PPC : Why use PPC if you’re losing money?

   As bizarre as it may seem, many PPC advertisers are losing money on their
ads. How can that be possible? The following are real quotes from real companies
using PPC, explaining why they use PPC despite the fact that the PPC
campaigns are losing money:

- “I know we’re losing money on PPC, but I’m under pressure to provide
   leads.”
- “Well, we’re not really sure if we’re making money on PPC or not.” (They
   weren’t.)
- “We experimented with PPC last Christmas . . . sure, we lost money, but

   we’ll probably try again this Christmas, too.”

- “It doesn’t really matter if we make money directly; this is ‘brand’ advertising.”
   (I talk about brand advertising in Chapter 3. Suffice it to say that
   brand advertising is often — perhaps usually — a good way to lose
   money.)
- “No, we’re not making money right now, but we will just as soon as we
   improve our conversions.” (The term conversions refers to the process
   of converting visitors to customers, and the last time I spoke to these
   guys, they were still a long way from fixing this problem.)


The fact is, despite the hype — to some degree because of the hype — many
people working with PPC are losing money doing so. Some are in the process
of finding out if PPC works for them and either will stop when the pain gets
too great or will experiment and figure out a way to make it work. Others
have a much higher pain threshold and are willing to lose large sums of
money because they’re caught up in the hype and know that PPC must work,
if they can just figure out how! Or they really don’t care much either way; PPC
costs are just a small part of a large marketing budget.
Sometimes, spending money on PPC and taking a loss can make sense. PPC
can be used to test your site and to test keywords very quickly. You can turn
on a PPC campaign, watch for a day or two, and get a feel for how things are
going — what people do on your site, how well the site converts visitors to
buyers , the difference between people who had searched on
keyword A and keyword B, and so on. PPC can be used as a clearly measurable
system for testing and improving what happens on your site and for
picking keywords .
Now, just because PPC hasn’t worked for you doesn’t mean you should stop
and never try again. But if you do try again, there has to be a good reason. As
a good friend, Joe Sabah, likes to say: “If you do what you’ve always done,
you’ll get what you’ve always gotten.” If PPC fails, you’d better figure out why
and do something to resolve the problem, rather than just banging your head
against the same wall.
Reality is, PPC might work, and it might not. . But the ultimate test is, of course, to try it.
But be realistic, and test carefully.