Advertising in search engine results – or pay-per-click (PPC) – has the potential to give you an excellent return on investment. (For those new to this, you can see why here: 10 Reasons Hotels Should Invest in PPC Advertising)

I have helped dozens of businesses use PPC for the past 7 years, am a Google-certified specialist, and personally manage over $1,000,000 in annual ad spend. From this experience, I’ve observed a few common misconceptions.

Myth: High natural search positions make PPC ads redundant

Reality: Paying for clicks when it’s likely a person would click your natural search listing may not seem logical. However, it’s important to do it for branding reasons. Ever wonder why huge corporations advertise for their own names?

They have a ‘lock’ on the top spot in organic rankings, but often purchase ads to increase the certainty that a person ends up on their site…not a competitor’s. Redundancy is good in this situation. It also gives them the ability to quickly distribute new special offers.

Myth: Set it and forget it – You’ll see the best results immediately

Reality: The best results come through continual optimization. There needs to be ongoing split-testing to determine the most effective ad copy, keywords, and bidding strategies. I have seen results improve each week for 6+ months in many cases: you don’t want to settle for sub-par performance.

Myth: Every search engine’s PPC program is the same

Reality: There are obvious similarities between the search platforms offered by Google, Yahoo, MSN, and others – but each has unique nuances. It’s important to learn even the subtle differences to get the best results.

Myth: Only Google matters

Reality: Google currently dominates between 75-80% of the entire paid search market. However, it’s often very competitive. You may get even more visitors by running a campaign on Yahoo or a less popular search engine.

Myth: Click bids are the only factor in ad rankings

Reality: There are many factors involved. Google uses quality score – a mix of ad relevance and clickthrough rates – to determine where to position ads. Bidding more may increase your ranking to a certain extent, but cash-rich companies cannot just buy their way in with a weak campaign.

Myth: The content network should always be avoided

Reality: The content network is where search engines allow other websites to display PPC ads for additional revenue. Sometimes, the click quality is slightly lower than search – but not always. Clicks are often cheaper to obtain here, and the overall cost per conversion (sale) may be lower. You need to test to find what is true in your market.

Myth: Position #1 is the most effective

Reality: It may feel good to win the auction and be on top, but that doesn’t always mean you’ll get best ROI. Research shows that positions 2-5 often have much better conversion rates. My experience confirms this.

Myth: Click fraud is too large a risk

Reality: The risk does exist, but its presence should not stop you from starting a campaign. Since their revenue is dependent on getting advertisers to use their networks, search engines have gotten smarter about detecting and preventing fraud. More importantly, there are several steps you can take to minimize your exposure to risk. Geo-targeting, analytics checking, and testing all help to prevent fraud.

Myth: A good PPC campaign will always give good ROI

Reality: Even a brilliant ad campaign will fail if your website isn’t properly optimized. A good ad campaign will only bring more people to your website – it cannot guarantee sales. I suggest you take a few lessons from ecommerce websites, and give your web booking system a makeover to turn more clicks into reservations.

Even the most careful marketing plans can lead to disaster without real market feedback. The best marketers – online and off – test different variables of their campaigns to make them much more effective and reduce the risk of failure.

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1. You can start small
It’s possible to start with just $50 (though raising this will accelerate testing and help you get a better feel of the market).

2. Success is instantly measurable
Within 48 hours of campaign launch, you should be able to determine if the campaign is a success. Either it works or it doesn’t. Conversion tracking is easy, so you can see how much you pay for each new booking. This rapid feedback is not possible for many other types of media.

3. Ad delivery is very targeted
Search engines provide a wide variety of distribution options for your ads, so you can appear to your target markets. Depending on the tactics you use, you can show ads for relevant keywords, on selected websites, or to a group with similar demographics.

4. You reach people actively searching for your product
By showing your ads to people as they search the web, you reach them at the decision making stage of the buying cycle and dramatically improve the quality of the impressions.

5. Message testing is easy
Using split testing, you can perform accurate market tests to see which headlines and ad copy pulls the best. After just a few days, you can take this knowledge, and apply it to other promotional material.

6. Instant changes are possible
Is something not working? Want to change the direction of your ad copy? This can be done with a couple clicks, and your campaign is instantly updated. There is not need to wait until the next issue or ad cycle.

7. International advertising is simplified
With a globalized world, your potential guests could be coming from 10,000 miles away. PPC makes it easier to reach people searching for hotels in your area.

8. Branding exposure is free
Even when people aren’t clicking on your ads, you still get brand exposure. And unlike traditional ad campaigns, these impressions don’t cost you a thing.

9. You only pay for results
By definition, you’re only paying for actual website visitors – but when you begin using conversion tracking, you can make sure your ad spend is actually tied to new guest reservations. This eliminates all the risk you face when considering other types of media.

10. High ROI is typical
The combination of all the reasons above usually results in highly profitable pay per click campaigns for hoteliers.

If you’re still wondering whether to try PPC marketing, I encourage you to give it a try. There’s not much you can lose.

Feel free to download this chart to help you with your hotel PPC campaign.

Image via Wikipedia

50 years ago, it would have been impossible to launch a nation-wide advertising campaign with just $50. Now, you can not only do that, but also rigorously test your message for effectiveness – and only show ads to people actively looking for a hotel like yours.

The technology making this possible is pay-per-click (PPC) marketing.  The concept was pioneered by Jeffrey Brewer and Bill Gross of Goto.com in 1998, but only started gaining popularity in 2002, allowing advertisers to show ads inside search engine results pages.  The premise is powerful: people that view your ad are already searching for what you offer.

Because of this, pay-for-performance advertising brings several very strong advantages to your promotional toolkit:

1) You only pay for results. Your investment is directly tied to the number of visitors to your website. This greatly reduces the risk of running an expensive campaign and getting no results.

2) Your campaign goes live quickly (often with 15 minutes). You can open an AdWords account to quickly test an idea or concept in the market. By bypassing the traditional ad campaign development cycle, you can enjoy first-mover advantage.

3) It’s easy to test for results. Pay-per-click marketing is very analytical.  You can track and test a number of important benchmarks and see which message performs best.

4) You can start on a small scale. With $50 (or less), you can launch a pilot campaign to determine if the format works for you.

5) You can target specific demographics or regions.  AdWords and other PPC platforms make it easy to only show ads to a highly targeted group of people or places. This accuracy helps you deliver your message to the right people.

Pay-per-click marketing should be part of a two-part search marketing strategy that includes organic optimization.  For more information, take a moment to read the differences between the two tactics.