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Does “Pay-Per-Click” Advertising Guarantee the Advertisers their expected number of new consumers?

Digital Advertising is a relatively new medium, but it has proved to be one of the most effective forms of advertising. When the target audience is chosen accordingly, digital media are a strong way to reach to a wide demographic of consumers of different ages, and young consumers in particular. Google’s famous “pay-per-click” advertising is one of the most popular and effective advertising techniques in the marketing industry. “Pay-per-click” is a technique, where advertisers pay a certain amount of fee to large search engine networks(Google) to place their ads on specific slots and get payoffs proportional to the number of clicks they get. This model has been of the most powerful and effective maneuvers in attracting consumer attention and thereby gaining a high payoff.

It might seem that as long as advertisers know which slots and bids are the best for them and generate higher revenues, they will end up getting highest payoffs. However, the consumer dynamics are liable to change and nothing is guaranteed.

Advertisers can start off by bidding high and getting the slot with highest CTR and pay a fee each time someone clicks through the ad. However, the payoff might not always be stable. In fact, the research conducted by Nielsen suggests that trust in search engine results slightly decreased from 2013 to 2015 among UK consumers, for instance.  When advertisers start abusing the trend, i.e. not updating content or making big promises that are rarely delivered, consumers lose trust and stop clicking on the ads.

Hence, paid search, such as engine optimization or pay-per-click is not necessarily a direct pathway to increased revenue and successful advertising campaign. When attracting consumer attention, advertisers should think thoroughly through the needs and preferences of their target audience and work on including trustworthy content, in order to keep up the correct execution and avoid costly mistakes.



Which are the most effective advertising formats today?


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