PPC is growing up

October 30, 2007 @ 5:29 pm · Filed under Commentary

Steve Rubel initiated a discussion on his blog recently with a prediction about a looming PPC recession. According to Rubel, these are the five reasons that the PPC market will cool:

  1. Clutter
  2. Declining Relevance of Traffic/Transition to Cost Per Action
  3. Rising Costs
  4. Marketers Using Different Ad Formats (video, social marketing)
  5. Search Ads Are Viewed as Untrustworthy

I don't agree with Rubel's prediction. PPC has some maturing to do, but Forrester Research has forecast a rosy future for PPC: Interactive marketing spend in the States will grow to $61.3 billion in 2012.

Clutter will decline as marketers get better at PPC and PPC engines get better at detecting relevance. 

"Traffic is becoming irrelevant unless it results in action." This has always been true. Smart marketers are getting better and better at targeting just those searchers who are in a spending mood. Click fraud detecting technologies will continue to improve. Search engines moving to a Cost Per Action model have a steep climb ahead: if a company's fails at converting traffic, how will these engines reap any revenue?

Rising costs are due to marketers throwing client money at PPC without refined tactics. Smark PPC marketers have been going after long tail keywords for years, and this is a positive trend that will continue. 

Marketers can and will start using blogs, video, and social networks as advertising platforms. The existence of other options doesn't detract from PPC. Some will fail miserably at YouTube promotion, and find the waters of PPC a little more friendly. Variety is good for everyone–advertisers and users alike. (And, this will help with the ad clutter issue.)

Yes, search ads do suffer from a perceived untrustworthiness. That's nothing new. Google et al have work ahead to clean up this image, but in the meantime, fortunes will be made with PPC.

PPC is growing up, but it's not going away. 

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