Can paid search marketing work for small and mid-size businesses? I guess you have to define work? Here, I mean generate an ROI. If you spend $100 in paid search advertising, will you at least make $100?
The way I see the trend, the answer is no. When the average cost per click was closer to $0.10, you could. Now, however, with the average cost per click over $0.50, and depending on what industry you're in, over $1.00, it is very difficult to generate an ROI, especially when calculating not only media costs (money used to pay for each click), but also payment for a person's/company's time to manage the campaign, the ROI can be very difficult to achieve.
The above is my view. What is your view?
j. Bruce
www.SalesDrivenMarketing.com
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2 comments:
Average cost per click is a useless metric. Average by industry? Average for a given campaign? Average for a core set of keywords? Average for a certain season? Useless. With a PPC platform like Google where you are rewarded for ads that perform, CPCs can be driven down well below 10 cents. Yahoo's moving to that sort of a model, too. When CPC is not driven purely by bid but depends on the effectiveness of an ad, then, yes, PPC is an ideal vehicle for small business.
Average cost per click I hardly believe is useless if your metric of success is ROI driven.
My view is you need to look at the following metrics to determine if a campaign is successful:
1. Avg. cost per click,
2. Avg. cost per sale or lead
3. Avg. lead to sale rate.
Obviously, if the avg. cost per click is to high, then your cost will be more than the profit from each sale.
It's amazing how often the averages work out to be the same nomatter how much you work on ad quality. Sometimes the costs involved to drive CPC down incrementally outweighs the benefits.
And in my experience, the only way to get 10 cent clicks is to either place your ads on Google's "content network". And conversions/sales/leads do not transpire with ads on the content network.
If you are driving 10 cent cpc's, Rich, other than through placing ads on the Content Network or from gaining below a top 10 or 15 placement, please let me know.
Your insight can help us all out.
Best,
j. Bruce
www.SalesDrivenMarketing.com
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