The rush of local advertisers staking their claim to the top
paid advertising spots on the search engines, networks and local
online directories surprised Gordon Borrell, president and chief
executive of market research firm Borrell Associates. His firm's
research shows that US companies who operate strictly on a local
level will spend $3.9 billion dollars for online advertising in
2005. That's roughly double what they had predicted for the year
and well above the 28.4% growth they reported for 2004.
Borrell's numbers are conservative however, when compared to the
United Kingdom (UK) spending numbers released by the Interactive
Advertising Bureau. They showed spending overall on online
advertising to be up more than 60% in 2004 over 2003. Paid
Search Advertising accounted for 39.5% of that figure and was
itself up more than 87% over the previous year.
"We've always viewed local advertisers as fairly conservative in
that they don't have that much to spend," Borrell told Clickz
Network reporter Rob McGann. "Typically you expect them to
funnel most of their ad spend into direct mail and yellow pages,
with only a small percentage for online, but that is not the
case at all this year."
WSI Internet Consultant Ron Adelman wasn't surprised at all. He
believes that local advertisers are behaving conservatively when
they choose to participate in paid online advertising. In fact,
he says 80% of these local business people jump at the chance to
do Pay-Per-Click (PPC) campaigns when he shows them how many
people locally are searching on keywords related to their
business. He also reports that every single one of his current
clients is engaged in some level of PPC ad campaign, targeting
either a local, national, or international audience.
"Pay-Per-Click is the best way for any company to reduce their
advertising risk. Because even if your campaign isn't that good,
you only pay when you get results - when you get someone to
click through to your site" he shares.
The other risk Adelman believes these businesses are reducing is
the overall financial risk posed by the high bid prices many
generic but popular search terms can pose. Very competitive
keywords like "mortgages" or "Web design" could easily command a
bid price of $10, $15, or even $30 per click. However, when you
add a regional term such as "St. Louis" or "London" to the
keyword "mortgages" and use a tool like Overture or Wordtracker
you'll see that the number of searches done on that phrase may
be dramatically lower - 30 - 40 searches as opposed to 4,000 to
400,000. Through effective keyword research a business can
identify more specific keywords which cost substantially less,
oftentimes just pennies a click.
One of the major benefits of running a local PPC campaign is
that it provides flexibility in reaching local customers within
a given geographic area. For example, a florist operating in
Edinburgh, Scotland can set-up their ad so that it only appears
to users within the Greater Edinburgh area.
'Few industry experts recommend that a small or medium sized
business attempt to track their own campaigns and results.'
Adelman reports his typical clients happily spend between $300
and $1,000 USD on their clicks each month. His St. Louis,
Illinois WSI office charges a very affordable fee to set up PPC
campaigns and manage them each month on behalf of their clients.
Adelman and his team provide the expertise and careful
management that each PPC campaign requires making sure clients
get the optimal return for their PPC advertising investment.
While the major search engines themselves offer advertisers a
variety of free tools to help them manage and track the results
of their PPC campaigns, few industry experts recommend that a
small or medium sized business attempt to track their own
campaigns and results. They note that while most can track which
keywords convert the best, many do not look deeper into their
numbers to know whether what they are doing is at the best
possible price.
Management of a PPC campaign goes beyond setting up an account,
keyword research, writing ads and setting a daily advertising
budget. It also entails measuring your results and tweaking your
ads and placements to improve on those results. Tracking which
words convert the best is only the first step across the surface
data available. Which search engines or networks return the best
conversion results for each keyword, or whether they're doing so
in your targeted cost range are just two more of the many other
variables you'll want to keep an eye on. You'll also need to
know, and use, your average cost-per-sales, average customer
acquisition costs, and average lifetime customer value
calculation to determine the actual Return on Investment for
each phrase, ad, campaign, engine, search network, or local
search directory used.
While managing a successful ongoing PPC campaign can be
extremely tedious and time consuming, even a poorly run campaign
can begin to increase a company's search visibility within days
or hours.
"I can literally walk in to any business with a document in my
hand that shows them how many people searched for their type of
business, product or service online last month, and say the one
thing that every businessman wants to hear - I can guarantee to
put them on top of all those searches within hours of launching
a brand new website. I can guarantee that they will be found"
exclaims Adelman.
About the author:
Ricardy Banks is a Certified Internet Consultant with WSI
Internet Consulting & Education with over 20 years of experience
in the IT industry. rbanks@easywsiwebsol
utions.com
Written by: Ricardy Banks
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