Pay Per Click and Display Ads

by | Jul 25, 2011

Before we jump into the discussion between PPC and Display ads, let’s review what they are. Below are very simple definitions of each.

Pay-Per-Click (PPC) – Paid links are shown on search engines and are ranked according to a variety of factors including but not limited to bid, keyword, landing page, and age of account with search engine.

Display – Paid advertisements are shown on websites based on a specific theme of keywords that are matched to the hosting website’s topic. Display can be text, image, and video ads.

Why PPC Costs More Than Display Ads
PPC and Display ads are priced very differently. In most cases, PPC is more expensive on a “per click” basis. Meaning, when a user clicks your PPC ad you might pay $2.50 for that click, but a display ad might only cost $0.50. The reason for the drastic difference in price is because of the advertising real estate available on a search engine is much less than the real estate available all across the websites on the internet.

Example: If 1,000 advertisers want to advertise their product when someone searches for the word “red shoes,” then the bid price will be high for that keyword because the demand is higher than the supply. However if those same 1,000 advertisers wanted to show a display ad of their product when someone was looking at a website with shoes on it, it would cost much less because there are millions of pages that contain prime advertising real estate for that display ad.

Choosing PPC or Display Ads
Knowing whether your business needs a PPC campaign, a display ad campaign, or a combination of both depends on the focus of your marketing agenda. If your business is interested in branding and getting people familiar with your company’s name then display ads will prove to be a strong branding platform. However, if your business is only focused on selling product then we would recommend you only do a PPC campaign.

Example: Company A has $100 to spend on marketing, but they are really concerned that for every $10 they spend they need at least one sale. Company A should go with PPC.

Example: Company B has $100,000 to spend on marketing and they want to directly compete with a local business that also sells the same kind of products. Company B should go with display ads and PPC because their budget is large enough to contain both branding from display ads and direct sales from PPC.

Transformation Marketing is a marketing company in Lincoln, Nebraska. We nurture companies from seed to tree via internet marketing.

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