what other people are doing.  Your activity should fall into two categories as a result of monitoring your competitors:
Reactive: Seeing what they’re doing and reacting to it in order to avoid them gaining competitive advantage.
Proactive: Seeing what they’re doing and moving into new areas of opportunity before they can.
No matter which of these methods your business is using ensure that you’re always keeping on top of your performance and analytics; don’t let it slip or you’ll be wasting budget that could be spent and utilised elsewhere.
For more information on how we can help you implement effective PPC campaigns as a local business please give us a call on 01566 784860 or email mark@mihidigital.co.uk

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This award winner was slightly different.

He had, as a creative professional in New York, found himself out of work. Having exhausted the local job boards and recruitment agencies he looked to find another solution to land his dream job.

He worked on the basis that of the top five agencies in New York, the creative directors of each all gained significant press coverage and it would be reasonable for him to expect that they would Google their own names on a frequent basis.

He was right.

He ran an ad campaign that appeared when each was Googling their own name, telling them to click a link and view his C.V.

Five interviews followed.

Three job offers.

One dream job.

One big reminder that creativity and standing out from the crowd can be crucial to distinguish yourself from your competitors.

For more information on how we can help and support your online creativity please give us a call or email hello@mihidigital.co.uk

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To address this we first need to clarify the difference between search engine optimisation and pay per click advertising:

Search Engine Optimisation (SEO)

Search Engine Optimisation (SEO) is looking at and addressing onsite and offsite factors that effect your website in order to help it rank more highly in Google / other search engines. This can include activity such as looking at your sites meta information or structuring, gaining publication opportunities and links back from other high ranking websites or creating social buzz around your content and site.

The activity will usually surround a few key phrases which have been selected to drive enquiries and potential customers to your website, weighing up where there is good search volume against the level of competition for that term.

Pay Per Click (PPC) Advertising

Pay per click advertising is where businesses pay for advertising on Google. They appear at the top of the search results page in a coloured box, or down the side of naturally achieved (organic) results. They pay for each click their advert receives.

The benefits of ranking naturally in Google are clear. Despite not every search engine user fully understanding the distinction between paid-for and organic search listings, the organic listings achieve significantly higher click through rates (CTRs) than their equivilant paid for listings. They therefore drive more traffic and custom to your website.

This is a big positive for the use of search engine optimisation; ranking on the first page and in particular the first three results listings will give you the best potential performance for that search term.

So if that’s the case, why would you turn to pay per click advertising and reallocate budget? The potential cause of this is the element of fluctuation.

Google are constantly working on their algorithm. The most recent changes and updates have included Google Panda and Google Penguin. These changes are not bad news; in fact it is great news as they are constantly working toward improving the search results that the majority of us get every day. What change has brought is fluctuations to search results and as always there have been winners and losers in this shake up. For those that lost out there may be legitimate reasons for these drops, for example the use of what many call ‘black hat’ SEO tactics which have sought to attempt to find holes in the existing algorithm to be exploited.

For others poor or mass quality content, or a very high ratio of onsite advertising may have been the cause for drops.

For those that haven’t been using these techniques there can be a feeling of exasperation and a pointed finger toward the SEO agency acting for them.

Why the sudden drop?

In this instance, where there isn’t a full understanding of the reason for perennial changes to the rankings, you can see the justification or perception of pay per click being a safe pair of hands so as to speak. You know what you are getting with your advertising spend. Pending significant changes to competition for the key phrase you are advertising for you know where and when you are going to appear.

The trade off is a much lower click through rate against the guarantee of search engine visibility. It is this trade off that is seeing at least some businesses reallocate budget away from search engine optimistaion and into pay per click advertising.

The truth is that they both have their place in maximizing the revenue you are able to generate from your search engine presence. They should be seen as linked, rather than an ‘either or’ solution.

Pay per click can be used to supplement and focus search engine optimisation spend, for example gaining advertising visibility on lower volume terms and thus allowing budgetary expenditure allocated to search engine optimisation gaining more bang and focus for you buck on the bigger volume phrases. You would therefore end up spending less on lower volume terms and more on higher volume. Another example may also be to utilise pay per click to gain penetration into geographic markets in which you don’t currently have a physical presence.

So, whilst some may be turning to pay per click as a search engine optimisation safety net make sure that your business is looking at its search engine marketing as an integrated, not isolated, strategy.

For more information on how we can develop your search engine strategy and improve your rankings please give us a call or email hello@mihidigital.co.uk

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