Pay-Per-Click is So Overrated
March 8th, 2007 | Categories: marketing, markets, networks, social media, strategy
A bold statement to say the least - considering it is the basis behind Google. But I think it should finally be proclaimed to the world. Pay-per-click (PPC) is overrated beyond belief. If big changes don’t happen soon, we may see a new advertising model take shape. Just don’t ask me what it looks like…
First, we know that as much as 30% of all PPC traffic is driven via click fraud. I would even wager that this number could be higher, but some might call me a conspiracy theorist. Nonetheless, this means that deserving businesses can immediately write off as much as 30% of their PPC marketing budgets, as they will produce no results or sales. This has a huge impact on Internet marketing ROI.
This brings on another interesting point. Who the hell clicks on those damn text ads anyways? I don’t know of anyone, personally. Therefore, an elaborate scheme of low-paid Chinese clickers and/or Internet bots (or some other form of click fraud) must be present. The only other possible explanation is that non-savvy Internet users mistake these ads as being part of a given page’s content or part of the organic search results, and naively click through. Once again, this usually results in no sales for the advertiser and a lackluster ROI.
Basically, I’ve detailed why I think PPC sucks and how quality of the incoming clicks are weak at best. So where does one turn to drive qualified traffic and a reasonable ROI? Search engine optimization (SEO)…
Now excuse my bias to SEO (I do consulting in the area), but this form of search engine marketing is highly underrated, yet super effective. So why is it so often overlooked? It takes time and doesn’t usually provide instant results. Furthermore, a strong knowledge of the area is necessary to maximize results and most companies do not have the in-house expertise to do so. PPC campaigns drive instant, ‘qualified’ (or as I like to say, fabricated) traffic.
All I need to say is this…
PPC: Paid, non-qualified traffic.
SEO: Free, qualified traffic.
I mean… this seems like a no-brainer to me. But companies continue to focus on PPC. Here is a startling fact: 90% of company search engine budgets are allocated to PPC as opposed to SEO. This boggles my mind to no end. It should be the other way around.
PPC just seems like the trendy thing to do. “Everyone is doing it so why not us?” Eventually, companies will open their eyes, re-evaluate their ROI, and embrace SEO in a big way. Until then, the short term traffic gains of PPC seems to mask the longer term gains of SEO.
Now I know PPC does work for some and I will get slammed for such a post. But for the majority of us (including companies), PPC is a wasted of human and financial resources. Time and money can be better spent on other marketing initiatives.
March 8th, 2007 at 1:58 pm
Click fraud is a concern with contextual PPC, but not for search PPC, since no one (except Google) would profit from clicking on the ads.
The Adwords system enable to desactivated contextual PPC, which I do right from the beginning.
March 9th, 2007 at 4:45 pm
You’re absolutely correct. Not only is click fraud way more rampant than people realize, studies show that conversion rates are less than 3% and dropping. And, click pricing is really getting crazy. We’re a Pay Per Call company providing accountable, proveable direct response and it really surprises us to see the hoopla around PPClick. We believe their grip is weakening - eMarketer just came out with a dandy survey that shows 39% of major advertisers starting to look around for alternatives to PPClick.
Earl Brown, CEO
ValueLeads Pay Per Call
http://www.valueleads.com
March 11th, 2007 at 3:43 pm
I think your article is long on claims and short on substance.
“Who the hell clicks on those damn text ads anyways? I don’t know of anyone, personally.”
You don’t click on search ads and no-one you know does either, therefore no-one clicks on ads. Great argument. I never bought a Toyota.
Bottom line, anyone relying on web-traffic needs to utilize as many channels as possible, SEO, PPC, linking, classified ads, etc.
March 12th, 2007 at 1:43 am
Jean -
I could honestly see Google leveraging the system to their advantage and producing their own click fraud campaigns to artificially boost earnings and exceed earnings expectations. How hard would it be? And even more importantly, how hard would it be to catch?
Brian -
I think your comment lacks insight and in-depth industry knowledge. I work in the indsutry and I’ve seen first hand how the system works (or fails to work). PPC is not the way to go. Click fraud has taken over and drives a majority of the impressions.
I do agree that websites need to utilize as many channels as possible, but PPC doesn’t have to be one of them. It costs money and is highly ineffective in most cases. I’ve stated most of my arguments in the blog post, but that is just my point of view.
I do appreciate your comment and thoughts though, as I always do.
Cheers,
Aidan
March 15th, 2007 at 9:58 am
I agree in a way, but disagree as well. While I believe PPC is generally good, it is indeed becoming over-run by click-fraud and to a lesser extent, ad-blindness, which I personally have these days. I believe that if Google and other PPC-reliant companies can come up with a good solution to click-fraud, they can continue to stay on top.
I personally make a decent amount from AdSense, so it obviously works to an extent. The trick is targeting. Maybe you’ve never clicked on them, and I RARELY do, but as long as they are highly relevant and presented in a non-intrusive way, I think people are fine with them and actually find them useful.
The only problem I’ve noticed really are the ads where you click on them and they just bring you to another page with nothing but more ads. Google knows about the problem but aren’t really doing much about it. I guess it’s making them too much money to worry about, but it really degrades the user experience. Sorry about the long reply.
March 16th, 2007 at 12:22 pm
You’re so right. PPC is not a cost effective way for businesses to aquire customers anymore, in my opinion pay-per-action (PPA) is what is going to attract the majority of small/ mid-size businesses to the internet.