Why Pay-Per-Click Advertising ‘Does Not Work’ For Beginners

As an online marketing agency we get a lot of small businesses contacting us to help them make money on the Internet. One of the core services we offer is PPC setup and management, with a focus on Google Adwords. Yet one of the most common statements we hear is:

“I’ve already tried pay-per-click advertising and it doesn’t work”

Immediately this sounds warning bells, as PPC advertising is one of the most profitable methods of advertising available (in fact, we’ve been able to generate more than 1,000 sales per day for some companies using PPC advertising).

After further questioning we find out that they have setup a Google AdWords campaign themselves (because Google makes it so easy) and have invested $500 or $1,000 in advertising, only to find that they could not achieve any results… and based on this they say PPC advertising doesn’t work!

Maybe it is because of the common misconception that ‘it is easy to make money online’. We’ve been hearing this for years now, and I admit that was one of the reasons I started in the online game… but I was wrong, even in the very beginning. Now, after many years in the online game I understand why it is difficult to make money online, and why it will become harder in years to come.

When you market on search engines, like Google, you have to be on the first page to be noticed, and that’s where the challenge lies. There are a maximum of 10 paid positions available to the entire country. That means that from all the advertisers in the country, only 10 can hold a first page position. That means that only those advertisers which know what they are doing can afford to compete in a market where the top positions are dominated by clicks of that cost between $2 and $7 per click.

That’s why you need to work with a professional if you’re serious about succeeding in the online game, because a professional knows how to work with your current advertising budget to get the most out of your advertising spend.

And nine times out of ten, when we do take over a PPC campaign that was setup by a beginner, we find the following mistakes nearly every time:

1. Not enough keywords being used – identifying the most profitable keyword phrases first requires that you build a keyword library of all of the possible keyword phrases that somebody who is interested in your service would type into Google. Most beginners use only 20 or 30 keywords in total, where the minimum for most small campaigns should be 1,000 to 2,000 keyword phrases.

2. Incorrect use of targeting – using exact match, phrase match and broad match correctly will increase your positioning and decrease your average cost-per-click (CPC).

3. Poorly constructed text ads – writing effective text ads, utilising proven marketing principles, will increase your click-through-rate (CTR), improve your quality score and, in turn, decrease your average CPC.

4. Not split-testing text ads – the only way to tell if one text ad is better than another is to split test those ads, track the results and identify which combination of words produced the best results.

5. Not geo-targeting campaigns – geo-targeting, especially for a service company is critical in getting maximum ROI from advertising spend. The last thing you want is to pay for website visitors which are in locations that you cannot service.

6. No continual optimisation – the hardest month for PPC advertising, and the lowest ROI, is in the first month, because it is during this month that you are experimenting to identify the keywords which produce the most profits for your business. Done incorrectly, the first month can cost thousands of dollars with no results at all. But once the ‘money words’ have been identified, continual bid management and optimisation is required to increase ROI from the monthly advertising spend.

7. Conversions are not being tracked – tracking conversions is the most important factor in PPC advertising, because this is how you measure the success of all of the previous 6 points in the campaign. Most importantly, when you track conversions at the keyword level you can increase spend on the keywords which are producing results and decrease spend on the keywords which a not producing results, increasing your ROI.

Without implementing ALL of the above points efficiently and with expertise it is virtually impossible for a small business to compete in an increasingly competitive online market place.

In the last 12 months we have seen the cost of PPC advertising increasing steadily, with the competition in some markets so fierce that the average cost-per-click (CPC) more than doubling in the last 12 months.

Pay-per-click advertising is rapidly becoming a marketing channel dominated by online marketing experts. When a beginner tries to run a PPC campaign on their own, competing against seasoned professionals, their budget is quickly burnt with no results to show for it. And now that the cost of a first page PPC listing costs a minimum of $2 to $7 per click how can a beginner afford NOT to use the services of a professional to manage their PPC campaign and minimise their risk?