Everyone in business will know that we are in tough times, sales have slowed and consumers are watching what they spend. Businesses are looking at ways to cut costs and save money in these lean times.

Many of my clients are worried about the effect that this will have on there Pay per click campaign.  This is my advice to my clients, in my opinion the downturn in the economy will only serve to strengthen the position of paid search marketing. Just look at the benefits of PPC, quickly implementable campaigns, control over budget spends, tangible data to follow on a day to day basis. These are all positives to the advertiser, however, the most important part of pay per click campaigns, which will serve advertisers well in these harder times is the relevancy which pay per click offers.

Could this downturn in the economy bring the fall of past generation advertising channels such as television and newspaper?

In the last year the whole of the advertising market grew 4.3%, online marketing was up from 2006 38% with its marketing share in the UK up to 15.3%. I fully expect this figure to grow even further next year. To give you an example of this, AdAge magazine has reported that car maker General Motors is planning to steer half of its three billion dollar advertising budget online within the next three years. At the moment GM spends 300 million dollars on online advertising, while data shows us that nearly half of the people buying cars begin that search on the internet.

Google and TNS worked together on a study to investigate the role of the internet and particularly search in the process of researching and buying a car in the UK and this is statement taken from that study:

‘Online resources have overtaken car dealerships as the initial point of reference for car buyers – with a total of 86% of UK car buyers using online sources for research during the car purchasing process. The internet is not only used but considered important at each stage
of the purchase funnel. Used car buyers rate the internet as the most influential factor in their automotive purchase.’

Internet marketing is still a very young industry, with the majority of companies still to exploit the benefits of the channels available. I expect the growth of the market to continue over the next few years and in years to come will see internet marketing overtake the historic giants in the advertising industry.

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There have been a few negative reports of the adwords PPC (pay per click) traffic declining. The economist has taken this as beginning of the end for search engine giant, Google. Even our own SEO team have been citing the competition of social media sites drawing traffic away from search engines, and more specifically sponsored links.

I for one see this negativity as scare mongering. Admittedly the growth of sponsored link traffic may have slowed and even reached a plateau for a short while. The complete stats for the first quarter of 2008 show a 3% increase. A positive growth, not a decline and there are far too many external factors to consider before sounding the death knell of PPC.

In the current economic climate the trend of general consumer spending has been declining, and for a marketing platform that is so well placed to target consumer sale PPC and sponsored links are sure to waver.

Sponsored links, as with all forms advertising , are tied very closely to consumer spending. If people are not looking to buy then why would they pay attention to, or use advertising.

Traffic on the internet will continue to increase, that will include search engines, social media, commerce and entertainment sites, but unless those users are looking to spend, it is likely that sponsored link and ad words traffic will appear as less of a proportion traffic as a whole. When the public confidence returns and people get back on the internet with their credit cards sponsored links are sure to gather a higher proportion of traffic again.

In the mean time, using pay per click marketing should be managed appropriately and in line with the returns available. After all one of the worst offenders for reducing the traffic through pay per click ads will be poorly targeted ads that create the belief that the links are not relevant to the search made. The only real way to profit from pay per click advertising is serving relevant ads to those who are interested.

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