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Online Advertising 101: What is SEM, PPC, CPC, CPM?
Wes Schaeffer
May 01, 2023
Wes, I’d be fine if I could just get more traffic. Can you get me more traffic? Can you get me quality traffic? Can you get me quality traffic fast? Can you get me quality traffic fast and cheap?”
Good. Fast. Cheap. Pick two.
That’s life in the big city…and the small city.
But let’s look at how to generate more traffic, more quality traffic, more free quality traffic, and even quality traffic quickly by first diving into what the words and acronyms mean because…
Words mean things.
Two Things To Master Before You Pay For Online Advertising
It’s great and wise to be knowledgeable and efficient when it comes to how you spend your hard-earned money on various online advertising campaigns but you need to be clear on two things.
Who is your ideal client and where do they hang out?
How will you convert those visitors to leads?
Developing Your Personas
The strongest buyer personas are based on market research as well as on insights you gather from your actual customer base (through surveys, interviews, etc.).
Depending on your business, you could have as few as one or two personas, or as many as 10 or 20.
(Note: If you’re new to personas, start small! You can always develop more personas later if needed.)
What Are Negative Personas?
Whereas a buyer persona is a representation of an ideal customer, a negative—or “exclusionary”—persona is a representation of who you don’t want as a customer.
This could include, for example, professionals who are too advanced for your product or service, students who are only engaging with your content for research/knowledge, or potential customers who are just too expensive to acquire (because of a low average sale price, their propensity to churn, or their unlikeliness to purchase again from your company.)
How Can You Use Personas?
At the most basic level, personas allow you to personalize or target your marketing for different segments of your audience.
For example, instead of sending the same lead nurturing emails to everyone in your database, you can segment by buyer persona and tailor your messaging according to what you know about those different personas.
If you take the time to create negative personas, you’ll have the added advantage of being able to segment out the “bad apples” from the rest of your contacts, which can help you achieve a lower cost-per-lead and cost-per-customer (and see higher sales productivity).
When combined with the lifecycle stage (i.e. how far along someone is in your sales cycle), buyer personas also allow you to map out and create highly targeted content.
How Do You Create Buyer Personas?
Buyer personas are created through research, surveys, and interviews of your target audience.
That includes a mix of customers, prospects, and those outside of your contact database who might align with your target audience.
Here are some practical methods for gathering the information you need to develop personas:
Interview customers either in person or over the phone to discover what they like about your product or service.
Look through your contacts database to uncover trends about how certain leads or customers find and consume your content.
When creating forms to use on your website, use form fields that capture important persona information. (For example, if all of your personas vary based on company size, ask each lead for information about company size on your forms. You could also gather information on what forms of social media your leads use by asking a question about social media accounts.)
Take into consideration your sales team’s feedback on the leads they are interacting with most. (What types of sales cycles does your sales team work with? What generalizations can they make about the different types of customers you serve best?)
How To Convert Visitors to Leads, Leads to Prospects, Prospects to Customers, Customers to Repeat Customers
There are books and conferences and certifications and lifetimes spent on this topic—and I touch on it a bit more down below in The A.B.C.D.E. Sales & Marketing System—but I’ll boil it down for you to its essence:
Enter the conversation going on in their minds. (Robert Collier)
Have a clear call to action…or no action will be taken.
Know the stages and duration of each phase of the buyer’s journey.
Track those stages carefully.
Ensure each stage is optimized.
Under each step vital, complex things must be mastered and measured such as:
Landing page performance
Do orange buttons convert better than blue?
Does a short video convert better than a long video?
Does text convert better than video?
Should there be closed captioning on the video?
How long should a split-test run?
Media buying
Pixel/retargeting tracking
101 other traffic traps
I don’t mean to scare you or dissuade you from running online advertising but until you perfect your conversions you are wasting some or all of your online advertising budget.
Two Types of Online Traffic
When it comes to driving traffic to your site there are only two ways to do it:
Free traffic
Paid traffic
Advertising (The Last Thing You Should Do In Advertising)
Print
Radio
Television
PPC / SEM
Etc.
How To Create “Free Traffic”
Is there really such a thing as a free lunch?
In 2021 the phrases “free traffic” or “going viral” elicit stronger euphoric feelings in the hearts and minds of business owners than unicorns delivering puppies to your favorite niece on her 5th birthday.
Rookie business owners (and lying content creator consultants) think free traffic is easy.
Just write a few blog posts, make a few YouTube videos, share a few pretty infographics with proper H1, H2 titles, a keyword-rich long-tail description, and accompanying alt-text for your images and watch the money roll in from the non-stop traffic you’ll generate for the next 25 years.
Your ideal visitors will find you because, why, ah…you’re you.
And you’re different.
And you care.
And you have a wonderful backstory.
And you’ve overcome a lot of adversity.
And you started in a garage like Steve and Steve of Apple fame.
And your mommy said you’re a good person…and you’re unique…just like everyone else.
Your mom was right
You are a good person and I’m sure you want to serve your market and doggone it, you deserve it.
But the same can be said of all of your competitors.
So to create free traffic to your website you must create great content, i.e. content that has been optimized for not only search engines—SEO (Search Engine Optimization)—but also the humans that are actually using the search engines to FIND YOU!
The problem with SEO is that what is considered great content today may not be considered great content five years from now.
In fact, all marketing efforts change over time because nothing ever stays the same.
Technology is doubling every 18-24 months based on Moore’s law.
That means tools like artificial intelligence, chatbots, and marketing automation are becoming more powerful faster than ever before.
Oh yeah, and marketers ruin everything, i.e. follow the money.
Speaking of money, because there is big (short term) money to be made in gaming the system, cutting corners, and taking shortcuts to get ahead of the curve, there will always be unscrupulous people who will seek and leverage loopholes to make a quick buck when it comes to marketing tactics to generate free traffic like SEO.
So DuckDuckGo, Google, Bing, and all of the search engines must constantly adjust and tweak their algorithms to close the loopholes, find the bad guys, and cut them off at the knees so honest business owners can win.
Related SEO Articles:
Related PPC Articles:
So other than accidental visitors who literally stumble across your website, you will pay in effort, time, focus, and/or money to get people to come to your site.
But if you think beyond the sale; if you realize that the sale is only the halfway point in the relationship with your prospects and clients; if you think and act to create the FOURTH sale with each customer; you’ll inspect and tighten up every aspect of your business because everything is related, interconnected, and can make or break your sale.
That’s why I call my process The A.B.C.D.E. Sales & Marketing System, and it looks like this:
As you can see, how you Attract people to your website, store, trade show booth, etc. matters.
How you Bond and built rapport with them can slow down or accelerate the sale.
Do you make it easy for Customers to give you money? I know it sounds crazy…but do you?
What kind of service after the sale do you Deliver?
Is it Delightful or frightful? Customers will return your stuff, ask for a refund, file a chargeback, and light you up online, which is the opposite of…
Endearing yourself to them.
This is where the Testimonials and Referrals come in, which bring you truly free traffic.
Get Predictable Referrals
Referrals are easier to get than you’d think, but you probably don’t think about implementing a proven plan to get them.
In the Attraction phase of your business, you must have a plan to get referrals and then work on that plan.
Ask prospects before they even buy from you that IF you deliver a great experience and IF you treat them right, and IF they receive massive value from you, would it be okay if you asked for a referral and a testimonial? This puts you on notice that you better follow through, and it creates a Moral Framework/Authority for you to ask—and —receive both a great referral(s) and testimonials from your clients.
Want to get better at this?
Listen to my interview with The King of Referrals and Networking, author Bob Burg
There are three ways to generate word-of-mouth marketing.
Architecture
Think of the “golden arches” of McDonald’s or just “We’re right across the street from Dunkin’ Donuts.”
Vegas casinos put big fountains and other structures in front of their hotels.
Can you install a huge sign, a fountain, a statue, a colorful awning, or those laser lights that shoot onto your building at night with a message like you see homeowners do for Halloween and Christmas? All of those can create a visual cue for your prospects and customers and a moving laser show taps into #2, which is…
Motion/Energy
Think of the shooting fountains in front of the Bellagio or mega concerts or the pirate show in front of Treasure Island or the street performers in Vegas. People talk about those.
If you have spotlights or those dancing blow-up figures that wave or even a TV or big screen or scrolling billboard you can create motion and energy that people notice.
It’s why restaurants sing happy birthday and have balloon artists and live music. They can also create word-of-mouth marketing with #3…
Over-deliver/Huge portions
Claim Jumper restaurants give you a piece of chocolate cake that can fill up four to five adults.
Fat Burger gives you a t-shirt and your picture on the wall if you eat their XXXL in under 30 minutes.
Monster Truck races are larger than life.
The donut shop gives you a baker’s dozen.
You give a 45-minute consultation when your customer only paid for 30 minutes.
Click the lips for more ideas on how to create word-of-mouth marketing to grow your sales for free.
Press / PR
It’s worth the time and effort to get on TV, the radio, and in the printed press. Traditional press releases are not as effective as they were in the 90s, and they are pretty much worthless for many industries.
So figure out how to get your face, voice, and name in the public arena for both visibility and credibility.
To get more free press than you deserve, check out these guest interviews on The Sales Podcast:
Media Coach TeeJ Mercer discusses how to “Become Your Own Publicist To Get Booked Nationwide“
Emmy Award-winning former news anchor Christine Haas shares how to “Get Great Press Coverage“
Alison Maloni shares how to “Breaking In The News“
SEO—Search Engine Optimization. Creating organic content that is titled correctly, labeled correctly, created with the end-user in mind, and includes properly-labeled images and videos as well as descriptions for search engines.
You’ll notice I put “free traffic” in quotations because nothing is free.
You will pay money, or you will pay with time, energy, effort, and focus to generate more traffic.
Getting good press—the right press—and putting a plan in place to leverage that exposure takes brainpower and effort.
Ditto for SEO and generating referrals.
But when you do it right and have a plan in place like my ABCDE Sales and Marketing Automation System, your one-time effort can generate results for months and even years to come.
But that’s the “free traffic.”
Let’s now look at…
Online Advertising, i.e., Paid Traffic
The Best Sites to Run Online Advertising
Google
Google Display Network (GDN)
Google Search Network
Bing (reach 66 million users that are not accessible via Google at about 71% less, according to AdEspresso.)
YouTube
Facebook
Amazon
Snapchat
Pinterest
Each of these has its own nuances and intricacies that each warrant its own blog post, which is why, if you want to get serious about this, contact me and I’ll have my team map out how we can help.
Online Advertising Key Terms
Here is a short list of the key terms you need to understand when it comes to generating paid traffic to your site.
SEM—Search Engine Marketing (paying for higher results)
Pros: Immediate results.
Cons: Results stop as soon as you stop paying, and customers may not trust a paid result as much as an organic result.
SEO—Search Engine Optimization (creating better content for your site to appear higher in search results organically or natively and addressed above)
Pros: Long-lasting results when you create content that follows SEO best practices
Cons: Can take days, weeks, or even months to see the fruits of your labor
(The image below shows the SEM and SEO results for the phrase “best iPhone cases.”
PPC—Pay Per Click
Synonymous with digital advertising. It’s a process or a method to drive traffic to your website.
CPC—Cost Per Click
This is closely related to PPC, but this indicates the actual amount of money you are charged each time a prospect clicks on one of your ads as part of your PPC efforts, which are part of your SEM efforts.
The goal is to keep this as low as possible. (PPC is just one form of paid or Search Engine Marketing traffic.)
CPM—Cost Per Mille (M is the Latin letter for “thousand,” meaning “1,000 impressions.”)
CPM is related to CPC, but instead of being charged when someone clicks your ad or link, you are charged every time your ad simply appears on a page. You would run a CPM campaign if your goal were to raise awareness or maybe test a new medium or channel, but you need to be careful with them. They can run around the clock, show your ad everywhere, and you can quickly find yourself running up a large advertising bill with little to show for it. However, as the world has become increasingly mobile, studies have shown that upwards of 60% of advertising clicks on mobile are accidental. That being the case, CPM or CPA (see below) could prove to be more profitable.
CPI—Cost Per Impression (See CPM)
CPA—Cost Per Action (You only pay when specific actions occur, such as a purchase, a web form is submitted, etc.)This assumes the “action” is beyond the click. When running a CPA campaign, you would establish goals that could be tracked and then pay (probably a higher amount than CPC) when those goals are achieved.
PPA – Pay Per Action (See CPA)
KPI—Key Performance Indicators
If you don’t know what’s important, then you either won’t start your advertising campaigns, or you’ll try to do too much and overspend until you’re broke.In all things, begin with the end in mind. That’s why I have the PBL (Process Before Login) Video and IPA (Initial Process Assessment) that begins with an in-depth analysis of what’s working, what isn’t, and what you want to achieve, and we do that before we ever log in to any CRM, ad platform, marketing automation tool, SEO program, etc.)
ROI—Return on Investment
When you invest your hard-earned dollars into anything—raw materials, staff, contractors, advertising—you do so with the expectation that those investment dollars will return and bring along a lot of “friends.”Maybe your best way of growing your revenue is to hire more salespeople or pay higher commissions to joint venture partners that will promote on your behalf. The main point is that you must track how you spend your money if you are serious about growing your sales, revenue, and profitability.
SERPs—Search Engine Results Pages
The picture above with the iPhone results is a SERP. It’s simply the page displayed by a search engine in response to your query or search and includes both organic and paid results.
In Conclusion
Search Engine Marketing (SEM) is a form of online marketing that focuses on getting visitors to websites by helping them appear higher in the search engine results or search engine results pages (SERPs).
While SEM technically incorporates both paid marketing and organic, aka Search Engine Optimization (SEO)—when people mention SEM nowadays, they usually mean paid traffic.
When your SEM is done right, you can get on the first page of Google, Yahoo, and Bing immediately and begin driving traffic to your site.
But be careful with setting your bid price and your daily budget.
You can spend a lot of money really fast if you are not careful.
Additionally, you better have a good landing page with interesting content and a compelling offer if you are to get the visitors you paid to visit your site to give you their information to help you build a list and/or buy from you.
There is no silver bullet when it comes to building your business, but at least you know the acronyms.
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