When I talk to business owners about local advertising online, I often find that they are overwhelmed and confused by the alphabet soup of: PPC, CPC, SEO, SERP, Twitter, Facebook, social marketing, search marketing, organic search and more. paid advertising.

In this article I will try to clear up this confusion and lay out a course of action that makes sense and works.

keeping it simple

In the end, you can eliminate most of the alphabet soup by dividing your options into two main categories: “Paid” and “Unpaid.” In this article we will focus on the pros and cons of the “paid” half of the equation.

Online Paid Local Advertising

While there are literally dozens of different ways to spend money on paid local advertising online, the most relevant, effective, and easiest to implement is pay-per-click advertising.

Pay Per Click (PPC)

Originally pioneered by Yahoo through its Overture program many years ago, pay-per-click (PPC) advertising today is almost universally synonymous with Google AdWords in the same way that Kleenex is synonymous with tissues. So, since all systems work the same way, we’ll take a look at the “fat dog,” which is AdWords.

How it works: search-based PPC

Every time you search for something on Google, you will see up to three paid ads at the top of the SERP (search engine results page) and up to 10 ads on the right side of the page. These are AdWords ads, and as the name pay-per-click suggests, you are charged a fee every time someone clicks on your ad, whether or not they take any action.

While, like all things Google, the exact formula that determines which ads are shown and in what order is a closely guarded secret, our testing and research has shown that the following variables are extremely important:

• relevancy of the keyword the advertiser is bidding on with the search term
• the click-through rate (CTR) of the ad
• the quality of the page linked to the ad
• how much the advertiser is willing to pay per click.

Pros and cons of search-based PPC

A great advantage of pay per click is that in a matter of hours you can create a Google AdWords account, create an ad and, if you are willing to spend enough money, be on the first page of Google search. A second big advantage is that if you know what you’re doing, you can create highly targeted ads that will only show to the exact demographic you’re interested in targeting.

The drawbacks of PPC are considerable. First, PPC rates have skyrocketed in the last five years. For example, just a few years ago, you could buy ads for the keyword phrase “Chicago Sales Training” for just over $1.00 per click. Today, each of those clicks will cost you over $5.00!

Second, developing and managing a profitable and productive campaign requires a tremendous amount of skill and experience across multiple disciplines, from writing ad copy to developing high-converting web pages that meet the mysterious and ever-changing Google “quality” scoring standards.

Finally, multiple eye-tracking studies have shown that most web users (your potential new customers) completely ignore both the highest-paying listings and those on the right side of the page. So while the good news is that you only pay for those people who click on your ad, the bad news is that most of your new potential customers will never see the ad you worked to create.