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The Rising Fortunes of Pay Per Click

If you use search engines to research and find goods and services you cant help but have noticed the growth of paid search adverts in recent years. Paid search  advertising has become one of the fastest growing marketing activities and this year alone, search engine ad spend is predicted to rise by 14%. But whats driving this trend and who is responsible for boosting its growth?

Paid search – the basics

Paid search campaigns can be a very effective way to maximise website visibility on key search engines such as Google and Yahoo. You can advertise within the sponsored listings on search engines and pay either each time your site is clicked (pay per click  PPC) or according to how many times your advert is displayed.

Internet searchers look for information on a huge variety of topics  everything from film reviews to baby products and even finding a soul mate  by using specific keywords and phrases. By bidding on these keywords and phrases and creating relevant ads, you can reach your target audiences.

With the volume of internet searches for products and services rising at a rapid pace among professionals and consumers, businesses understandably want to be visible in the worlds largest online marketplace. So its not surprising that paid search advertising spend has grown rapidly to match increased online users.

Who uses paid search and why?

Pay per click ads are now big business for retailers, small businesses and even charities and political parties. In fact, combined paid search ad spend for Britain and Ireland was over Ä3.5bn in 2009. A lot of the growth, as in all areas of marketing spend, has come from big name retailers especially in travel, home goods and clothing.

However even though large retailers are responsible for the lions share of spend, small businesses are more reliant on search marketing to drive leads and sales to their businesses. According to a recent study of paid search advertising in Irish businesses, the most common reasons for ad spend were lead generation (64%), followed by driving traffic (43%), direct online sales (35%) and branding (28%).

Its not just private sector businesses that are using paid search to raise awareness and boost income. Over the last two years in particular, the government, public and charity sectors have witnessed growth in paid search marketing. In Britain, all main political parties have been using paid search for some time with the Conservatives in particular using it to bid on hot topics such as the budget and MPs expenses. Charities have also used paid search as a hugely effective marketing tool for achieving visibility on issues and for raising funds. After the Haiti earthquake, the Disasters Emergency Committee and UNICEF used pay per click adverts as part of their overall communications strategy to appeal for donations.

Current Issues

However its not all plain sailing for the paid search industry and in a way its starting to become a victim of its own success. Huge increases in paid search advertising have led to a highly competitive environment in many sectors making it difficult to successfully out-perform market rivals. Next week, Ill discuss the main elements needed to start and operate a successful paid search campaign.

Paul McGarrity, Director, Octave Online Communications