Five Proven Ways to Waste Money with Pay-Per-Click Advertising

Jan 30, 2007 9:41 PM  By

For small and midsize companies in particular – and thanks to its ability to narrowly target prospects, tightly manage spending, and precisely measure results – pay-per-click (PPC) advertising is one of the most efficient lead-generation tools ever developed.

It does, however, have a downside. Because PPC campaigns are so quick to set up and so easy to get started, a business owner can easily waste thousands of dollars in a matter of weeks before learning some hard (and expensive) lessons about what works and what doesn’t.

To help you begin generating results as quickly and efficiently as possible, I’d like to point out the most common mistakes made with PPC, so that you can avoid them from the get-go.

Mistake #1: using your home page as the landing page. When you set up a PPC ad, whether it’s with Google, Yahoo!, or any other search engine, it’s up to you to decide where to direct the people who click on your ad. By default, most companies simply send clickers to their home page. After all, they reason, if the home page is the digital equivalent of the company front door, shouldn’t we bring prospects here as a starting point?

No, and here’s why: Most company home pages cover too many subjects and have too much going on to work as effective landing pages. Simply dropping a searcher here in the hope that he finds what he’s looking for almost guarantees frustration and failure. Remember, a person who initiates a Web search is looking for something specific. Tossing him to a generic home page (with the implicit message, “Here, you figure it out”) will work against your intention of converting ad clicks into leads or sales.

Instead, the most-effective PPC ads take clickers to a tightly focused landing page – a page specifically developed and matched to the subject of the search, with minimal distractions, a strong call to action, and a well-thought-out process for moving the searcher to the next step, whether that’s requesting information, signing up for a newsletter, or making a purchase.

Mistake #2: failing to bid enough to secure a top spot. PPC works on an auction model, giving you, the advertiser, the option of deciding how much you want to pay for a particular search term. In effect, you can choose how high up in the ad listings you want to appear. All else equal, the more you pay relative to other advertisers, the higher on the page your ad will be.

Popular search terms can have a dozen or more ads listed in order on search results pages, giving the impression that anyone can drive clicks with PPC. But consider this startling statistic: 85% of all PPC clicks are on ads in one of the top three positions. The remaining ads – whether there are five more or 50 more – share the scraps.

In practice, that means that unless you bid high enough to get into one of the top three spots, you’re wasting your time. You’re not wasting money, since if nobody clicks you pay nothing, but if you choose to be hidden further down the list, you’ll have trouble generating the leads you want to close the sales you need.

Mistake #3: failing to make the ad copy specific. Yahoo allows you 190 characters (including spaces) in your text ad. Google allows just 70. No pictures, no colors, no company logo… just a few words.

Many advertisers waste this precious space with vague, meaningless terms (“quality,” “economical,” “good service”) or general statements that don’t clearly explain the uniqueness of their offering. When that occurs, one of two things can happen — both of which are bad.

The second is much worse, because it costs you both time and money: The wrong searchers click. In other words, your ad causes clicks, but those who click thanks to poorly written ad copy are not good candidates for your product or service. You pay for the clicks, but the leads go nowhere.

So be specific and unique in your ad copy. If you’ve got patented or otherwise unique features, a particular market or application expertise, unusually friendly return policies or warranties, or something else that sets you apart, this is the place to mention it.

Mistake #4: not aligning the landing page with searchers’ keywords. Here’s how the ideal PPC sequence should work: A searcher goes to a search engine and inputs the search term “red widget.” Your ad pops up, and the term “red widget” is in the headline as well as in the ad copy. The searcher clicks on your ad (because you’re in one of the top three spots) and arrives at a landing page that is specifically about red widgets.

No confusion, no hesitation, no wondering if maybe this isn’t the right place after all.

The important thing to keep in mind is that Web searchers have lots of options and are presented with lots of data. Together, this leads to impatience and a tendency to abandon any search that doesn’t quickly and easily lead to a desired result.

Mistake #5: not bothering with testing. One of the things that makes PPC advertising so compelling – particularly for those with limited ad dollars – is that it is instantly and perfectly testable. Unlike an ad in the newspaper, on the radio or in any of the other traditional, offline media, PPC dollars are trackable. Not only can you tell which words were clicked on, but you can also follow the click all the way through to a completed conversion (a newsletter sign-up, a literature request, a sale).

It’s critical, therefore, to constantly and continually test PPC results – tinkering with or discarding the keywords, ads, and landing pages that don’t work – and making improvements along the way. You will not get everything right from the start — that’s guaranteed. But thanks to the data that PPC advertising generates, you have the ability to fine-tune the process and continually improve your return on investment.

John Grant is president of Take Aim Search, a Westminster, MA-based search engine marketing company.

Copyright © John Grant 2006. All rights reserved.