Pay Per Click Advertising ' The Real Cost of a Click

There is no doubt that pay per click advertising is a very powerful means of positioning your business in front of people who are searching for your type of services. When your customer uses a search engine such as Google to find something, the search engine presents them with natural search engine results, paid results and local search results as appropriate

Paid search results are typically accomplished through a pay per click advertising model where you create your own ad listing that will appear when certain keywords are searched on the particular engine you are advertising on. You pay £X for every 'click' you receive on a given ad listing, where X is determined by factors such as

• keyword popularity,
• competition of the keyword
• effectiveness of your ad.

From an inbound marketing perspective, PPC can play an important role in increasing the visibility on the search engines if you know how to leverage it strategically. However, there are many pitfalls and disadvantages that should be understood before relying too heavily on pay per click advertising to drive your business success.

Pay per click advertising offers multiple benefits as a lead generation tool. Used properly, PPC can benefit your business in the following ways;

Ability to target demographics

PPC gives businesses the ability to target who, when and where your advert is shown. You can select the time of day, for example during business hours, or your adverts can be displayed only on the weekends. If you wanted to only show your adverts to women of 40+ who live in the Greater Manchester area then you can. This hyper targeting means that if you know who your ideal client is then you can specifically focus your ad to that demographic, often benefiting from an improved click through, conversion and lower cost of acquisition.

As a safeguard you can set a daily budget so that if a keyword slips through the net, generates a lot of clicks and eats up your budget you can remove the keyword from your targeted lists. A key point here is that pay per click advertising is not a set and forget strategy, you need to be prepared to dedicate time to get the right results.

Immediate online exposure

Once you have set up your Google Adwords, Microsoft Adcentre or other advertising account, set your keywords and written an ad then you are away. Once your ad is approved it could be showing on the search engines within 24 hours, often less.

PPC is a great way to advertise in the search engines while you are building up your organic listings in the search engine results pages.

More First page Listings

The first page of Google is made up of paid, organic and where appropriate, local search listings. By including Pay per click marketing in your inbound marketing mix your business will get more real estate on the front page, which incidentally is the best place to be for a targeted search term.

The more listings you occupy on the first page the greater the chance of a user clicking on your ad or listing, visiting your site and signing up to your offers over those of your competition.

Quantifiable results, allowing you to measure conversion rates and control your costs.

When you use Pay per click advertising there is an array of Data at your disposal: the number of times your ad has been served, the number of times an ad has been clicked, the number of times the click has resulted in a set action. You can also see the specific keywords that have been searched for and many other factors.

All of this data allows your business to strategically target the keywords that convert best for your business, improving your return on investment.

How much does Pay per click advertising cost?

One of the major reasons that businesses shied away from pay per click advertising was the fear of cost. The truth is, PPC marketing can be expensive and produce very little reward if you do not know what you are doing. Read Google Pay Per Click ' 8 Top Tips for a Great ROI. That will provide you with some top tips to make sure that you see results.

The cost of PPC advertising varies depending on the niche you are targeting and as always the competition. The simple fact is that the more businesses looking to advertise on the same keyword means that the price for this keyword will increase. For some keyword phrases this cost can escalate to really high levels.

Below is a List of the Top Twenty Most Expensive PPC Advertising Keywords

*Price converted from $USD 1.61 to 1 £GBPSource: Fetch123

As you can the highest cost per click is £88.57 for mesothelima settlement; that means that a business is paying nearly £90 to advertise to someone when they enter the keyword phrase 'mesothelima settlement' into Google. That does not mean that searcher will become a client, it simply means that if the searcher chooses to they will click on the advert and be taken to whatever page the advertiser chose to send them to. It could take many clicks before the user actually contacts the business.

For example if the page the business was sending the searcher to converts at 10% (meaning 10% of the people who click the advert will call the business, requests a call back or leave their details), then it will cost £900 for that business to acquire a lead. While many may baulk at that price, according to specialist lawyers, each payout could amount to anything from £65,000 to several million pounds, depending on individual circumstances. Therefore a successful claim will likely see the solicitor claim substantial fees which will no doubt recoup the cost per lead many times over.

Another example from the list is 'virtual data rooms' at a cost of £49.38 per click on Google Adwords. After typing the search term into Google I can see one advert that says starting at $295/m (approximately £183.22 per month). Now working off the same 10% conversion rate as before that would mean a lead would cost the business £480, yet they are only charging £183.22 per month. The key thing here is per month. Services like virtual data rooms are going to have minimum 12 month contracts, possibly 24 month contracts. That means that the life time value of the client to the business could be anywhere from £2198.64 -£4397.28. To be honest when something says 'starts at a minimum' you know that with all the add-ons you are looking at a lot more!

It might take several months before the business starts seeing any profit from acquiring customers at this cost however after six months they will be making profit and that is more profit then they would be making if they weren't advertising.

The point is, acquiring new business costs a lot of money as long as you know the life time value of your clients and your break-even point. If there is search traffic for your keywords then there is no reason why a well managed pay per click advertising campaign will not add value to your business.

If you want to know more about how you can generate more business by leveraging pay per click advertising contact us today!