THE BLOG
12/09/2014 05:40 pm ET Updated Feb 07, 2015

Is PPC Advertising the Right Choice for Your Small Business?

Pay per click (PPC) advertising can be an incredibly effective way to increase exposure to your target audience and drive traffic to your website. PPC ads occupy prime real estate at the top of search engine results, making them an attractive option for small businesses struggling to reach the first few positions organically.

The ability to deliver ads to a highly targeted audience who are actively looking for your products or services is what makes PPC advertising so incredibly effective. However, it still may not be the ideal advertising solution for your business. Here are five key questions worth asking yourself before committing a chunk of your marketing budget to PPC advertising.

1. What is the Value of a New Customer?

Return on investment is the crucial consideration for any marketing or advertising spend, and this can be especially true for PPC. It is all too easy to quickly burn through your budget as people click on your ads, so you need to ensure that those who come to your website will offset your costs.

Think beyond the initial spend per transaction and consider what a loyal customer is worth to your business in terms of repeat sales. If your business sells subscription based services or products that are bought repeatedly then you can afford to spend more to acquire new customers.

2. What is Your Profit Margin?

PPC lends itself more to products or services that have a bigger ticket value because there is more room in each sale to absorb the PPC costs of that sale. There are always exceptions, but it tends to be a lot more challenging to get a strong ROI on lower priced products or services (for example around $100 or less).

On the flip side, if you have lower profit margins or a lower average order value, PPC can still be successful for you, particularly if you're looking to target less competitive keywords. However, it will be more difficult. You will need to be conscious of your campaign costs and bid value to ensure that the cost of attracting new customers isn't removing your profit margin entirely.

3. Do you Have Niche Products or Services?

The notion that you can "buy anything on the internet" is well grounded in fact. People often turn to a web search to find unusual products that aren't readily available elsewhere.

PPC offers an effective way to advertise unusual or hard-to-find products to a niche audience, capturing their attention at the exact moment they are looking to make a purchase. Often the cost per click for niche keywords will be less expensive than mass market keywords, so they also have a potential for a higher return on investment.

4. Is your Product Range Extensive?

If you sell a wide range of products you have the benefit of being flexible and creative in your keyword choices. With a broad scope of descriptive, long-tail keywords your ads can display information that closely matches what a customer is searching for, while simultaneously keeping your cost-per-click low as you avoid more generic, expensive keywords.

Let's say you sell hooded sweatshirts in ten different colours and six sizes. The cost-per-click for the keyword "XXL navy hoodie" will be significantly lower than that for the more generic keyword "hoodie". To make this approach even more attractive, ads that closely mirror someone's search terms are more likely to bring paying customers to your site.

5. Do Your Products Have the "Deadline Factor"?

PPC can be an ideal advertising choice for products or services with the "deadline factor" as the customers are more primed to purchase rather than just browse. Wedding suppliers, new school term supplies, last minute anniversary gifts or products that are seasonal in nature all demand that a purchase is made within a specific time frame letting you reach your target audience at a time when they are already mentally prepared to spend money. These types of purchases are also often emotionally-driven, making customers even more likely to be influenced by effective copy, imagery or call to actions in well-crafted ads.

Carried out properly, PPC can bring a steady stream of sales or pre-qualified leads through your website. But in the world of paid search, cash is king. At the end of the day, it's not the number of clicks that counts, but the profit that new visitors bring to your bottom line.

A bit of careful number crunching up front and during the early phases of a PPC campaign can save you from blowing your budget on poorly designed campaigns and will ensure that each visitor gives you the best return for your investment.

For more tips and information on online marketing and web design check out our website, Magicdust Web Design.