Rising Cost of Pay Per Click

We like to preach about discovery (social media + organic search engine optimization + paid search) because we realize that channels such as Facebook Ads or paid search are not as effective at getting people to your site and performing an action there alone as they are in a healthy combination.

This report in the NY Times today comes as no surprise to us…

This concern has become increasingly common as online advertising has become a standard channel for large companies. Attracting those additional advertisers has been great for Google, which reported  a 42 percent increase in paid clicks, year over year, for the second quarter of 2012. But the heightened competition has driven up the prices for keywords and made it harder for small companies like Mr. Telford’s.

While about 96 percent of pay-per-click advertisers spend less than $10,000 a month, according to  AdGooroo, a research firm that studies the pay-per-click market, big-budget advertisers spend hundreds of times more. In the first half of 2012, Amazon reportedly spent $54 million, and the University of Phoenix $37.9 million. “AdWords can bleed many a small business dry,” said Sharon Geltner, an analyst at the  Small Business Development Center at Palm Beach State College in Boca Raton, Fla.

It’s no secret that paid search is highly effective if you know what you’re doing with setup, keyword selection and eventual optimization.

What we do (and what we really enjoy doing) is helping small businesses realize that tactics such as targeting demographics or locations or keyword buying with a specific goal in mind can help level the playing field of the competitive pages of a Google result.