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Pay-Per-Click Not Working For Small Businesses

The New York Times has released an article today that details a struggle that many small businesses have been experiencing lately regarding search marketing. As is common knowledge in the marketing world, search marketing has for a long time been a highly competitive platform. For big-budget companies using search to advertise, the competition has been nothing that they have not dealt with before. However, for the smaller businesses that have found success in the past with search, the growing competition is causing problems that many are find very hard to deal with. In the New York Times article, we hear the story of a small business manager named Tom Telford who acts as a perfect example of these new issues.

To save you from a summary of the entire article, allow me to give you the gist of what Mr. Telford told the NYT. This man started out as the owner of a small cabin rental business in Helena, GA back in 2001, and found that Google AdWords was his best bet when it came to getting the word out about his company. At the time, the results were fantastic, and the business’s budget was not getting hit hard with advertising costs. As his business grew, so did his advertising efforts and the competition. The problem was, as these grew the price of advertising in search grew as well.

Mr. Telford started finding it hard to keep up with competition, as budgeting for advertising was getting much harder. This has been happening to many small businesses lately, as more and more advertising platforms base their rates on the budgets of bigger, more financially grown businesses.

Here is an excerpt from the article, showing some information from other reliable sources regarding the impact of growing prices on small businesses.

While about 96 percent of pay-per-click advertisers spend less than $10,000 a month, according to AdGooroo, a research firm that studies the pay-per-click market, big-budget advertisers spend hundreds of times more. In the first half of 2012, Amazon reportedly spent $54 million, and the University of Phoenix $37.9 million. “AdWords can bleed many a small business dry,” said Sharon Geltner, an analyst at the Small Business Development Center at Palm Beach State College in Boca Raton, Fla.

So, what can a small business do about this issue? The costs of pay-per-click advertising are not going to be going down to where they were in 2001 any time soon. So, this essentially means that small businesses are able to do much less advertising these days. The best way for these businesses to keep ahead in the game would probably be to now work on improving the content of their ads, to make up for what they are losing. Plus, over the years there have been countless innovations in digital marketing that can help small businesses advertise in a more efficient way. I suppose if a small business wants to market with search, they will have to put much more effort into the ads that they push. However, there may be other platforms today that will prove better for small businesses than search.

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Pesach Lattin
Pesach Lattin
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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