Online Marketing

Online advertising is one of the hottest ways for small businesses to reach new customers. The two most common options are called Pay-Per-Click (PPC) and Pay-Per-View.

Pay-per-click is the term most people use to describe search advertising. This method includes using search engines to deliver small advertisements similar to the classified ads found in a newspaper. When a consumer searches a keyword or phrase, these ads appear above and beside what is known as the organic search listings (meaning natural search results, not paid). Your ad appears only when someone uses a keyword or phrase that you have selected as relevant to your advertisement.

PPC is often contrasted to Pay-Per-View (also known as “cost per thousand views” abbreviated as CPM). Pay-per-view is a display ad where you, the small business owner, pay for that ad to be displayed on a website. The high traffic websites like Yahoo and other content networks usually charge on a CPM basis because they know your ad will be shown X number of times in a given time period. Regardless, you pay that CPM price even if no one clicks on your advertisement.

Both methods are popular and have their advantages and disadvantages. PPC is often considered less costly and results-driven. You pay only when someone clicks on your advertisement. Pay-per-view (CPM) display ads are a bit more expensive upfront, but are used more frequently in brand-building approaches. Prospective customers can still click on that ad and come directly to your site, but you don’t pay any additional money if ten or 1,000 people click the ad. The good news, given this economy and a plethora of display ad opportunities, is that CPM costs have gone down on many sites.

In the case of Psalm23Jewelry.com, an online jewelry retailer, they experimented with PPC methods and had mediocre results. The small online retailer switched to Pay-Per-View with a targeted website in their niche called Beliefnet.com and have had great success. There is a strong argument to be made for such targeted approaches and perhaps can serve as a way to reduce a common problem with pay-per-click known as click fraud.

"We have been running our campaign on Beliefnet.com for over 3 years and have a terrific click through ratio in the 3% range. Not .03% which is common for many companies, but 3%.  Targeting specific locations on the web that match your audience is the most important," said Gerhard Kramer, Marketing Director for Laura K Designs, Inc., which owns the Psalm23Jewelry domain.

PPC and PPV are available via Google Adwords, as well as on social networks like Facebook. The challenges of advertising in the social networks, as noted by many prominent online advertising experts, is that when an individual goes to a social network, they go there for an entirely different purpose than a search engine: To interact with friends and connections.

Advertising, in this friend-oriented environment is either not relevant or not welcome, or both. According to uVizz, a new social network advertising company, Facebook has a .08 percent response rate – meaning that if your ad shows 10,000 times, only eight people will click it. This isn't because the people in social networks are unwilling to consider advertising, it is just that the methods are still being developed and tested. There is hope for the future of online advertising in social networks.

HubSpot, an inbound marketing system company, runs Facebook ads targeted at marketers and is pretty happy with the results. "The CPM (cost per thousand impressions) works out to about 50 cents. CPMs for traditional targeted B-to-B advertising run between $25 and $50. So we're getting as much as a 99 percent discount. Pretty good," says Mike Volpe, VP of Marketing. At the Hubspot company blog, Volpe posts about the advantages and disadvantages of Facebook advertising.

Mellanie True Hills, an author, speaker, coach and founder of the nonprofit StopAfib.org, uses PPC to generate many of the leads to her site, which is about keeping your heart healthy. Since starting a focused PPC campaign in June 2008, her site’s traffic has tripled. The addition of video to their site saw another large traffic spike. They have moved beyond just PPC, however, by incorporating video (a fast-growing trend in online marketing) and using Twitter to post announcements to their network, which yields a solid direct traffic flow.

"We believe in putting our efforts into building the community and content. That's why PPC, videos and social media have been important to us," says Hills. 

"About half of our PPC search clicks come from Google's content [search] network. We do a few carefully-selected ad placements through Google PPC, but it's really minimal, though we've had good results from some of those," she says.

Overall, the online advertising industry continues to grow despite the current economy. The search engine players and the social networks are constantly improving their offering and finding better ways to measure results, such as the creation hybridized models of both the PPC and Pay-per-view models. The best part is you can do limited tests and tightly control your costs to see what works and doesn't. If it works, you can keep turning the dial to increase your sales and profits.