Taking On The PPC Model

There’s word on the street that the downturned economy looks to be forcing a mass exodus of businesses’ marketing budgets out of Pay Per Click Advertising. Some industries are reporting a 20%+ decline in current PPC ad spending against this same time last year. What does this say about the health of one of our most “traditional” online marketing models? Unfortunately, I’d venture to say, very little.

Due to the economic swing timing out nicely with the sizzling hot rise in Social Media’s popularity, we are left with too many factors at play. We can’t pinpoint precisely why things appear to be swinging so wildly in the Search Marketing space, if they really are at all. And I’m not so sure these trends provide anyone the basis from which to predict a conclusive shift in the industry toward or away from anything in particular. We can be sure that it is WAY too soon to herald Social Networking as the David who brought down the Google ad platform Goliath. I’m not saying there’s not a change in the air, but we’re a long way from a paradigm shift. One thing is for sure: we are in a time of flux. For any newcomer, trying to find a path into Search Marketing at this time is clearly more confusing than ever. For those that have been successfully advertising online for a while, it’s a time of experimentation on top of what is known to be working. But it isn’t time for panic.

Living up to my eyeballs in the Search Marketing world for the better part of its entire existence, there’s one thing I know for sure – if you have a fully optimized PPC campaign running, there is little reason whatsoever to pull budget out. The proactive searching audience on Search Engines has always led to one of the lowest costs per lead/acquisition. If you’ve mastered your budget such that you are making a significant measurable Return On Investment in Paid Search – often the highest ROI of all your marketing channels – there’s nearly nothing short of your own business infrastructure collapsing (your main supplier going out of business; half your fulfillment crew walking out the door) that would stop you from spending that money.

When it comes to the hyper-granular level at which you can (and should) manage activity in PPC, you continue doing it because it just works so gosh darn well. Tightening your bootstraps because of the economy? We all fully grasp that. Easing off your PPC budget because the economy is drying up your buying audience is easy if you don’t have a clear cut picture of how well PPC is working for you. If it’s just lumped in with the good old “50% of my marketing is working and 50% isn’t, I just don’t know which is which” mentality, then the decision to kill PPC is easy. For those businesses who have mastered Paid Search, they might stop paying the light bill before reducing ad spend. A drop in search is a call for more keywords to reach more deeply into a target market, a time to split test ad copy more aggressively to improve Click Through Rate (CTR), an invitation to optimize landing pages in an effort to boost Quality Score.

Consider this: right now the businesses who have a fully optimized PPC campaign are drooling like wolves as the average Cost Per Click (CPC) goes down while their competitors, made up of the more clueless managers of ad budgets, run for the hills. And the clueless outnumber the well-informed by a very wide margin. Even today I’m constantly dumbfounded at how I can consistently come in contact with companies whose long running PPC budgets are managed with no concept of “best practice” at all. So, in a medium where doing it right means fully understanding the profitability of every click purchased, seeing the field thin out is only a very good thing.

Clearly great droves of people are still on Google searching for stuff. Paid Search won’t break until the eyeballs go away. Twitter is growing fast, but it’s got nothing on Google. And with Google’s propensity to scoop up eyeballs (i.e. YouTube), Twitter might never see the day where it aims that rock right between the eyes of the giant. The giant is one crafty fighter who can smell eyeballs from miles away.

Social Media Marketing is a wonderful tool for both the experienced Search Marketing advertiser and newcomer alike. But it is young, and requires more complex and diverse measures due to its intrinsic ties to being a natural, conversational, and even more human platform to manage. Based solely on its ability to provide a connection to your target audience of both potential and existing customers, it’s critical to get your toes in the Social Networking water, but not at the expense of lopping off other channels if they can demonstrate consistent ROI.

Try a balanced approach. Learn if your business niche is one more profitably server by Social Media over our more traditional methods. Trust me, we’re all trying to figure that out, and the answer isn’t coming really soon.