For a business marketing their products and services, either to other businesses or direct to consumers, I fail to see how many are getting value from Adwords and pay-per-click.

I set up some local campaigns for a company this week, ie. “[service] Hampshire”, etc. It’s quite a specific set of key phrases I’ve chosen and the adverts and landing pages are optimised. One of phrases, even with a click bid of 80p, is rated as position 20.8.

You’ve got to have a high value product to make that pay.

I used to run Adwords on the beauty shop. In January, is cost me £220.61 to deliver £255.46 worth of sales. That, is unsustainable. I turned them off and despite the lower level of sales, my profits have inevitably risen.

Google must be laughing and many businesses, I can only surmise, simply don’t get it.

Before I start, yes I know, a campaign is only as good as the person who has created it and I like to think by now I know how it works, so this is (in my opinion) an honest overview of Adwords effectiveness, bearing in mind the costs below don’t take into consideration my time managing them.

Anyway, Adwords. It is seemingly becoming harder and harder to justify the spend, and the temptation to spend more, on the advertising platform for some of the products I am selling.

What once seemed like the holy grail a few years ago has become saturated with advertisers, trying to outbid each other and the costs have spiralled. Add to the mix the sheer number of retailers joining the market and it is becoming a little overcrowded.

Below, is a graph of sales on one of my online shops. The average sale value is about £30-40 so every click that I am paying for needs to offer real value.

But, sales through Adwords are on the decline vs. costs. with an averaging of 40% of the sale going on Adwords. This is still profitable for me overall, but only just.

Now, I could argue that I am perhaps getting buyers come back having found the site and bookmarking it rather than buying then and there. I could also factor in repeat sales from returning customers (I also utilise opt-in e-mail marketing).

But, I have to wonder if online pay-per-click is losing it’s appeal as a viable sales route, at least for this product range, or am I missing the point?

Yahoo Adverts comes out even worse, actually costing me money to run!

My answer, and I wish I had more time to spend on applying this, is two-fold.

Content - to attract traffic. I am talking words in articles, videos on You Tube, etc. Basically, the creation of quality content that will age like a fine cheese, attracting traffic and links, raising my profile for specifics.

Social Media and Online PR - While a few people moan about Facebook and privacy issues, we are having quite good success off the back of it at a fraction of the price of Google. There is also room to spend interacting with forums, etc. And, you can’t beat a good bit of old fashion PR, sending products to people who may write about them, picking the right writers for the right audience.

Organic seems to be the way to go.

So, it’s been over a week and my Facebook advert is sending me traffic. No conversions yet though and I get different results from Facebook, than I do from my stats (see below) in terms of referrals - 60 from Facebook / 41 from Hitslink.

The only anomaly I can logically think of (away from the fact that the stats may not be accurate is that some visitors clicks back VERY quickly after clicking the advert, not giving the stats code long enough to load.

My summary so far is that despite the fact the no orders have directly converted, the spend so far is $1.39 = 68 pence - affordable for me to keep buying click-throughs. An equivalent number of clicks from Google campaigns would be in the region of £19.80 (2911% more expensive).

So, we are now just a few days into the Facebook advertising and I am getting results.

Yes, it’s very early to tell but the costs are negligible compared to something like Adwords so I am more than happy to keep this stream of traffic going for now having spent just 87 cents on 58 visitors (according to Facebook - Analytics has it at 37 and this could be people instantly clicking back before the Analytics code loads on the page).

No orders yet, but it’s got a long way to go to be costing the same as an Adword purchase.

Time spent and number of pages viewed are coming through as comparable with our Adwords Campaign (4.11 pages and 3.22 mins respectively) and the bounce rates (the percentage of people who click through then straight back again) are almost identical at 40.15% - until you factor in the different between the analytics and Facebook bringing Facebook’s bounce rate up to 62.07%.

Summary

I will stick with this for now and maybe update my findings in a month or so but my immediate reactions are that I am going to stick with this for now. The cost is so small (for now) that there isn’t really a massive downside.

It’s early days but after one evening, the first trend I am seeing is the very low click-through rate, which is to be expected.

Although it is targeted marketing in terms of advertising to a specified audience; unlike search engines pay-per-click, the adverts aren’t being asked for by the audience, so from that respect it’s still interruption and on the face of it no different, say, from advertising a product type in the adverts between a certain type of tv programme.

That said, it’s early days yet and I can see areas where this model could expand.

So, at last - social advertising on Facebook, which to my untrained eye is the same as Flyers Pro, is now live and I have just set up my first campaign for the Beauty Shop project.

To set up the adverts you need to log-in to your account and at the footer of the page, select Advertisers.

After creating your social advert, it is a very simplistic process in four steps.

1. Set Up Your Landing Page

Probably, you have a site you want to drive traffic to. Alternatively, you can set up your own page on Facebook. I didn’t do that so can’t explain the workings as I am looking to drive traffic to an e-commerce site.

It’s a simple screen though:

2. Set Up Your Audience

Again, a simple screen where you can begin to drill down your audience. You select keywords from their pre-defined lists that appear as you enter your definition, so these I’d imagine, tie in with peoples hobbies and likes, etc.

I am just going after women interested in beauty related things, rather going after a larger generic audience. Interestingly, the interface keeps you in touch with how big your audience is with every tick box selection.

3. Create Your Social Advert

You can enter 20 characters in the Title and 135 in the body. There is also the opportunity to upload a photo, or in this case a logo.

4. Set Your Budgets

Finally, you can set your budget and choose your advertising model. You can either choose to pay an amount per click through on your advert (ie. you only pay when someone clicks your advert):

Or, you can per per impression - (every time it is shown per thousand times):

5. Dashboard

Within minutes I am already getting page impressions for my adverts and I it is quick in terms of reporting. Time will tell if any of the advertising converts. I’ll keep you posted.

…and why I’m hoping a crash is on the way.

I am beginning to think that success using Adwords is no longer viable with some business models. I use Adwords on a number of campaigns for clients with varying success, some of it with very good returns, but the overriding trend I am seeing is that clicks are costing more, making Adwords a harder marketing/advertising route to profit from.

Supply and Demand

Like share dealing on the stock market, the better a keyword performs, the higher the cost-per-click becomes.

As more companies use Pay per click advertising. picking up the most generic keywords, these prices have gone up. Supply stays the same so the demand pushes up the price and what cost pence last year, may be costing pounds now purely down to the number of people you have to compete against.

Amateur traders

With any trading, there are small business and inexperienced people trying to ‘trade’ and Adwords is no different. Beginners will tend to go for the most obvious keywords, partly based on the hype and anecdotal stories of success they have heard. That’s fine if they want to waste their money, but these people are partly to blame for the increase in prices. But, then there are also the people who still know what they are doing.

I understand landing page content efficiency and keyword and “key phrase” relevance but the plain truth is that it’s more expensive now than it used to be and the prices keep on rising, no matter how good the algorithm.

You may decide to go for more specific terms that don’t generate as much traffic, but give you better quality click-throughs. This is all well and good, but does it deliver the returns for your business. In fact, can it deliver results cost-effectively for your market full stop?

Different Business Models

One of the key differences, perhaps, to the business that I am trying to do through Adwords, is where the money gets made, my customer based and what I sell.

For instance I run a couple of online shops. My shop may be selling online but it makes money by selling something tangible in the real world. Other business models make money purely by the amount of people that hit their site eg. through page impression advertising.

So, not only are you competing against other companies selling what you sell. You are also competing against companies pulling traffic so they can make money through further advertising on their sites. Suddenly your competition just doubled and pushed up the prices for advertising even more.

This will continue until people don’t make money from their advertising and either go bust, or give up on that route of traffic… and I hope that’s soon.

The Long Tail is not 100%

As mentioned above, one argument with keywords is the long tail. The idea, simplistically, is to go after lesser searched terms because although there are less searches made for these terms, they are arguably more specific, wide ranging and cheaper.

I do agree with the Long Tail principle, but like most things, it is not 100%. For instance, our beauty shop, attracts mainly women. Many through consumer portals, such as Orange and AOL, with very generic terms.

I have disposed of many generic brand name keywords on the beauty shop recently to reduce the increasing costs and have stripped down lots of other campaigns, reducing budgets, even though Google is willing to tell me how I can get more traffic. Unfortunately for me, it’s not some sort insider trading, because they share the same ‘great’ keyword research with everyone.

There is no doubt that Pay Per Click advertising has changed the game for a lot of people for the better, but like most forms of marketing, it has a shelf life of time where real profits can be made and perhaps that short bull run is coming to an end.

I am dying to try the Facebook Flyer Pro advertising with a chance to set some targeted adverts on Facebook and only pay for the click-throughs. Starting at approx 5p per click (10¢) it seems a great platform to experiment with.

Facebook Flyer Pro allows for a different type of targeted advert than Google pay-per-click (currently) inasmuch that is profile related rather than search ‘keyword’ related’ (see diagram).

The problem is, and it’s a known problem (I had a reply to my querying e-mail), the Facebook system simply won’t accept a credit card coming up with a ‘field entry’ error on the entry page - one after the other - and I know my card is okay.

I am assuming it’s a UK problem as Rod on Innovation Creators talks about his experience with the platform (he might not have used Pro but I can’t get that to work either).

Come on Facebook - sort it out - I have dollars to give you.

Google Adwords is a great tool for driving traffic to a website, especially an e-commerce site. It creates a quick and easy way to reach a search audience by creating an ad and bidding on a set of “keywords”. But, because it’s easy and delivers results, more people are using it, which is driving up the click-through charges.

It’s worthwhile adding that a lot of these people are lazy and unskilled, bidding on the most generic terms and throwing money at it - Google must be drooling. I had a meeting with a charity a couple of months ago who assigned themselves a £500 budget and got through it in less than a month. When I checked out their account, they had one advert with 5 very generic terms and had paid a hell of a lot per click-through. The sad thing was the words were so generic that they didn’t actually apply to what their charity does.

When dealing with clients, what I have found interesting is that many of the corporates still view pay-per-click as advertising in the traditional sense of the word, ie. stick up an advert and send it over - let’s go for numbers. And, because of that they don’t mind spending thousands of pounds a month to drive traffic to their site.

Yep, than can be done, but when the visitor gets to their site, the process is broken, the information is not clear - basically the experience is lacking. So, the traffic shoots up, but the sales or leads don’t come in.

But, suggest they take their marketing budget and spend it developing the website and it doesn’t seem to register as worthwhile!

A lot of marketing people still seem to see a website as another piece of collateral, like a brochure. “It’s done, I can see it so let’s move on to the next piece.”

So, ask yourself, do you even know what you are getting? Do you know the parts of your website that work, or don’t work? You could start by loading on a good stats package - Google Analytics (free) or my favourite is Hitslink. You could also start to actually talk to people. Ask them to be frank and become objective about their responses. The old analogy of the “weakest link” on a website is so, so true. If you can start to fix the broken stuff, then the marketing may look after itself…