A whole new world has emerged in recent years – a world that helps businesses transform and grow at the speed of an Internet connection. This new world is referred to by various names, including Paid Search, CPC and Sponsored Links – all of which enable businesses to tap into millions of business prospects online.
The major advantage of this new world of advertising is that business owners pay a preset cost only when someone (a prospective customer) clicks on their ad and arrives at their website. Clearly the customer has an interest in the company’s product or service and wants to find out more.
This is a far more effective form of advertising than the failed 1990s type, which was based on a CPM model (cost per thousand impressions), in which every single person arriving on a search engine was exposed to banner ads, and the advertiser paid whether a click was stimulated or not. In fact, it was not uncommon for an unsuspecting advertiser to rack up hundreds of dollars in ad fees and not get a single visitor to its website.
Here’s how it works: A Nevada business (let’s call it Widgets R Us) wants to find more customers in order to move its new line of Blue Widgets. Widgets R Us has an e-commerce-enabled website that can process orders from interested buyers. Widgets R Us would simply visit one of the “big three” search engines –Yahoo!, Google, MSN (now called Live) – and sign up for an advertising account to “sponsor” search terms that Internet users type in when looking for information on blue widgets.
Widgets R Us would then assemble a list of terms and phrases that people would most likely use when searching for blue widgets, such as “blue widgets,” “widgets,” and even “store selling blue widgets in Las Vegas.” The more terms one has, the better the reach. (I have more than 100,000 terms and phrases in order to promote all of my websites.)
Next, Widgets R Us would set the price it is willing to pay each time someone clicks its sponsored search ad. This can vary widely, but starts at 5 cents per click on most search engines.
Within hours, Widgets R Us has a full-blown ad campaign running on a search engine. Depending upon the amount of search volume for blue widgets, the Widgets R Us website could be awash with new prospective buyers who otherwise would never have known of Widgets R Us or their new line of amazing blue widgets. Best of all, Widgets R Us only paid for traffic that wanted to go to its website to check out the blue widgets. This is called the bid price or price per click (PPC), and can vary widely by sponsored search term.
My advice to business owners is, please – don’t try this at home! This new world of advertising utilizes tons of new approaches and technology. Success depends upon many factors, including finding out which search terms convert into sales and which don’t. Believe it or not, these change over time due to competitor influences and even change on a seasonal basis. Other factors include how well a website is designed to convert visitors into sales (a real science, by the way) and other factors.
Consult with a specialized ad agency called an interactive ad agency. Paid search is very different from traditional advertising models and demands continual research and refinement of ad campaigns and Web landing pages (pages designed specifically to stimulate a particular action, be it a sale or a lead).