One of the most important decisions facing
online companies rests in deciding how to
allocate minimal marketing funds. Inevitably,
startups need to determine whether organic
search engine results or pay per click advertising
will prove more beneficial to their bottom
line.
Given the relatively small budgets with
which online startups typically operate,
deciding how to spend marketing dollars
can be a daunting and frustrating task.
Often, the question of whether to engage
in pay per click advertising or rely upon
organic search engine results for hits
proves to stir the most heated arguments.
Indeed, both tactics have advantages. Therefore,
understanding a company’s relative
importance within its marketplace is critical
when making this marketing decision.
Typically, when a website
is initially online, any hits tagged on
the URL originate
from organic search engine results. Thus,
for example, a company that sells stationary
over the internet, may find that some of
its hits come from internet users who go
to Google or Yahoo and search for "paper
retailers." When a user arrives to
a website without the aid of an ad or sponsored
link, a hit driven by organic search engine
results is said to have occurred.
However, in the world of modern online
marketing, organic search engine results
prove extremely weak when driving users
to a relatively unknown site since a general
search for “paper retailers” is
likely to bring up the largest online companies
first. Therefore, startups increasingly
rely on pay per click advertising to drive
online business. Nearly all major search
engines provide customers with pay per
click advertising options. Typically, these
programs allow online business to, in effect,
bid for their position on a search result.
Thus, a company who bid, for example, $5.00
for every click through on a search of
the word “stationery” would
be listed higher than one who bid only
$3.00 when a user searches for the keyword.
Regardless of the strategy with which
a company chooses to market its services,
small businesses are encouraged to use
pay per click advertising to build business.
Startups who choose to rely on organic
search engine results will likely witness
both low traffic and low sales since they
will be competing against much larger companies
for attention online.
The decision of how to most effectively
use marketing dollars is a critical decision
for nearly all online companies. However,
understanding the relative importance of
an internet business versus its competition
will help determine the advertising options
that can provide the greatest returns to
a company’s site and, in turn, its
bottom line.
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