This wiki is managed by Dave Chaffey of Smart Insights to help keep marketers up-to-date with developments in digital marketing

From Marketing Online

Disadvantages of paid search marketing

Reviewing the disadvantages of pay per click marketing listed will help show some of the challenges of pay per click which need to be managed for success.

In my experience, the main disadvantages of paid search which need to be managed are:

• 1. Competition. Since Pay Per Click has become popular due to its effectiveness, it is competitive and because it is based on competitive bids it can get expensive. CPC/bid inflation has led to some companies reducing PPC activity. Some companies may get involved in bidding wars that drive bids up to an unacceptable-level – some phrases such as ‘life insurance’ may exceed £10 per click.

• 2. Higher costs than other media. If SEO is effective it will almost always deliver a lower CPC.

• 3. Favours larger brands. For companies with a lower budget or a narrower range of products on which to increase lifetime value it may be not possible to compete. In the past large players have got deals on their media spend through their agencies through, for example, Google Best Practice Funding.

• 4. Complexity of managing large campaigns. PPC is deceptively simple to setup. But to compete effectively, particularly for a large campaign, requires knowledge of best practice which changes as Google and other engines introduce new facilities - see the official [PPC update blogs] from the search networks to gain an idea.

• 5. Limited reach. Not all searchers will see your ads, since the majority scan and click on the natural listings. Your ad will only reach those who are proactively looking for a product or service, but not those who are unaware of a need. Here display advertising can be used, but the paid search content networks can help here.

• 6. Click fraud. Common in some sectors. View summary of details on [PPC click fraud]