PPC, which is also known as Pay Per Click advertising, has been a highly effective direct marketing method. However, it may not be an ideal web marketing method for the long term. Why is this?
PPC requires you, as the business owner, to keep paying for clicks. In other words, you are buying traffic. Hopefully, the clicks you get are targeted traffic. Since only targeted traffic leads to sales, you would be wasting time and money if the traffic you bought does not convert.
In theory, PPC advertising sounds like a great concept. You pay only when a web visitor clicks on an ad and visits your website. If there are no clicks, you pay nothing – even if your ad gets displayed over a million times. This sounds like a great way to save money. But in reality, this is not really the case.
You see, most PPC advertising uses a bidding system to price their clicks. In other words, all advertisers will have to bid against one another to buy clicks. The advertiser who can afford to bid the highest will get the highest preference in the ad system and will receive the most traffic.
Such a system will work to your advantage when the system is relatively unknown. That is, there is a lack of advertisers competing for traffic in the network. Of course, there is the assumption that the network has got plenty of traffic. In such a scenario, the cost per click will be cheap and you will be able to keep your advertising costs low.
Unfortunately, this scenario doesn’t last for very long. And this is true for almost all PPC advertising networks. In the beginning, you will be able to get clicks as low as 5 cents. Maybe even less. But as more competitors jump on the bandwagon, the cost per click gets inflated and soon, your PPC campaigns become unprofitable.
What happens when you are paying too much for clicks? If you don’t stay profitable, you won’t be able to keep paying for the clicks. Your PPC advertising campaigns will fail in the long run. When you campaigns top, it’s almost as if your entire Internet business grinds to a halt. No traffic means no sales.
So what can you do about this?
The solution is simple. Stop depending on PPC advertising as your sole traffic source. Invest in other sources of traffic such as search engine traffic, banner advertising, word of mouth marketing, and so on. The more marketing channels you have, the higher your chances of success.
PPC is here to stay and will not be going away any time soon. But if you are to depend on it, be aware of the risks you are taking. You may just be pouring money down the drain if you don’t know what you are doing.