Have you heard of the phrase “throwing money into the trash can?” You definitely won’t hear this from Webster’s dictionary (or Google’s…) but I believe this saying is a great description of pay-per-click advertising. Now just to clarify upfront, pay-per-click can be a useful tool for finding clients and generating sales for some companies, but for most companies this tool is not effective. More often than not pay-per-click advertising campaigns are black holes which often leave business owners frustrated, disappointed and broke.
Pay-per-click (PPC) advertising is about as simple in concept as the name implies. You pay somebody (let’s say Google) a certain amount of money each time someone clicks on a sponsored link to your website. In theory PPC works great since you only have to pay if someone clicks. But there are a lot of factors that companies like Google will rarely tell you when you set up a PPC campaign that make this a very dangerous option for many businesses. Here are 6 major disadvantages to PPC.
One of the biggest downfalls of PPC can be summed up in one word… “AdBlock”. AdBlock is one of the most popular and widely downloaded extensions for Google Chrome. It not only blocks all pay-per-click links but also Youtube and social media ads (If you haven’t downloaded AdBlock yet I highly recommend it). If your ads are designed to target anyone that is tech savvy (particularly anyone between the ages of 15-30), they likely have AdBlock installed and PPC is definitely not the advertising channel you are looking for.
2. PPC can be extremely expensive
When setting up a PPC campaign for Google, the step-by-step instructions give examples of only paying $0.75 per search term but be aware these low prices are atypical. Depending on the keywords you want to rank for, one click on Google is much more likely to cost you anywhere from $3-$50. Let’s say you are the owner of a Salt Lake City law firm and want to rank for the search term “Utah Bankruptcy Attorney.” We are aware of several law firms in Salt Lake City who pay for this term and typically spend around $35 a click.
Now, let’s imagine that a potential client decides to use that term in a Google search for help filing bankruptcy. Assuming they don’t have AdBlock, are not leery of a law firm that has to “purchase clients” using PPC, and they actually click on your ad instead of the 5 other paid links on the page, you will be charged $35. Now imagine they are on a mobile device and your website is not mobile friendly so they exit as soon as your site loads… Actually, let’s say that your website is mobile friendly but they cannot find the information they are looking for so they leave… Actually, let’s assume that your site is mobile friendly, they love the layout and find everything they need but they want to go look for a few other options before contacting you. In any case you are going to pay for the click. Now to make things even more frustrating, when that client does come back to your website he will often do so using the same paid link he used to find it the first time (another $35 out of your pocket).
In the same scenario, if the client actually comes to you then the $70 was probably well spent. However, when you consider conversion rates (the number of people that actually pay you money compared to the number of people who click on the paid link) it is very rare that you will end up paying $70 per client. With a little bit of imagination, you can probably see how your entire marketing budget can be spent in a hurry. Just on a side note, we have spoken with a law firm who spent over $5,500 in one month on PPC advertisements and barely managed to break even from the investment (and that isn’t even factoring in the cost of their time and potential lost business).
3. 1… 2… 3… and POOF! Your money is gone!
Probably the biggest complaint I have about PPC advertisements is the fact that your marketing dollars vanish the second a link is clicked. If you consider our past example, the $5,500 spent in one month has now left that law firm’s marketing budget and will never provide additional value outside of the conversions that were made as a direct result of the clicks.
Now imagine that instead of paying $5,500 to Google Adwords, that the firm paid $5,500 for blog posts (they could probably buy at least 20 posts for that price), graphic design and some social media marketing. Those blog posts are going to remain on their website and in Google’s archives FOREVER where they can be found for years to come. Not only that but 20 search engine optimized blog posts will pull up for many more search results than the 1 specific term covered by the PPC ad and will be valuable to your customers.
4. PPC click fraud
I won’t expound upon this one too much but did you know there are actually people (sometimes including your competitors) who click on PPC ads just to waste your money? There are a plethora of words to describe these people but I generally try to avoid using them…
5. People ignore paid advertisements… like the plague
If you go back in time 10 years, would you ever click on a pop up ad or paid link? Absolutely not! Back in the day, clicking on pop ups and advertisements was about the same thing as signing up for a computer virus. Even though I know perfectly well that most paid advertisements (especially ones from major search engines) are completely safe to click, I am still conditioned to avoid those links at all costs.
Another reason people ignore paid advertisements is because they are often times obnoxious. Have you ever visited a website or your favorite blog only to have an ad pop up as you scroll down the page and block the entire screen? As picky as this sounds, there are a handful of blogs that I used to follow but no longer do for that very reason.
6. Pay-per-click advertisements are not right for every industry
When evaluating whether or not a company might benefit from a PPC campaign, I try to place them in 1 of 3 categories.
The first category they can be placed in is “PPC could definitely be beneficial for them!” This accounts for probably 5% of the companies we interact with. Often times they involve online sales or other transactions that are completed within minutes of clicking on the ad.
The second category is “There are definitely more effective marketing strategies but PPC might work to an extent.” This category is typically reserved for the few companies who might have very few competitors or for whom word of mouth or reputational advertising is not as important. Take T-Mobile for example. I have never had anybody in my life tell me they like T-Mobile… but T-Mobile is still my cell phone service provider? Why you might ask? Because my options were between Verizon which has great coverage but will require me to take out a second mortgage on my home, or go with T-Mobile and have terrible coverage but be able to afford my plan. Both companies targeted me with paid ads but T-Mobile ended up winning because their ad mentioned a $50 a month cell phone line with “unlimited data”.
The third category is “PPC is a very bad idea for this company!” There are some scenarios where I would avoid PPC at all costs. The first is if you are running a reputation based company where paid advertisements may cause you to look cheap or desperate. If you needed to find a new dentist, would you want to go to a dentist who had to pay for visits to their website? I doubt it. I imagine the first place you would go for referrals would be your family or friends. If they didn’t have any suggestions I imagine you would then ask your insurance company, followed by social media and organic search engine results and then maybe use PPC ads as a last resort.
In addition to reputation based companies, I would also advise you to avoid PPC if your company provides a peculiar or interesting service. For example, I started up a small company during college where I made balloon art and entertained at events (check it out the Utah Balloon Guru website to better understand where I am going with this). Now if someone sees an advertisement of me wearing a Captain America balloon suit, they are going to click the picture to get a bigger view (trust me… I learned this the hard way). However, very rarely will this ever convert to a sale or a booking for me.
In order for you to create a marketing campaign that will deliver significant long term results, you will need to use a variety of advertising channels and a strategy that is tailored to your needs. PPC advertisements can be extremely dangerous because they tempt business owners to try to handle all of their marketing and lead generation through PPC. Do not fall for this common trap. If you have any questions about pay-per-click campaigns or more effective ways to market your business, please feel free to contact us!