Is PPC worth it in terms of time and money?
Judging by all the ads you see online, the answer is “yes”. Businesses wouldn’t spend this much money on online advertising if it weren’t profitable.
However, there are some nuances to this. For instance, PPC works on an auction based system, where countless advertisers bid for ad space.
This competition for ad space drives up prices for and leaves space for two kinds of businesses:
- Massive corporations with near bottomless pockets. These players spend for scale, not for efficieny.
- Highly efficient companies that spend small amounts of money but are highly tactical and efficient with their budget.
What is PPC?
Pay per Click Advertising or PPC is an internet marketing model where marketers or business owners place ads on popular internet platforms (most frequently, Google Search, Facebook, Google Maps, etc.)
One of the most significant advantages of PPC is that advertisers pay only when someone clicks on their ad. In other words, they don’t waste their budget on people who aren’t interested in the company.
This ad then takes the visitor to a landing page – a web page that prompts users to purchase a product, ask for a quote, call a representative of your company etc.
There are other similar models of advertising called Pay per View or Pay per Impression. With those models, you pay when your ad has been viewed a certain number of times.
When done correctly, PPC advertising can be very profitable for a business, is an easily sustainable marketing channel, and can create significant brand awareness by placing your ad at the top of the search engine results or social media feeds.
Types of PPC ads
Businesses that opt for PPC as a marketing channel can choose from multiple types of ads, each one with its own specific advantages and disadvantages.
1) Search Ads
Search Ads are some of the most popular types of PPC Ads. These appear at the top of the search engine results page when a user looks for something using Google, Bing etc.
Suppose you have a website that sells courses online. If you set up search ads and someone searches for subjects related to your course, your ad will be among the first listings shown in the results page.
The benefit of this type of ad is that you can configure it to appear for specific search terms (e.g. “real estate courses”) but not others (“gardening courses”).
The example above is very general, but marketing platforms such as Google Ads or Microsoft Advertising allow you to be extremely precise with the word combinations you want your ad to appear on.
However, these ads are text-based only, so no visuals. That being said, you can add various features to the add such as a phone number, click to call, go to Maps, etc.
Search ads also need a well-written meta description to capture users’ attention.
2) Local Search Ads
Local search ads are location-specific ads that will be visible only to users in a particular location. An added advantage is that these ads are visible on Google search and Google maps as well.
Suppose you have a business that serves customers in a specific location (such as barbershops, restaurants, bars, pizza shops, etc.). In that case, local search ads will help connect you to nearby customers.
3) Display Ads
Sometimes words are not enough to describe your product, so you need visuals too. This is where Display Ads come into the picture. These ads are most commonly shown on websites, either in content or somewhere on the side.
Display ads are shown across many websites, depending on audience relevance and the platform used to create the ad.
In terms of targeting, you can choose to display ads to users that belong to specific interest groups (e.g., car lovers, gamers, food lovers, etc.).
Overall, you don’t have quite as much control as with Search ads, but can reach a much wider audience. Cost per click is also lower since there’s usually not as much competition compared to search ads.
An added advantage with display ads is that they have multiple payment options. You can choose cost per click (CPC), cost per thousand impressions (CPM), or cost per acquisition (CPA).
The most common way to create such an ad is through Google Ads, since it has a vast network of over 2 million websites that reach ~90% of global internet users.
4) Remarketing Ads
Remarketing (or retargeting) ads are shown to customers who have already visited your site.
Remember the ads that seem to follow you around the Internet after visiting a certain site? Those are remarketing ads.
For example, if you have an eCommerce site, you can track which users have added products to the shopping cart but left your site without purchasing. Afterward, you send this data over to Facebook Ads or Google Ads, and create ads that target those specific users who’ve abandoned their cart.
These types of ads are incredibly effective from a cost-to-earnings ratio since the visitors have already proven to be interested in what you have to sell and are much more likely to convert.
One downside is that you need traffic and sales first to make it work since remarketing is more about optimizingexisting marketing spend and not acquiring new customers.
The other big downside is that remarketing is not a privacy-friendly marketing method, even though it is very profitable and relatively easy to set up.
5) Video Ads
If you’ve ever watched a YouTube video then you’re probably familiar with these types of ads. They come in 3 categories:
- Pre-roll ads that play before a video.
- Mid-roll ads that play during a video
- Post-roll ads that play after a YouTube video.
With these ads, you can target specific languages, locations, and demographics.
6) Google Shopping Ads
Last but not least are Google Shopping Ads. Just like search ads, they appear on the results in the form of carousels. They contain rich product information like seller name, price, and product image.
Suppose you have a business that sells kitchen appliances, you can set up Google shopping ads of your products to appear every time someone searches for related terms such as food mixers, toasters etc. These ads provide a quick buy link for users to buy specific products.
7) Short list of Facebook Ads
This section only lists the most commonly used Facebook Ads, but won’t go in the same depth as Google Ads, mostly because Facebook isn’t as used as Google.
- Carousel Ads – great for promoting products
- Lead Generation Ads – used by companies that sell services
- App Installation Ads
- Facebook Brand Awareness Ads
- Facebook Local Business Ad
How does PPC Work?
PPC and online advertising in general works on an auction based system. Suppose an advertiser wants to appear for the keyword “new yorker barbershop”. In that case, he will submit his ad and budget per click to Google, and then enter into an auction with other barbershops that want to appear in search results for the same keyword.
If the advertiser has the best bid, his ad will go to the top of the search results. If not, it will go down to the 2nd, 3rd or even lower positions, depending on how many other advertisers were in the auction for that particular keyword.
Other factors like bid amount, ad quality, ad extensions, and keyword quality determine the quality of a bid and what position your ad will take.
A similar auction process exists for Facebook and other ad platforms as well.
7 reasons PPC is worth it
1) PPC give you instant traffic
If you’ve ever run a blog or website, you will know how hard it is to rank in the top 10 search results. It might take months, sometimes years, to get anywhere near the top.
However, PPC is a quick shortcut to the top of the search results. With a high enough bid, a quality ad, and good landing page, you’re guaranteed to be seen by hundreds of potential customers within a few hours, sometimes minutes.
2) PPC doesn’t need a large budget to start
There is no minimum spend requirement for PPC advertising, so it is accessible to businesses of all sizes.
With traditional advertising channels such as TV, radio, or even flyers, you’ll often have to spend a large amount of money upfront just to enter the game.
PPC is much more budget-friendly in that regard. If all you want to do is play around with the settings and figure stuff out, you could credit your account with $30-$50, start up a few ads and see how they perform. This is great if you want to test an idea or a new approach for your business.
With PPC, you are in complete control of your budget. You can spend as much or as little as you want. Along with this, you can set a limit on your daily ad expenditure and track your ROI in real-time.
If you feel you’re spending too much, you can stop your campaign at any time.
3) PPC lets you target specific consumer groups
PPC marketing platforms such as Google or Facebook have a very sophisticated understanding of their users. This allows an interested advertiser to be very specific with the audience they want their ads to reach.
You can target specific age groups, locations, genders, people with particular interests, and many other criteria.
To avoid unwanted traffic, you can even block specific audiences and keywords from seeing your ad. This helps you save money by avoiding consumers you know won’t be attracted to your products or services.
4) PPC lets you test various kinds of ads, copy and audiences
Advertising platforms such as Google or Facebook let you create as many versions of an ad as you like. You can experiment with different types of ad copy, sizes, or images and see which one works for you.
As an example, assume you’re in the business of selling French presses.
Their intended purpose is to brew coffee but can do other functions such as frothing milk, juicing fruits, or making tea.
With PPC, you can create different ads for any possible function and see how well each ad works.
5) PPC allows you to measure spend and conversions
Traditional advertising channels such as TV, radio & billboard ads suffer from an attribution problem because advertisers can’t measure how effective their spending is.
If an advertiser spends $5,000 on all three and generates $8,000 in business, they will have a tough time figuring out which channel is profitable and which loses money.
PPC doesn’t have this attribution problem. With PPC, an advertiser can measure almost to the dollar which audiences and keywords generate the most revenue.
For instance, a men’s barbershop can have two ad active ad campaigns, one for “man bun haircut Brooklyn” and another for “buzz cut Brooklyn”. The barbershop can then measure how much revenue each campaign generates and what demographics each type of haircut attracts.
To go even further, the barbershop in our example might notice the “man bun haircut Brooklyn” campaign is wildly profitable among 30 to 40-year-olds, but highly unprofitable for every other age group. The barbershop can then adjust ad spend to target only that specific age group and ignore the rest.
Above is just a brief example of the kind of variables an advertiser can use to customize their ads. At any given time, you can check the visibility of your ad, reach, click-through rate, conversion rate, and a lot of other metrics that will help determine if your campaign is successful.
If you are not satisfied with the results, you can pause the campaign, make the necessary changes and restart again. You can also check if you are getting the expected return on investment.
6) PPC lets you remarket
As mentioned previously, remarketing allows your business to reconnect with already interested customers and nudge them into purchasing your product.
Remarketing is a very cost-effective PPC method and is almost always profitable. It won’t generate as much money as finding a new marketing channel, but it’s a great method for “squeezing the juice” out of an existing one.
7) With PPC, you won’t depend on algorithm changes
Many successful YouTube channels, Facebook pages, and blogs died suddenly because of an algorithm change that destroyed how visible they were to users.
Businesses that rely on PPC are much more protected from these sudden changes. Facebook, Microsoft, Google, and other companies with advertising platforms don’t want to chase away their paying advertisers so they are cautious and methodical with their updates.
When updates do happen, they’re rolled across slowly over months, sometimes years. Businesses also get ample warnings and constant notification regarding the change so they can plan in advance.
6 Reasons PPC is NOT worth it
1) PPC doesn’t guarantee sales
PPC can get you visibility for your products, but it doesn’t guarantee you’ll get sales or leads. If your ads, targeting and landing pages aren’t correctly set up, you could potentially spend hundreds of dollars and not get a single sale or lead.
2) You don’t pay, you disappear
PPC can take you to the top very quickly but your position there will vanish the moment you stop spending.
The effect is instantaneous too. One hour you have hundreds of visitors to your site; the next you’ll have 0.
3) PPC is expensive in the long run
For short or time-specific campaigns, PPC can quickly build up brand awareness and a customer base.
However, in the long-term, PPC can be much more expensive than building organic, sustainable traffic through SEO or social media.
Also, with PPC you have to pay every time someone clicks on your ad, even if they clicked accidentaly.
4) Some niches are too competitive to be profitable
Every marketer wants to be at the top of the search results. When multiple people are eyeing the same keyword, this can result in some ugly bidding wars. Sometimes, you might have to bid a hefty sum to get to the top of the page.
In some industries, such as insurance, the cost per click can be as high as $50. Yes, you read that correctly. Getting an Internet user to click on an insurance ad can cost $50. This doesn’t guarantee they become a paying customer, only that they click the ad.
Similar price ranges exist for attorneys, lawyers, doctors, stock trading, mortgages, loans etc.
Companies in these niches can afford outrageous prices because their high-profit margins soak up the losses. They don’t care if their ad campaigns aren’t profitable; what’s important is to carpet bomb the market.
Remember how PPC is an auction? These big players spend so much PPC money in their respective industries they raise the prices for everybody else. If you don’t have the money to compete, you either drown or find other ways to reach customers.
Other industries are not as irrational in their spending, but you might still have to enter expensive bidding wars with bigger players just to get traffic on your site.
5) Your target audience might not even be on the Internet
The Internet seems to be everywhere nowadays, but some demographics are not as connected as others and PPC can’t efficiently target them. In this case, more traditional advertising methods are still your best bet to tap into this demographic.
The Verdict
PPC is an effective way to market your products/services but it does come with its own flaws. Healthy businesses are built on multiple marketing channels, not just PPC. Along with PPC, you can try other marketing models like content marketing to get the best out of your marketing campaigns.