We are all familiar with those ever-present text ads that appear to the right and above the search results. Called "Paid Search" or "Pay-per-Click" ads, this form of advertisement is now pervasive whether you use Google, Bing, or any other major search engine on the web. It seems like everyone is advertising on Paid Search these days, but is it right for your business?

How does Paid Search work?

Paid Search or Pay-Per-Click (PPC) advertising is now offered by all major search engines: Google, Bing and Yahoo. Each ad is tied to specific search keywords, so that it shows only when someone searches for those keywords. The fundamental difference between Pay-Per-Click and traditional advertising is that with PPC, you pay ONLY when someone clicks your ad to visit your website. Compare that to a magazine or TV ad, for which you pay (and pay a lot) regardless of whether someone sees your ad or not.

Advantages of Paid Search

  • Invested Audience Pay-Per-Click advertising is Non-Interruptive, which means your target audience is actively looking for the services or products you are selling. Compare that to a magazine or TV ad, which interrupts the person as they are trying to read an article or watch a TV program.
  • Flexible Budgeting Unlike many other advertising media with high cost of entry like magazines or TV, PPC advertising allows you to control your own campaign budget. Want to spend $1 a day? $10 a day? You set the amount, and your ads will simply stop showing once your daily budget is reached!
  • High Degree of Agility and Control Another advantage of PPC over traditional advertising media is that you can start, stop, modify, or replace your campaign at any time – you are never "locked in" to a set advertising package. Want to run a last-minute promo? With PPC, that’s a simple change, and it becomes effective immediately, which is not possible with any other advertising medium.
  • Flexible Targeting Not only can your Pay-Per-Click campaigns target specific keywords, they can also be optimized to target specific geographies, so that you can reach just the right prospective customers with just the right products or services. This is a great way to reduce campaign costs, so that you do not end up paying to show your ad to prospects outside of your geography (for example, if you are in the business of repairing cars in Chicago, you probably don’t want people in New York or Bangkok clicking your ads and driving up your advertising costs). Geographical targeting helps you make sure that you are paying only for viable leads.
  • Accurate Performance Tracking Another advantage of Paid Search advertising is that it is very easy to track. Real-time statistics allow you to see how your ads are performing, how many visitors are sent to your website (your click-through rate), and how your daily budget is being utilized. By comparing the "click-through" data to related new leads and sales, you can get a very accurate idea of your campaign’s performance, also known as your conversion rate (you are converting site visitors into customers or leads).

Potential Gotchas and Other Considerations

  • Know your goal, so you know when you are (or not) being successful. As with any form of advertising, it is important to have a clear and measurable goal for your campaign. Paid Search ads are meant to generate conversions on your site. You need to decide what conversion means for your campaign -- a sale, a request for quote, a downloaded case study, or whatever else you decide is a key milestone of the sales cycle.
  • Are you in the right place? Keep in mind that not all types of advertising work for every type of business, and you need to decide if this is the right channel to reach your buyers. For some things, buyers just don't search on Google or Bing. There may be many professional communities and directories your potential buyers may be using. it could be money better spent to advertise there instead -- even if it costs more upfront, your audience will be much more qualified than on public search engines. 
  • The click is just the beginning. You may have a compelling ad, but where does it take the visitor when they click it? Don't just dump the visitor on your Home page or Contact page. Poor landing pages result in clicks that don't convert, and this means wasted advertising dollars! Your ad's landing page should be purposefully built for the ad. It should showcase the product or service you advertised, and make it easy for the visitor to take the next step and convert into a lead or a sale. 
  • Watch those keywords.  make sure the text of your ad matches the keywords you are bidding on - otherwise there will be a disconnect and you will not get a lot of clicks. Search engines provide tools for finding the right popular keywords and also show you how much competition you will have for them. The more competition, the higher it drives per-click prices.