Optimize or PPC?

I’m giving a talk on March 28, 2006 at the Northwest Entrepreneurs Network in Bellevue, WA. If you’re in the area, stop by, registration is free at this site:
http://www.nwen.org/calendar/seminar.htm
In my talk, I’ll be contrasting search marketing and pay per click. There are a lot of tradeoffs, and one’s best option in a given situation may be hard to decide. Here are some of my thoughts.
Consider the following:
• Potential for positive ROI (varies)
Sometimes you only need to look at the ROI: number of clicks, value of a click, # of signups or sales, lifetime value of the sale – to decide whether PPC, optimization, both or neither is appropriate.
Sometimes though, “joint ROI” becomes an issue. Let’s say you’re doing a direct mail campaign. Instead of calling or going to your web site, instead the mail may drive people to a search engine instead. If they don’t find you, or find a positive mention, they you may be wasting your direct mail money. In this case, you have to look jointly at the spending on the direct mail and on the search engine presence.
• Your target audience: do they look at ads? (varies)
Some people simply blow off ads, even if they are as well disguised as the ads in Google and Yahoo.
• Being found serendipitously (toss-up)
Both PPC and optimization campaigns can result in ads appearing in places where you don’t expect. It is impossible to know every term your site will be found on in a spidered engine, or what terms your ad will appear on if you’ve selected the broad match options.
• Up-front cost (may favor PPC)
Some terms in PPC can get very pricey very fast. It may be cheaper to optimize for them. However, if you have tight budget constraints, you may want to start very gradually. PPC may be the better option for you.
• Fluidity of audiences, terms, messages (PPC for more fluid situations)
If you are not set on your messages, but are in test mode, then PPC is probably better. Optimization usually requires external links, and changing them may be very hard once you’ve put them in place. Better not to do external linking work until your messages and terms are very solid.
• Amount of work needed upfront and ongoing (either can be hard)
This is going to depend on the situation. Both tools may require changes to your page text. Optimization tends to require more work up front, but unless the context or algorithms change radically, may require less work long-term. If you’re in a very competitive category of PPC, you may be making adjustments to your bids and messages each day.
• Competition in either (toss-up)
Sometimes PPC bidders are driven by ego, not a rational calculation of what a term is really worth. If you’re in this situation, you may want to just drop out. Optimization though may be difficult to impossible if the sites in top positions are government, university or major company sites with literally hundreds of thousands of links pointing to them.
Keep in mind the key drivers of positions in the engines:
a. External links
b. Internal links
c. Text on a page
d. Metatags (Title, Description, rarely others)
Sometimes all you need to do is adjust page text and metatags. Other times though, lots of work on external site links or redesign / restructuring of your site is needed.

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