Pay Per Click Advertising

WSJ.com reports that consumers are turning to the Internet to find local merchants and service providers.  Even though the first "W" in "www" stands for "worldwide", it’s possible to have a cost-effective advertising program using the Web.  "Pay per Click" or PPC advertising lets an advertisers message appear on search engine results pages based on the search terms used.  These are the listings that you see either above or along side the regular results.  Advertisers pay only when the searcher clicks on the ad.  If you use the right key words in your ad campaign, you’ll get very qualified prospects at a very competitive price.  According to a report from US Bancorp, the cost per lead from search engines averages just 29 cents compared to $1.18 for the yellow pages.

Google, Yahoo, and MSN, all offer PPC advertising that can be surprisingly inexpensive.  For most retailers, the key is to use local targeting to avoid paying for impressions that aren’t likely to become customers.  For example, Google AdWords offers local targeting by city, by state, by metropolitan area, or even by distance from your location, for example within twenty-five miles of your store. 

Internet users are identified by their IP address, which tells the search engine where they’re located.  Say you’re in St. Louis and have specified your geographic location as users withing 50 miles of your store.  Anyone whose IP address falls within the two state area within 50 miles of your store and who types in your chosen key word(s) will see your ad.  If they click on your ad, they’ll be taken to your web site and you’ll pay for the "click".  Someone in Texas won’t see your ad and you won’t pay for them.

The search engines use a remarkably sophisticated system to direct customers to you and offer assistance in selecting your key words.  You place a bid for your chosen key word(s) which can be anywhere from $0.01 to $100.00.  The higher your bid, the higher your ad will appear on the search engine listing. 

Google has a tool that lets you set your daily advertising budget and helps you select your keywords to get the best results.  Yahoo lets you see what the current bids are for each keyword.  You can choose your position in the results by bidding higher than the advertiser currently holding that position.  For example, Yahoo has a "View Bids Tool".  Put in your keyword and it shows what the current bids are.  Oreck currently has the number one spot for the term "vacuum cleaner" and they’re paying $1.51 per click. Black and Decker has the number two spot, paying $1.50.

You may think you can’t afford $1.52 per click to get the number 1 spot away from Dave, but you can break into the top 10 for just 60 cents.  And remember, with localized search, your ad will only be seen by searchers within your selected area.  If you can get just one in ten people who see your ad to come into your store, is that highly qualified prospect worth $6.00?  You make the call.  That $1.52 price for the number one spot may not be so bad after all.

You can also break into the top ten Yahoo results for "ceiling fan" for 60 cents and for "sewing machine" for just 30 cents.   Microsoft’s Live Search offers similar features.  It’s worth mentioning that Google has about 46% of the search engine market.  Yahoo has 16%.  MSN comes in at 12% and all the rest of the search engines share the balance.  Ads purchased on Google also appear on AOL, EarthLink, and Ask Jeeves.  Ads on MSN also appear on Yahoo, AltaVista, and CNN.  A combined buy of Google and MSN will reach over 90% of the Internet audience, according to SEMPO, the Search Engine Marketing Professional Organization.

With the decline in the use of yellow pages and the ever-increasing use of the Internet, it makes sense to take a look at PPC advertising as a cost-effective way to drive traffic into your store.

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