As I pointed out in my recent post, I examined how pay-per-click (PPC) is the perfect source for immediate traffic or a great solution for someone who has a clearly identified conversion event that they can drive traffic too.
While PPC is good for short-term traffic needs, PPC as a full-time main source of website traffic doesn’t work so well for the following four reasons.
Rising Cost Per Click
According to AdGooroo data, the cost-per-click (CPC) on U.S. AdWords text ads has increased by an average of 26% across 9 major industry categories between the first quarters of 2012 and 2014.
Increases in CPC were most dramatic in the “Legal” and “Automotive” categories where advertisers paid an average of 50% and 45% more per AdWords click than they did two years ago.
The category with the lowest increase in CPCs (“Shopping & Classified”) is also the largest in terms of paid search spend which primarily includes retailers.
Between Q1 2012 and Q1 2014, the average CPC for advertisers of “Shopping & Classified” rose just 6% from $0.72 to $0.77. The only other category with a single digit increase in CPCs was “Financial” which rose 9%.
Every other categorized industry studied experienced double digit increases in CPCs, including “Education” (31%), “Health” (30%), “Home & Garden” (22%), “Telecommunications” (26%), and “Travel” (15%).
It is extremely difficult to create a sustainable and scalable traffic model when the cost per visitor increases by up to 50% over a two year basis.
Search engine users trust organic search engine results more than they trust paid listings. According to research from GroupM UK and Nielsen, published by eConsultancy, based on a sample of 1.4 billion searches conducted by 28 million UK citizens in June 2011, users overwhelmingly click on organic search results on Google and Bing by a margin of 94% to 6%.
While a more recent study by Oli Gardner of Unbounce shows that the percent of users who click on paid listings has risen by 15% (85% click on organic listings), search users still overwhelmingly say that they trust the quality of the sites listed in organic listings more than they trust the companies that appear in paid listings.
If you are relying on paid traffic as the main driver of traffic to your website, you are missing out on at least 85% of your target audience – those who are clicking organic listings over paid.
Inability to Competitively Drive Traffic
With the combination of rising costs-per-click and ad blindness, it is not a surprise to see that a recent search conductor survey showed that PPC was the worst channel to drive traffic to your website:
Since PPC does not perform as well as other traffic-driving channels, then companies that are using only PPC are missing out on a large segment of their target audience.
Ineffective In Acquiring New Customers
PPC advocates point out that pay-per-click campaigns focus on their target audience with ads and landing pages developed specifically for them. These advocated believe that focus will translate into more customers, but that is not the case according to Search Conductor, especially in B2B marketing where PPC is the least effective of the four inbound marketing channels for acquiring new customers:
The combination of rising costs-per-click, ad blindness, and overall ineffectiveness in driving traffic that converts shows that websites relying only on pay-per-click for traffic to their website are missing out on traffic, leads, and revenue.