PPC: THE PAST, PRESENT & FUTURE OF CUSTOMER CONVERSION YOUR LOCAL MARKETING PARTNER

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1 PPC: THE PAST, PRESENT & FUTURE OF CUSTOMER CONVERSION

2 Mobile ads will represent 20% of all spending on search advertising by (Adobe 2012) CONSUMER PROGRESSION THE EVOLVING PATH TO PURCHASE In the past 10 years the average consumer s journey to purchase has changed dramatically. If we look back to the not-so-distant days before everything went digital, the consumer s path was much more predictable and easier to understand. A business s options for advertising were pretty simple. They invested in newspaper ads, TV commercials, billboards, direct mail and other traditional advertising initiatives. Prior to the Internet and mobile devices, the consumer s road was very linear: they saw the ad, clipped the coupon, or called the phone number on the billboard. The business judged its advertising investment on the increased foot traffic or phone calls it received after the ads were placed. In the simplest way: the business placed an ad, the consumer saw the ad and then became a customer. Today, the average consumer is complicated and fragmented. There are ads and marketing initiatives pulling them in many different directions at all hours of the day no matter where they might be located. With the growth of the Internet and mobile devices, the average consumer may see more than 5,000 ads a day, according to a CBS news report. This makes it tough for businesses to get the consumer s attention, and it s easy for the ads to get lost in the shuffle. A business that is only using a few advertising solutions, or doesn t completely understand the latest digital platforms, stands to lose its investment and potential for growth. A business needs to understand the options available and how they work together in order to capitalize on the opportunities.

3 28% of businesses say PPC has the biggest impact on lead generation (SEO Horizon 2012) REACHING THE AGILE CONSUMER Marketers love to call themselves agile today, but ultimately it s the consumer who is agile and the marketer is simply chasing this fast-paced, potential customer. Consumers will continue to become numb to marketing and advertising initiatives. There are just too many logos, ads and flashy incentives trying to capture their interest. So, as a business looking to increase its profits, how do you get in front of this savvy consumer and generate a return on its investment? The best way to actually reach consumers and build a customer base is through integrated marketing. A well thought out and strategic marketing plan that uses traditional and digital solutions will allow a business to reach new customers and continue its relationships with existing ones. These solutions don t have to break the bank or force a business to drastically increase its marketing budget. An integrated marketing campaign allows the business to reach consumers who are on the go, at work, watching TV, and even inside a store while the consumer is comparing prices on their smartphone. One of the best solutions to add to a business s marketing mix is an online solution called PPC. WHAT IS PPC EXACTLY? PPC refers to pay-per-click, which is the most common online fee structure for paid search. Paid search is an auction-based advertising model. Users bid on relative keywords to their industry and location that will place their ads on a search engine results page matching what consumers are searching for at that time. When these paid search ads appear on the search engine, an advertiser is charged for every click the ad receives. Advertisers are not paying for impressions in this model, they only pay when a consumer clicks on the ad and goes to the associated site. PPC ads don t exist solely on search engines, most people refer to them as PPC ads or campaigns, but banner ads on websites, video ads, mobile ads and other forms of rich media can fall under PPC if they charge the advertiser per click. Although this advertising medium is fairly new compared with traditional forms, it has come a long way in its short existence.

4 HISTORY In 1998, Jeffrey Brewer, who was a part of Goto.com and then later became a part of Yahoo, gave an infamous TED talk about how search engine sites should be using a pay-per-click advertising model. Weeks after the presentation, PPC advertising systems began rolling out and credit was given to Idealab and Goto.com for the industry changing movement. By 2000, companies such as Overture (purchased by Yahoo in 2003) and Google, created the auction-based PPC model we are now accustomed to today. In the early stages, advertisers paying the most per click were securing the highest positions on the search engine results pages, but over time it was obvious this wasn t the most effective practice. THEN DEEPEST POCKET WINS Early PPC stages created a game of deepest pocket wins. National chains, businesses and corporations with huge ad spend were controlling the paid search game. Local businesses and small-to-medium sized businesses (SMBs) could not compete in their own markets against these ad campaigns that were willing to spend huge dollar amounts per click. Back then, when an advertiser bid on a paid search ad with a giant list of keywords attached, they could completely control the search results in a range of markets. This was creating a divide between small business and giant brands online; and ultimately, Google realized that it would much rather have businesses competing for $1 per click on ads 10 percent of the time versus $5 per click one percent of the time. 78% of Internet users search for products online (HubSpot 2012)

5 Spending on search advertising increased by 16% in 2011 in the U.S., 3% in the U.K. (Adobe 2011) NOW QUALITY SCORE Quality Score is an index or variable major search engines such as Google, Yahoo and Bing use that can influence the ranking and cost per click on paid search advertisements. According to Google, Quality Score is an estimate of how relevant your ads, keywords, and landing page are to a person seeing your ad. Having a high Quality Score means that our systems think your ad, keyword, and landing page are all relevant and useful to someone looking at your ad. Google and other search engines put a big emphasis on user experience. Their goal is to have the average Internet user come to their search engine and leave as quickly as possible with the exact information they intended to find. The faster a user leaves their site the better which is completely opposite for businesses looking to attract customers. QUALITY SCORE ACCORDING TO GOOGLE Each keyword gets a Quality Score on a scale from 1 to 10, where 1 is the lowest score and 10 is the highest. Your Quality Score is recalculated every time your ads are eligible for the ad auction, which can potentially happen many times a day. Every time someone does a search that triggers your ad, you Quality Score is calculated. A number of different things related to your account are taken into consideration when calculating the score, like the following: Your keyword s past click-through rate (CTR): How often that keyword led to clicks on your ad Your display URL s past CTR: How often you received clicks with your display URL Your account history: The overall CTR of all the ads and keywords in your account The quality of your landing page: How relevant, transparent, and easy-to-navigate your page is Your keyword/ad relevance: How relevant your keyword is to your ads Your keyword/search relevance: How relevant your keyword is to what a customer searches for Geographic performance: How successful your account has been in the regions you re targeting Your ad s performance on a site: How well your ad s been doing on this and similar sites (if you re targeting the Display Network) Your targeted devices: How well your ads have been performing on different types of devices, like desktops/laptops, mobile devices, and tablets you get different Quality Scores for different types of devices

6 GOOGLE: HOW QUALITY SCORE AFFECTS YOU As we mention above, a Quality Score is calculated every time someone does a search for one of your keywords. This Quality Score is then used in several different ways, affecting the following things in your account: Ad auction eligibility: Higher Quality Scores make it easier and cheaper for a keyword to enter the ad auction. Your keyword s actual cost-per-click (CPC): Higher Quality Scores lead to lower CPCs. That means you pay less per click when your keyword has a higher Quality Score. Your keyword s first page bid estimate: Higher Quality Scores lead to lower first page bid estimates. That means it s easier for your ad to show on the first page of search results when your keyword has a higher Quality Score. Your keyword s top of page bid estimate: Higher Quality Scores lead to lower top of page bid estimates. That means it s easier for your ad to show towards the top of the page when your keyword has a higher Quality Score. Ad position: Higher Quality Scores lead to higher ad positions. That means your ad can show up higher on the page when your keyword has a higher Quality Score. In a nutshell, higher Quality Scores typically lead to lower costs and better ad positions. The AdWords system works best for everybody advertisers, customers, publishers, and Google when the ads shown are relevant, closely matching what customers intend to find. Relevant ads tend to earn more clicks, appear in a higher position, and bring you the most success. 89% of the traffic from PPC ads is new traffic (Google 2011)

7 40% of consumers worldwide trust ads alongside search results (Nielsen 2012) THE FUTURE OF PPC As consumers continue to become more digitally savvy, the importance of digital marketing for businesses and brands will be the driving force for acquiring new customers and retaining them. With so many new Internet-ready devices being sold to millions annually, businesses must spread their marketing initiatives through a range of channels. Our Paid Media solution is far more than just a PPC campaign on major search engines. As we head into the future, paid initiatives will continue to grow in mobile, search and social media platforms. PPC ads on smartphones and tablets allow businesses to capture immediate customers on the go or comparing prices right inside a store. Paid mobile search campaigns allow brands to target the local customer at any time or place they may be searching. Google has put a huge emphasis on ensuring mobile search is focused on local businesses and location-based information with maps and single-click calling. Social media leaders such as Facebook and Twitter will continue to target users with native ads, which are paid advertisements made to look like normal content. These ads are based on a user s likes and preferences, as well as their friends and family s interests. Ads on the right-side column and sponsored stories will continue to be beneficial ad sources for businesses; however, with Facebook Exchange being integrated into the social giant, businesses will be able to capitalize on retargeting campaigns and its own database integration to target the ideal customer. Any business that has acquired customer information such as phone numbers, names and s will be able to match that information with Facebook users. This is a huge advantage for community building, remarketing and ideal customer ad targeting. All these paid initiatives, from search marketing and mobile advertising to social ad targeting, will be the future of PPC and immediate customer acquisition. Paid media campaigns drive bottom-of-the-funnel, immediate sales for businesses today. In order to reach today s fast-paced consumer, PPC is an important tactic to include in your overall integrated marketing campaign.

8 Contact us today to learn more about our PPC solutions.