The fastest way to generate relevant traffic to your site is with PPC – this is the only way to guarantee that you get website visitors who are genuinely interested in your product or service. It is also the fastest way to burn through a marketing budget, and many businesses struggle to see a positive return on investment with it.
Several businesses we have spoken to over the years are convinced that PPC, especially Google’s AdWords, provides no real value to a business. Whenever we are confronted with such concerns, we like to provide examples businesses that are successfully using AdWords. This week, such an example landed on our desktop in the form of Priceline.
According to a report on Tnooz, the leading travel, tourism and hospitality magazine, Priceline spent $3.5 billion on PPC in 2016. No, you didn’t read that wrong – $3.5 billion (around £2.8 billion). To put this into perspective, the “Big Six” UK energy companies made a combined profit in 2013 or £2.8 billion – Priceline’s digital marketing spend is as much as British Gas, EDF, npower, E.ON and Scottish Power’s annual profit.
HOW DID PRICELINE SPEND ITS MONEY?
The Priceline group includes popular websites Booking.com, Priceline, Kayak, Agoda, Rentalcars and Opentable – these brands are included in the overall marketing spend of $3.5 billion.
Priceline brand advertising accounted for around 10% of the total budget, at $296 million. The huge increase in spending was on “performance advertising”, which was 25 times more than its considerable investment in software and IT. Overall for 2016, Priceline’s revenue was $10.7 billion, which shows that with the right business model, the more you spend on advertising, the bigger your profits will be.
PPC CORE TO MARKETING STRATEGY
Dan Finnegan, Priceline’s CEO, explained to shareholders and analysts that core search engine marketing (PPC) is “still an important” part of its overall marketing strategy, despite the rapid growth of social media marketing in recent years.
Priceline’s biggest advertising channel is Google, specifically its AdWords PPC platform. Finnegan commented that he is “pleased with the results we’re seeing there”.
However, Priceline is not actually leading the PPC expenditure wars – Expedia spent $4.3 billion in advertising in 2016, an increase of almost $1 billion. With these kinds of huge investments in digital advertising, we can be sure of one thing – it works!
OPTIMISE AND TEST
When PPC is not done well it will quickly burn through a marketing budget without providing any significant leads or sales. To work well, PPC campaigns need to be carefully managed, with ongoing analysis to ensure that the campaign is optimised to honed to ensure that budget is not wasted on clicks from readers who are not interested in purchasing. This is why hiring an experienced PPC consultant quickly pays for itself.
If you want to learn how PPC can help grow your business, speak to a PPC consultant at FSE Digital today. Don’t worry, we won’t expect you to spend £3 billion, at least not in your first year.