Why Pay-Per-Click Advertising ‘Does Not Work’ For Beginners

As an online marketing agency we get a lot of small businesses contacting us to help them make money on the Internet. One of the core services we offer is PPC setup and management, with a focus on Google Adwords. Yet one of the most common statements we hear is:

“I’ve already tried pay-per-click advertising and it doesn’t work”

Immediately this sounds warning bells, as PPC advertising is one of the most profitable methods of advertising available (in fact, we’ve been able to generate more than 1,000 sales per day for some companies using PPC advertising).

After further questioning we find out that they have setup a Google Adwords campaign themselves (because Google makes it so easy) and have invested $500 or $1,000 in advertising, only to find that they could not achieve any results… and based on this they say PPC advertising doesn’t work!

Maybe it is because of the common misconception that ‘it is easy to make money online’. We’ve been hearing this for years now, and I admit that was one of the reasons I started in the online game… but I was wrong, even in the very beginning. Now, after many years in the online game I understand why it is difficult to make money online, and why it will become harder in years to come.

When you market on search engines, like Google, you have to be on the first page to be noticed, and that’s where the challenge lies. There are a maximum of 10 paid positions available to the entire country. That means that from all the advertisers in the country, only 10 can hold a first page position. That means that only those advertisers which know what they are doing can afford to compete in a market where the top positions are dominated by clicks of that cost between $2 and $7 per click.

That’s why you need to work with a professional if you’re serious about succeeding in the online game, because a professional knows how to work with your current advertising budget to get the most out of your advertising spend.

And nine times out of ten, when we do take over a PPC campaign that was setup by a beginner, we find the following mistakes nearly every time:

1. Not enough keywords being used – identifying the most profitable keyword phrases first requires that you build a keyword library of all of the possible keyword phrases that somebody who is interested in your service would type into Google. Most beginners use only 20 or 30 keywords in total, where the minimum for most small campaigns should be 1,000 to 2,000 keyword phrases.

2. Incorrect use of targeting – using exact match, phrase match and broad match correctly will increase your positioning and decrease your average cost-per-click (CPC).

3. Poorly constructed text ads – writing effective text ads, utilising proven marketing principles, will increase your click-through-rate (CTR), improve your quality score and, in turn, decrease your average CPC.

4. Not split-testing text ads – the only way to tell if one text ad is better than another is to split test those ads, track the results and identify which combination of words produced the best results.

5. Not geo-targeting campaigns – geo-targeting, especially for a service company is critical in getting maximum ROI from advertising spend. The last thing you want is to pay for website visitors which are in locations that you cannot service.

6. No continual optimisation – the hardest month for PPC advertising, and the lowest ROI, is in the first month, because it is during this month that you are experimenting to identify the keywords which produce the most profits for your business. Done incorrectly, the first month can cost thousands of dollars with no results at all. But once the ‘money words’ have been identified, continual bid management and optimisation is required to increase ROI from the monthly advertising spend.

7. Conversions are not being tracked – tracking conversions is the most important factor in PPC advertising, because this is how you measure the success of all of the previous 6 points in the campaign. Most importantly, when you track conversions at the keyword level you can increase spend on the keywords which are producing results and decrease spend on the keywords which a not producing results, increasing your ROI.

Without implementing ALL of the above points efficiently and with expertise it is virtually impossible for a small business to compete in an increasingly competitive online market place.

In the last 12 months we have seen the cost of PPC advertising increasing steadily, with the competition in some markets so fierce that the average cost-per-click (CPC) more than doubling in the last 12 months.

Pay-per-click advertising is rapidly becoming a marketing channel dominated by online marketing experts. When a beginner tries to run a PPC campaign on their own, competing against seasoned professionals, their budget is quickly burnt with no results to show for it. And now that the cost of a first page PPC listing costs a minimum of $2 to $7 per click how can a beginner afford NOT to use the services of a professional to manage their PPC campaign and minimise their risk?

Alex Cleanthous

Alex Cleanthous

Chief Innovation Officer at Web Profits

Alex Cleanthous is Chief Innovation Officer at Web Profits. With more than 10 years experience in online marketing, Alex is always on the lookout for smarter, faster and more scalable ways to achieve maximum growth with minimum spend.


  1. John says:

    We are a victim in the online PPC marketing too though we are able to provide a good translation service to the client from all over the world. I’ll keep watching the details and considering to employ professionals on this field.

    April 11th, 2008 at 2:40 am

  2. Alistair says:

    I am new to all of this and must compliment you on your fine article as it is spot on to my findings so far. How much would it cost to get a proffessional to deal with this for me?

    April 11th, 2008 at 1:22 pm

  3. Elizabeth says:

    I’ve seen this many a time as well, once even with a friends who set up his own account. He was eternally grateful to let me go in and help him since he had violated every one of the rules listed above.

    April 11th, 2008 at 2:07 pm

  4. john says:

    Hi Alex. You have hit the nail right on its head as we have also experienced the same problem with our customers and have been advising the same things over the last few years and its a pity that still not many companies are using professional SEO companies to run their campaign, only if they knew the difference in results… Most small business owners like to try ppc campains on their own and 80% of them get fed up due to lack of expert knowledge in this highly specialized field and then they feel that they are not achieving good results before they engage a professional to run their campaigns.

    John Singh

    April 16th, 2008 at 8:20 pm

  5. Liposuction says:

    You have given wonderful and indepth information about what is ppc. Even though it is leading in the seo market but it will work only if is done is correct process. Thank you for the great information.

    May 27th, 2008 at 5:21 am

  6. Global Resorts Network says:

    Hi Alex,

    Yes, you are right.
    Even I too agree with you.

    It’s good that you have mentioned the mistakes that usually people do as a newbie.
    This helps them to stop repeating the same mistakes.

    June 7th, 2008 at 6:25 am

  7. Aki says:

    Great infomation, thank you much

    December 17th, 2008 at 12:28 pm

  8. Lee says:

    I’ve just signed up to yahoo for £1 a day (00.5 per click) as a trial run, thanks for the advice.


    January 17th, 2009 at 7:15 am

  9. AdvertisingPH says:

    i think that pay per click does’nt work for everyone but for some it works great I think SEO would be the best affordable advertising, investment

    February 9th, 2009 at 8:17 pm

  10. SEO Manchester says:

    As a fellow online marketing professional I would like to give you a big thumbs up for this article, we look after a number of clients pay per click accounts many of which did try unsuccessfully to manage on their own previously.

    It responce to the comment from AdvertisingPH, I think it completely depends on the company, their website and their market. Like pay per click SEO doesnt work for everyone and pay per click offers very quick ROI.

    Thanks Again for the post, john.

    July 23rd, 2009 at 2:36 am

  11. Victoria says:

    I’m so glad I found this article. Our company was thinking of doing a PPC advertising but then I decided to google “Does Pay-Per-Click Advertising work”? and found this article.

    October 14th, 2009 at 5:12 am

  12. sammy says:

    I saw Your Website & read your articles, very usefull meanings for 7 Tips For CFA Success – article is very nice

    December 13th, 2009 at 4:49 am

  13. Danny says:

    Great advice, Alex…

    I have been asking myself the same thing lately…

    What advantage would there be in investing money in a PPC campaign, if the individual or small business are not sure how to properly manage(monitor) their campaign…

    Though this post is a little old(it’s now jan 2013) there is also a steady increase in the cost of running PPC, and many people say this is due to the “bidding wars” that target high quality keyword search terms, that then push the cost of a click through the roof…..

    January 3rd, 2013 at 1:41 pm