What are the Pros and Cons of Online Advertising?

PPC (pay-per-click) advertising builds traffic fast and is a great way to test your pages. How can you overcome its inherent shortcomings?

[Need help writing ads? How to write a text ad that pulls like crazy.]

Let's look at the most common paid advertising model, PPC ads, such as Google AdWords.

Because PPC ads are deployed almost immediately, they are the fastest way to drive traffic to a new site, and a great way to test how well different headlines and page designs convert visitors into buyers (by split testing).

PPC ads should arguably be part of the promotion mix for many online businesses. This is especially true for businesses who can buy relatively cheap local words like "Gettysburg Lasik Surgery" instead of the broad and expensive keyword "Lasik Surgery"

But use caution: Small businesses are generally not well-served by the juggernaut of sales companies pushing paid ads over the phone or through email. That's primarily because these sales companies are compensated on customer acquisition, not campaign effectiveness. They have no long-term relationship with your business, nor any way to deal with important execution issues like polished ad-writing.

A considerable percentage of the budget is eaten up in sales commissions, instead of actual ads. As a result, the experience may be rocky, unnecessarily costly, and possibly ineffective.

Most small businesses will be better served by limiting dependence on paid ads, and putting more emphasis on search optimization, content, and communicating with their client base. To the extent your business buy paid ads, you should do so directly, or with the help of specialist who's familiar with your business.

Here are the key things you need to know about online advertising:

• Only about 10% of traffic comes from paid ads. If you don't have a strong local and global results in the search engines, you're missing the boat! You should not rely entirely on PPC. Solution: Build a strong position in the organic search listings by continuously pouring in new content, employ organic and local search optimization methods, and proactively seek inbound links.
  
  
• PPC campaigns are a substantial expense. Figure out how much you can pay for each click and still maintain acceptable profit margins. You may find out you can't buy popular keywords and still keep your margins. Solution: bid on long-tail keywords and lower paid advertising overhead by working with lesser-known ad networks like 7Search, Ask, or AdBrite which offer a lower cost-per-click and higher revenue shares than the big players like Google. [Revenue share is the portion of the ad cost that gets paid to the site owner where the ad is displayed]
  
  
• Someone has to manage the ad campaign on a continuous basis to determine if individual keywords are truly profitable. It's a part-time job. Solution: Any serious paid ad campaign represents a significant time commitment — be sure to factor time into your campaign costs. It may be worthwhile to outsource your PPC management.
  
  
• When you use PPC advertising, you are not building an long-term asset, just a short-term presence. It is more akin to renting an apartment than buying a house. Unless you have another traffic-building strategy, traffic (and sales) will drop dramatically the day you stop paying for those ads. Solution: Continue to build your site in other ways regardless of your paid advertising program.
  
  
• Potential clients are less likely to click an paid link than a normal listing that appears in the main search engine results. Take a look at the eye-tracking study shown below. It is a composite result of how 400 people scanned a typical Google search results page.
  
  Eye Tracking Study showing The Golden Triangle . . .

White (background) areas get little attention. Gray represents areas of somewhat more attention. Orange and especially, red, are areas of high attention. With the exception of the first text ad in the right column, you can see that most of the focus is on the "Golden Triangle" in the upper left hand corner—THAT is where you would like your link to appear.

All the more reason to build pages around the "long-tail" of secondary keywords. Doing so will you give the highest probability of arriving in the Golden Triangle at minimal cost. Of course, you can arrive in the happy Golden Triangle by buying your way into the "sponsored listings" (if any) at the top of the page.

Invest in paid advertising if it can be purchased profitably, or to test the conversion rate of new designs in the short term.

With all paid ads, you must have proper tracking software in place, and just as important, people to monitor the results. As certain keyword / network combinations prove profitable, increase the budget for those keywords accordingly. Drop keywords that don't make the grade.

What are the alternatives to paid ads?

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