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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