Posted by Lee Jackson on Google+ & filed under Digital Marketing, Inbound Marketing, Paid Search (PPC), Search Engine Marketing (SEM), Social Media Marketing (SMM).

 

Whether you call it pay-per-click (PPC), cost-per-click (CPC) or just plain old Google Adwords (not that Adwords is by any means the only paid advertising platform of this type), research from a YouGov survey reveals that only 18% of businesses actually manage to recoup the cost of their PPC campaign, let alone make a profit. But why? Is PPC no longer an appropriate strategy? What has changed to lessen its effectiveness?

Is PPC advertising dead?

Few would deny that organic SEO is the most effective means of generating a high ranking website and a decent amount of traffic, especially in the light of Google’s latest major updates such as Panda and Penguin. But for many years a popular approach when launching a new brand, a new business, a new website or even a new product or service has been to give it an initial head start by launching a PPC campaign.

But whilst long term PPC campaigns have never been overly recommended, today they seem to be taking short term PPC campaigns with them too. If only 18% of businesses even recover their costs, something is going wrong. But what is it?

I think that there are two main answers to this, and two main reasons why, if not dead, then at least PPC, is dying out.

Firstly, there are a huge number of people who never even see things such as Google Adwords advertisements, sponsored listings and PPC adverts. Such as me. I can’t recall the last time I saw one. Why?

Because like millions of other people sick of seeing their search results littered with advertisements, I installed a free ad-block addon to my web browser. This is a simple addon that takes a couple of seconds to install, after which you need never be bothered by another PPC sponsored listing, advert, flashing banner, or blocks of advertising links again. Websites look so much cleaner, so much easier to read, search results are actually helpful and relevant, and the internet becomes a better place!

I know I’m not alone: Over 13.6 million people using Mozilla Firefox have installed this addon, along with 7.4 million Chrome users, and similar addons are available for Internet Explorer, Safari and other popular browsers.

I think the point here as well is that the very people savvy enough to actively seek out and install an ad-blocking addon are the very same people most likely to be using the internet to research products and services and place orders, because they’re more net savvy.

But I think the second reason why PPC may be on its last gasp is because of the way the web has changed in recent times. We’re more social. With Facebook ‘Likes’ and Twitter retweets, replies and hashtags, with open, accessible and personable brands, and with consumers becoming the marketing power behind successful brands, today online advertising is about engaging with customers, about creating brand loyalty, trust and transparency.

Advertising methods which use platforms such as Facebook and Twitter offer more creativity and originality, more effective ways of targeting your audience, and more ways of creating real relationships with customers.

PPC doesn’t encourage brand loyalty, it doesn’t provide transparency, and it doesn’t even attempt to create a relationship with customers. It’s about flashing a quick fix solution at a rather loosely defined target audience, with affordability the dominating factor, rather than quality, or even honesty.

It’s window shopping for the superficial, and this is perhaps why businesses may well be better off investing their PPC campaigns in social media based advertising such as Facebook Ads and Twitter Promoted Tweets, rather than a form of advertising which millions of potential customers will never see, and most of the rest will ignore.

What do you think? Do you believe PPC advertising is dying out? Have you stopped, or reduced your use of PPC? Are you one of the 18% of businesses which has actually seen any kind of success with PPC? Share your thoughts and experiences below.

 

 

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  • http://komdat.com Chris

    Hi SEOjunkie,

    I didn’t read the YouGov survey as your link pointed to the home page. You base your perception of “dying” on one survey and the growth of ad block plugins. How about looking at actual industry growth rates? Yes they have slowed and markets like the US are saturated, but the global trend is still far away from negative growth.

    Besides, you didn’t share the survery’s methodology and put the conclusion in context with other results. Does YouGov take spillover other channels into account? Ever heard of “research online, purchase online”? From my work experience, I know that many companies run ineffective AdWords campaigns but the even that return is higher than other channels.

    And why do you compare the lack of a positive return on PPC spend to ranking and traffic in SEO? Is that your “return” metric for SEO? Sorry, but your catchy title and your lack of thoroughness on anaylising the situation is not professional. This is not high quality content.

    Chris

  • http://www.david-groult.fr David Groult

    Hello,

    I’m really surprised by the results of this study. I don’t think the PPC is dead. Profitability is probably less than before because the competition and the CPC increase.
    With the development of AdWords features, we see that the space occupied in the SERP are soaring. So, I think that Adwords will continue his development.

    PS : I am so sorry for my english ;)

  • http://www.searchinfluence.com/blog Douglas Thomas

    I’m not sure if AdBlock is an issue. While these outdated stats (http://gigaom.com/2010/05/27/firefox-downloads-active-user-metrics/) would make about 10% of FF users blocking ads (with that one plugin), the demographics of those users would likely not make them particularly susceptible to ads anyway. Those users already likely are adblind and aren’t likely to buy anyway — remember that only .5-2% of impressions lead to clicks on Google search… More importantly, so long as AdBlock isn’t still triggering the impression, there’s no wasted spend for CPM campaigns, and either way no wasted spend for CPC ones.

    The social nature of web 2.0 is also a bit of a red herring. Facebook allows you to like a post or page from an ad, while delivering ads focused from what you or your friends like.

    The biggest thing is that PPC is a bit heavy on metrics and, like any advertising campaign, subject to constant tweaking. I feel that since few even figure out if they’re making money from their site in general, it’s even harder to determine effective PPC ad campaigns. They might truly be underestimating the value…

  • http://www.webpresence.tv/ Lee Jackson

    Hi Chris, many thanks for your comment. In fact your comment is exactly what I was hoping to see in response to my post, a discussion!

    I deliberately took a rather extreme approach in order to stir people into thinking more critically about their approach to PPC. I see too many businesses still blithely leaping into expensive Google Adwords schemes without really analysing the alternatives, the competition or developing clearly defined aims.

    Interestingly there has been much debate recently about the fact that around 5-6% of Facebook accounts are fake, and that certain countries seem to be developing ‘Like’ farms which are causing very significant problems for businesses which have switched from Adwords to Facebook advertising. It’s important not to leap into the arena without knowing what people have to say about it, but all too often I find most people gushing about Google Adwords, or gushing about Facebook advertising.

    Yes, they both represent very real opportunities for businesses, and yes, they can prove to be very successful and effective. But there’s a bigger picture, and by providing a somewhat more negative view than is normally seen I hoped to encourage people to step back and review their assumptions.

    I admit it was one sided, and perhaps a little skewed, but deliberately so!

  • http://www.insight-and-analytics.com Paul Reynolds

    I don’t think ad blocking tech is much to do with it – it’s down to rising CPC costs combined with more competitive markets than ever before, plus consumer ‘ad blindness’/savvy-ness causing a triple whammy on getting PPC to wipe its face. I recall a time when using Adwords was fairly unique, you could pay 10p for top keywords and consumers would click not realising the link was an ad.

    Yesterday I picked up a magazine which had a Google insert, with a £50 Adwords voucher! And I thought, wow, times must be hard! But on the flip side, I’m sure it’ll bring new spend that is massively under optimised, nice for Google in the short term.

    Overall a very interesting article to raise the point, and will be watching this space (along with most the web I imagine)