Because I work for an SEO company, I often find myself drawing comparisons between search engine optimization and pay per click advertising. The two types of advertising are both great ways for a company to improve its online exposure, but there are pros and cons to each.
First, a review of what we’re talking about here before I discuss the fraud case. Search engine optimization (SEO) is the process of improving a website design, structure and content so it will appear naturally at the top of search engine results. Let’s say you own a roofing company in Fort Lauderdale, Florida, and you want to grow your annual revenue. You might hire a company like USA SEO Pros to create an optimized site for your business. After thoroughly researching your industry, we optimize a website for your business complete with links and content specific to your business. Then when a prospective client types “roofing design in Fort Lauderdale” into Google, they would find your business!
Pay per click advertising (PPC) works in a similar fashion. Google has a bidding system for various keywords related to your industry – for example: roofing design in Fort Lauderdale. The highest bidder wins the right to that keyword and has a budget of $X.XX per month. Let’s say you want to spend $200 a month for several keywords, including “roofing design in Fort Lauderdale”. You are the winning bidder at $1.05 per click. Now, when someone searches for your keyword in Google, your site will appear at the top, in the sponsored links box. When someone clicks on your link, you’re account will have $1.05 deducted from it, until you run out of money.
Now that we know what we’re dealing with, let’s talk pros and cons. Arguably the biggest problem PPC advertising runs into is consumer avoidance. Many search engine users say that they tend to avoid the obvious advertising and marketing links. Consider how you use sites like Google and Yahoo. When you perform a search and are given the results, how frequently do you click on the “sponsored links”? That being said, PPC advertising is a guaranteed way to put your name at the top of a given search engine.
About the only consideration to make with search engine optimization is the uncertainty of placement. Even if you optimize a site, there isn’t a guarantee for a particular placement on a particular site. My company, USA SEO Pros, offers a guarantee of X number of first page placements, depending on the number of keywords you choose. We work diligently to get every single keyword into the number one spot on Google, but unfortunately we have no control over what Google does. Our clients often appear on the first pages of Google, Yahoo, MSN, AOL and others. Also with SEO, the results may take a couple of weeks to appear. It isn’t as immediate as PPC.
But the major pro that SEO offers is that you will actually see results from your advertising dollars. Whereas users may intentionally avoid sponsored links, they will likely click on the natural search engine results that appear. This means they are clicking on your links! The other nice thing about search engine optimization is that the benefits can last long after your campaign ends. We offer our clients 6 month contracts, and there are available upgrades and time extensions. But we’ve found that many times the first page placement will remain even after the contract expires. This is advertising that pays for itself many times over!
Finally we get to Google’s PPC fraud case. In 2005 there was a case named Lane’s Gifts v. Google in which Google was sued for fraudulent clicks on online advertisements. Google isn’t the only one to run into trouble for this. Around the same time, an insurance company in Atlanta discovered it was paying Yahoo.com tens of thousands of dollars for fraudulent clicks from places like Mongolia. The problem lay with search engines doing their own click monitoring, and neglecting to filter out many (obvious) fraudulent clicks. Advertisers were paying out millions to the search engines for nothing!
Google ended up settling their case out of court to the tune of $90 million. Of course that is a mere pittance when scaled to Google’s profit, but the real insult comes in the form of payment. Advertisers who were scammed must first submit a claim which Google was to verify. Then if the claim was given the OK, the advertisers were given credit towards future advertising! The companies that lost out on advertising dollars won’t even get their money back. This type of click fraud has cost business owners millions of dollars, but there’s little incentive for sites like Google and Yahoo to clamp down. It’s estimated the PPC industry will bring in some $29 billion by 2010.
If it were up to me, I wouldn’t run the risk of being scammed with invalid clicks. I don’t advertise on the internet, and I’m certainly biased toward SEO, but if it gets results without the risk of scam – who wouldn’t be biased!
For more information on SEO, visit http://usaseopros.com
By: Zack S.
