ppc spendThe question may be “do you need to?”
I’ve argued for quite a while that it’s more cost effective to focus on the organic search results vs. paying for Google adwords or other paid forms of online marketing. However, when thinking about PPC spends around the U.S., I keep on referring to this Advertising Age piece showing how much companies were spending on PPC (pay per click) advertising per month this past June (2010). Look at the chart below and you’ll see some really outrageous numbers on online advertising. These are NOT just online properties, but BP, JC Penney and ADT Security.june 2010 ppc adwords spend with google

 

As you can see, they’re spending in the millions of dollars. AT&T Mobility spent $8.08 million in just one month for Google Adwords! The article showed the whole gamut of PPC spenders. It said there were “47 advertisers that spent more than $1 million in June; 71 that spent between $500,000 and $1 million, and 357 that spent between $100,000 and $500,000. These are direct-billed customers only, not the many thousands of small self-serve advertisers that make up Google’s long tail, a key component in its $23 billion global annual revenue.”

Now, let me think this through and make sense of this.  So, these companies are willing to spend in the millions of dollars what many small businesses are reluctant to spend even a few thousands of dollars on.  The more interesting tidbit as far as ROI is that these guys in the corporate world are also only getting the short term benefits of spending their millions of dollars. If a company spends the same on their organic SEO efforts, they will continue to get the organic traffic (and save future PPC spending; or at least decrease it significantly) once they achieve that success by being in the top ranks of the SERPs (search engine results pages). So, that $8.08 million dollars spent won’t have to be spent 9 months later. AT&T Mobility can save itself from having to do more online spending and can still rank high for the searches for “iPhone” and the like which is why they spent so much money.  Looking at the SERP right now for “iPhone”, unfortunately, they aren’t in the organic results, but instead apple (obviously), cnet, macrumors, amazon (which does their seo right!), engadget and tuaw.  Come on AT&T!

If you hired me for $8.08 million that month (or even now!), I swear you would be definitely ahead of at least cnet, macrumors, engadget and tuaw.  I promise you!  And us SEO’s never promise anything, but with that much money, I’ll definitely find a way for you to rank high for a keyword that’s searched 124,000,000 times a month in it’s many different permutations and at a low end of exactly 673,000 times  a month in the U.S.  I’ve pointed out in my “most popular searches online” research, this keyword is 90th in the world in terms of searches.

Well, it does look like there are definitely some heavy hitters out there spending above you in PPC.  So, I wouldn’t want to be competing head to head with any of these guys on a monthly basis.  Even though this information was “leaked” and some still doubt the validity of these claims, I know for a fact it’s true in terms of the Expedia numbers because I used to be in the meetings where we approved the spends in the millions of dollars.  I used to wonder why we were able to spend so much money, but it’s gotta be justified given that it’s a very strong company financially.  Check out their financials here.

It blows my mind though.  If you sincerely want to spend like that and want me to manage it, I’d be happy to do it.  I do manage a few accounts that do spend a bit of money, but not in the millions.  It can be effective…I’m sorry if I didn’t clarify that it is definitely good short term hits for a website.  And if you need that and many do, I’m happy to help.

However, there’s definitely a huge discrepancy and one that seems almost unwise.  The difference in terms of what’s spent on long term effective organic SEO marketing and what’s spent on quick short term PPC is huge.  Rand Fishkin of SEOMoz fame wrote about this in 2008 here.

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