Pay Per Click Pitfalls and Solutions

by Janet Attard

Pay per click? Or pay for nothing? That’s a question a lot of small businesses are asking. Pay Per Click (PPC) search engines are often promoted as an affordable way to bring targeted traffic to web sites. Unlike traditional banner ads, where advertisers pay by the number of times an ad is viewed (usually expressed as cost per thousand, or CPM), advertisers using pay per click search engines pay only when a user actually clicks on their ad. So they promise to be a cost-effective way of bringing new customers to your web site.

And often, they are. But there are a few flies in the ointment too.

The biggest one is that you can burn through your advertising budget very quickly if you're not careful. That's because the way you buy advertising on PPC search engines is by bidding on keywords. There are various formulas used, but for the most part, the highest two to four bidders have their ads shown in the top positions in  paid search results and get the most clickthroughs. Since most advertisers want their ads to show up top, they bid up the cost of keywords for popular terms, driving costs up. On the day I wrote this article, a small business web site would have to bid over $3.00 per click to come up in the first one or two spots for the term “small business”. If only 100 people clicked on that ad per day, they’d be paying $300 per day, or $9,000 per month to bring traffic to their web site using the term “small business.” Other terms small businesses might want to bid on aren’t as costly, but many still have price tags of over $1.00 per click.

But still, many small businesses (and major companies, too), do buy PPC search engine ads, and do profit from them. How do they do it? Here are some of their “secrets.”

Start with a specific goal
For most businesses, that goal is much the same as your goal for direct mail or yellow pages advertising is. That’s to attract ready-to-buy prospects to your doorstep for a specific product or service. Remember, at the end of the day, it’s not the sheer number of people who click through to your site that matters. Nor is it any ranking on Google or Alexa or other measurement systems. What matters is:

1. How many serious prospects (credit card, PayPal account, checkbook or purchase order in hand) click through to your site
2. How effective your web site is engaging the visitor and getting them to buy something or retain your services
3. How much profit you make from PPC search engine visitors after accounting for the PPC costs and other normal costs of doing business.

The bottom line for PPC advertising, is, after all, your bottom line. Not the total number of people who hit your web site.

Choose link pages carefully
It’s tempting to link PPC search results to your home page. After all, that’s the main page on your site, and you want visitors to see all you have to offer. But the home page can be the worst place to link PPC advertisements. The reason: Most sites don’t actually sell anything directly on their home page. They use the home page much like the cover of a brochure, to display a pretty “face” to prospects and customers.

Even if the site is well-designed with a navigational structure that will lead the prospect inside the site, that pretty face isn’t necessarily what the visitor wants to see. If they’ve clicked through from a search engine, they are more interested in specific information (which may well be a product, or product literature), about the word or term for which they had searched. If they can’t find that information quickly, they’ll return to the search engine results page and click a different link. Landing, perhaps, on your competitor’s site.

Those sites that do sell directly from their home page often have too many products on display. So the PPC visitor may leave because they don’t immediately see the item they were interested in.

To solve the problem, link to your selling page (called a landing page, because it’s where the people “land” once they click through your ad.). Be sure the sales copy is clear and the order button easy to find.

Look for low cost, high probability and high click-through keywords related to your product or service
Although that sounds like an oxymoron, it’s not. If you carefully evaluate what you sell and what customers may be looking for, you can often find keywords that get response, but aren’t priced at top dollar. Several of the PPC search engines show you what it costs to get into the top spots for individual keywords and phrases. On Overture for instance, when you enter a search term you can see what the top five bids are for the keyword you chose. On Google AdWords, things work a little differently. You pick a keyword, specify the maximum amount you are willing to pay for the word, and a daily budget. Then Google will estimate what position ad will show up and the estimated total cost per day based on those choices. You can enter various terms to see what the cost would be, and what your position and cost would be.

You can estimate the popularity of one search term over another (but not the cost)  by using the keyword generator tool on Overture once you sign up to be an advertiser.  Although the numbers of searches are likely to be different for Google and Overture, the percentages for each term should be the same. Thus, if  Overture shows there are 50 times more searches for the term "book store" than for the term  "child book store," you could expect a similar relationship between searches on Google.

You can  find keywords you might not have thought of yourself, and get predictions on the popularity of  various keywords by using  WordTracker. The fee is reasonable – and you can sign up for as little as one day if you want to test out all the features.

Make sure your web hosting is reliable and your links work
This isn’t as obvious a suggestion as it sounds. From time to time I’ll click on links people include with messages they post in mailing lists or send me in email. And more than a few times, I’ve gotten Page Not Found errors when I clicked on links. Either the whole site was down, or the individual link in the message was broken. Now, those clicks from mailing lists didn’t cost the site owner anything (other than loss of interest on my part), but if they were using the same links in PPC engines, they were probably losing money. Although the major PPC search engines review your listings when you first place them and won’t release your listing if the link leads to a Page Not Found error, it may be a long time before any human from the PPC company reviews your link again. If you change something on your site that breaks the link, or if your site is down, you could wind up paying for clicks on broken links.

Analyze the PPC search engine performance
That’s something that’s easier said than done. The PPC search engines all suggest ways you can add tracking code to your URLs so you can tell what drove traffic to your site. But they all have contracted “search partners” who display their listings. And, some of the less popular PPC search engines, in my experience, have somewhat questionable search partners.

The term “questionable” here refers to two types of search “partners.” The first is made up of search sites whose sole existence seems to be to get people to click on links and get paid for those clicks. So you get lots of traffic and burn quickly through money you’ve deposited in your PPC account. But it’s all transient traffic. Few if any of the “visitors” stay long enough to actually look at what’s on your page. The other type of questionable search partners are actually parasiteware and spyware sites. Parasiteware and spyware sites offer their users some apparently desirable software feature (easy way to fill in online forms, weather reports, or other online tools). But once you install that “useful” software, you also install software that follows you around the web, displaying ads the parasiteware site sells on top of, or under the web sites you visit. Typically the ads the parasiteware site displays are for products or services that directly compete with the web site you visited, or with advertisers on that site. Or, they set up links or buttons in specialized toolbars that look like they ought to be from your site (because they are on the same topics you cover), but lead to competitor sites.

So, when you buy PPC ads that are placed on parasiteware search engines, people clicking on your ads get to your page, but see ads from your competitors. (Hence the term parasiteware.)

Not surprisingly the PPC search engines never identify such questionable partners in any list of search partners they make public. And using tracking code won’t always identify the questionable partners. In fact, if you ask the PPC search engine to explain why they claim more clickthroughs than your logs show, they’ll often tell you that the extra hits are from search partners, whose names they can’t disclose.

You may be able to discover these with a little sleuthing and a good log analysis program, however. If you are seeing high clickthrough charges that you can’t match to visits to your site, look at the referrers in your log analysis program and see if there are any unfamiliar sites sending a lot of traffic. If there are, visit the unfamiliar site, and see if they are promoting some type of downloadable software or ask you to install anything on your computer. Don’t install what they ask, but do go back to the PPC search engine and turn off your ads for a few days. Then look at your log analysis program again to see if the unfamiliar name still shows up as a referrer. If it’s gone, go back to the PPC search engine again and restart your ads, but with only a limited amount of money – just enough for one day or a part of a day. Then look at your logs one more time. If the same unfamiliar referrer shows up and your clickthroughs are high again without a corresponding increase in sales, you then have a pretty good guess about the source of the clickthroughs and can decide whether you want to continue advertising with the PPC search engine involved.

About the author
Janet Attard is the founder of the award-winning  Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets.  Follow Janet on Twitter at http://www.twitter.com/JanetAttard.

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