Will I make money from online advertising?

Many people find that online advertising is an extremely cost effective way to get more traffic to their website. The question is, will you make more money from it?

Branch Out's clients certainly do! But we begin by thinking about what type of advertising makes sense for their particular business and we ask ourselves a number of questions:

1. Are there any industry-specific websites which offer appropriate advertising opportunities? For example, the recruitment and property sectors are very well served by big sites which achieve great search engine rankings and have large advertising budgets. Rather than competing with them, it might be better to piggy-back on their successes and simply advertise on their sites.
   .
2. Is there already an online market for your product or service?
   .
3. Which words and phrases do real people actually use when they look for your product or service.
   .
4. Can you distinguish between the search terms used by people who are simply gathering information and those who are keen to buy?

Assuming you can answer questions 2, 3 and 4 positively, pay per click advertising can potentially benefit your business. If you answer 'yes' to question 1, you need to investigate the websites and the advertising models they operate, then assess the likely returns. If you want a hand doing this, Branch Out will be happy to assist.

Pay-per-click advertising is just what it says. You only pay when someone who sees your ad clicks on it and is taken through to your website. Google, Yahoo and MSN all run pay-per-click programmes and allow you to select the keywords which trigger your ads to be shown. They also allow varying levels of targeting, so your ads appear to the right people at the right times. The question then is, which do you choose or do you need to advertise on all 3? To help you answer this, we have summarised the key features of each search engine. This month we are simply looking at setting up accounts, not the work required to maintain them successfully.

Google

Google has around 50% of the market and you can advertise in a variety of formats (video, image, mobile, local and text) but it is relatively complex and expensive for advertisers. However, it can deliver a large number of clicks to your website and, by setting an affordable daily budget; you can ensure your costs are controlled. What you won't know is where your ads will be ranked as Google uses a formula which combines your Cost/Click (bid) with your Quality Score (various factors, including click through rate) to determine your position.

To help you get started, Google has created a Starter account, which gives you much less flexibility (1 advertisement for 1 market) but offers a useful introduction for new advertisers. It costs £5 to open an account but it is free to upgrade to a Standard account.

The Standard account allows you to create individual 'campaigns' and 'ad groups', giving you the flexibility to target different products at different markets. You can also set the 'landing page' (the actual page which the visitor arrives) for individual keywords to ensure they arrive at the most relevant part of your website.

Yahoo (formerly called Overture)

Yahoo receives less traffic than Google and the clicks tend to be lower cost. However, the Content Network can be low quality as a number of the network partners resell to their own networks. The ad formats on Yahoo are limited to text and banner ads and the position of your ad is fixed according to the bid you set. Like Google, you only pay £0.01 more than the person below you but, because you can see your competitors' bids, there is considerable scope for 'bid jamming' where you deliberately push up other bidders' click costs.

When you set up a Yahoo account you need to pay a deposit of £60, which covers your initial click charges. You will then need to deposit further money, either through their auto-billing system, which then allows you to set a daily budget, or their 'continuous traffic' system, whereby your ads are displayed for all relevant searches.

Yahoo also runs two systems for advertisers. The Self-Service option is free of charge and allows you to set your bids and advertisements, as well as choosing appropriate keywords. There is a spreadsheet available to help advertisers upload ads in bulk but it is time-consuming to set up a Yahoo campaign. All advertisements are reviewed by the Yahoo team and this can take up to 10 days. This can be frustrating and ads are sometimes rejected for no apparent reason. The explanations given can be slightly confusing and the appeals procedure for contesting decisions can be frustrating.

Yahoo's Fast Track option costs £79 and gives you access to a member of the Yahoo editorial team. This managed solution will ensure that your ad campaign is live within 3 days. However, the cost simply covers the set up process.

Microsoft adCentre

Microsoft launched their new advertising service late in 2006. The interface looks good but, as with every new system, there can be glitches. The clicks are relatively cheap and, although the traffic volumes are relatively small, the quality is generally good.

The bidding system is similar to Google's and it is relatively easy to port an existing campaign into adCentre. The rapid review process means that campaigns should then be live within a few hours.

The 3 search engines described above capture the majority of the online market but a number of smaller search engines also offer advertising services. However, the traffic quality can be poor and there is a much higher risk of fraud than in the mainstream campaigns. Advertisers need to monitor their campaigns closely and be prepared to demand a refund if they spot large numbers of visitors who click an ad and then leave their site instantly.

We hope our overview of the pay-per-click advertising market has been helpful. If you would like us to explain any of the points in more detail or you have a question about setting up and running your own campaign, please call Kate on 01608 737653 or email kate.barlow@branchout-internetmarketing.com for free, confidential and independent advice.

Kind regards,

Kate Barlow

You may copy or distribute this newsletter as long as this copyright notice and full information about contacting the author are attached. The author is: Kate Barlow of Branch Out Internet Marketing, The Old Co-Op, High Street, Hook Norton, OX15 5NF, UK. Contact kate.barlow@branchout-internetmarketing.com or Tel: 01608 737653, Fax: 01608 737653.

Our subscriber list is confidential. We only send e-newsletters to those we understand have given their permission to receive them. Branch Out Internet Marketing never release, sell or give a subscriber's e-mail address to any party outside of the organisation without your expressed permission. Our subscribers only receive email messages that contain requested information, new monthly articles or announcements of new services.

We use reasonable endeavours to virus scan all e-mails leaving the firm but no warranty is given that this e-mail and any attachments are virus free. You should undertake your own virus checking. The right to monitor e-mail communications through our networks is reserved by us.