Over a year ago, I wrote a newsletter about how I had managed to save myself $750 a month by cancelling one of the pay per click advertising campaigns that I had been running for months and months. I spent some time tracking the conversions from the advertising and found that the number of sales resulting directly from that particular campaign were minimal and as such, it was pointless continuing with it. At the time I made a point of recommending to everyone that they keep a close eye on their own expenditure and track results carefully.
Obviously I listen to my own advice and it occurred to me recently that one of my other pay-per-click campaigns may not be as lucrative as it once was. I therefore devoted some time to tracking conversions from this campaign and found that it had gone from being my main source of sales a few years ago, to now contributing hardly any sales at all. At the beginning of the month, I cancelled this campaign too and it has made absolutely no difference to my business turnover. The amazing thing is that this campaign was costing me nearly $2000 a month which is now money in my pocket.
So why is PPC becoming less effective?
It is, of course, impossible to say that PPC is actually becoming less effective and the fact is that it works for thousands and thousands of people. However, it has certainly become less effective for me and I think that the main reason is simply competition. When I first started the above campaign, there were no other advertisers offering a similar service to my own. Today there are something like ten different alternatives. This has two main effects – firstly it means that customers have a much wider choice and regardless of how good my service may be in comparison to the competition, some people are inevitably going to buy from one of my competitors. Secondly it means that the cost that each advertiser is paying for their exposure has increased considerably and this means that they have to either make more sales or increase their prices in order to make the increased advertising cost worthwhile.
The above situation is one which is likely to affect pretty much all online businesses that use PPC advertising at some point. This is why you need to get your business to the point whereby you can comfortably turn off your pay-per-click advertising campaigns (if you ever need to) and still generate sales. This means spending time now building traffic from other sources. Believe me, the time I have spent over the past few years writing articles, getting good search engine rankings, building links and gaining strong affiliates and joint venture partners has certainly been worthwhile and has made the difference between me having a profitable business today and having nothing.