PPC advertising costs could come down

By Daniel Nolan topicIcon PPC

Dip in paid search could be good news for marketers and companies

The latest study from online market analysts Hitwise suggests that natural search is edging ahead of PPC (Pay Per Click) in its influence on consumers, with speculation that this could lead to a lowering of the latter's cost.

The report states that the proportion of visitors hitting online retail sites from PPC ads has fallen from 10.1 per cent last year to 8.9 per cent in March 2009.

"Search engines are the primary source of traffic for almost all online retailers," said Hitwise head of research Robin Goad. "A typical e-commerce site in the UK receives two in every five visits from a search engine. However, the proportion of search traffic that comes from paid listings fell [over the past year].

"Retailers are among the biggest user of paid search in the UK, so this has contributed to an overall decline in paid search rates."

PPC advertising

PPC refers to the sponsored web advertising that appears alongside natural results in search engine listings. Marketers bid on how much they are willing to pay every time a user clicks on an advert, with the highest bidder being placed at the top.

"It will be interesting to see if paid search prices are affected by this dip in traffic," said theEword's online marketing manager Mark Baker. "PPC is all about getting the highest number of conversions for the lowest possible price, so any suggestion that costs are going to come down will be welcomed by businesses."