PPC advertising costs rise
The cost to businesses of using paid search placement is on the rise, according to a US marketing firm.
A study by Oneupweb suggests that inflationary pressures and higher competition in the PPC (Pay-per-click) market will continue to push up prices.
The company found that paid search accounted for 48 percent of American online advertising spend in 2007. It also found that whilst traditional media advertising increased by just 0.5 percent in 2006, paid search grew by almost one third.
Although the cost of paid search has climbed considerably, Oneupweb maintain that when combined with an organic search engine optimisation campaign, PPC still offers a better Return on Investment than most other types of advertising.
“There are really big inflation numbers with cost-per-click. It’s still a great avenue, but as more folks jump in, costs are going higher.” said Tim Kauffold of Oneupweb.
As the customer acquisition cost associated with PPC advertising rises due to more advertisers bidding on the same keyword traffic, many firms will find their online marketing budgets stretched.
“Marketers will think, ‘Why doesn’t the same dollar buy me the same volume it used to?’” says Tim.
If the upward trend in PPC advertising costs continues, we could see a growing number of companies supplementing their existing activities with natural SEO campaigns to limit their online expenditure and reduce reliance on PPC.
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