Every marketer will tell you that advertising is one of the most effective ways of making your business known to new customers, and therefore - or so one hopes, generate more sales. When they hear advertising, people generally think TV, radio or newspaper... All of which are really expensive and none of which guarantee that viewers or readers will be interested in your product or service.

Being the least effective way to make your company known, traditional methods of advertising are surprisingly the most expensive. TV has an entry ticket of $65,000 (that doesn't even get you prime time and chances are that your ad will be one of those that you think was made from a mobile phone camera). For radio, you're looking at $1,600 per month on a 12 months package (you could get away with $3.600 per year but don't go there unless you feel very lucky, as your ad will only make it to the most obscure stations that no-one ever listens to). As for newspaper advertising, be ready to get blown off your feet: a quarter of a page every other Saturday in Hawkes Bay Today will cost you about $20,000 per year (the duration they recommend as being the only effective one and they should know).

Apart from their outrageous cost, what do the old fashioned ways of advertising have in common?
Simple: they absolutely do not guarantee any return at all. Why? Because none of these media can ensure that the person who is seeing your ad is a potential customer, in the mood to buy or even paying attention.

What if there was a way to ensure that people who see your company name were actually looking for what you sell? What if it cost a few cents every time rather than thousands of dollars? Even better, what if you only had to pay when someone actually chose to look at your ad? And how about being able to get actual statistics and feedback on your campaign, measure its effectiveness objectively and accurately? Too good to be true? Not at all: it's called Pay Per Click (PPC) advertising.

This is how it works: You buy 'ad words' from a search engine like Google, Yahoo or Bing (to name the biggest). When someone looks up those words on the internet, your ad comes up at the top of the page (against a yellow background or on the right side in Google). If (and only if) they click on your ad, your account is charged. If they ignore it, the user has still seen your name (just the same as a newspaper ad) and it doesn't cost you a dime. Amazing.

Even better: you get thorough statistics and feedback on the more popular words, where the clicks came from, which day and even time of the day they were generated, associated searches... Which means that you are able to modify your campaign as it runs. In short, you only end up paying for what earns you money. The icing on the cake is that with these campaigns, you're completely in charge of your budget.

The trick? The 'price' of each word is based on competition – a bit like in an auction. This means that in a highly competitive market (financial services seem to come on top these days) a search word could cost you not cents but over 50 dollars (per click!).

The good news is, such campaigns can be targeted locally, so you don't have to compete against American giants (unless of course you want to). The other good news is that most New Zealand businesses are still to catch up on the trend, so starting you own campaign now would give you a definite advantage.

How do you go about it? Most search engines (Google, Yahoo, Bing) have their own PPC scheme, with slight variations in the way the campaigns are setup and run. Yahoo, for example, will let you know how much you need to bid to be on top, whereas Google lets you find out through trial and error (although you will be able to get an estimate of the total campaign cost). Facebook also have their own ad scheme, which is also Pay Per Click. Facebook is able to target your ideal audience even better than search engines, as they have direct access to people's likes and dislikes.

If you feel confident enough, you don't need to hire an agency or consultant to set up the campaign for you (i.e. choose the words that will generate better results) but it's always an option. Search engines that let you buy ad words provide comprehensive help and tutorials so anyone can get the gist of it by investing a little bit of time.

There is one extremely important thing to keep in mind though: however well designed your PPC campaign is, it only leads people to your website. If you're selling directly from the internet, the clicks will quickly convert as sales (provided you are selling what you advertised for, people can find it easily and your prices are right). However, if it's a service you're selling, beware that your website needs to be appealing to prospective customers, or your ad word campaign will be for nothing.

In conclusion, compared to old fashioned media, PPC is not only more efficient but it's also a cheaper way to increase your sales or attract new customers. However, unlike simple ads, it needs careful preparation, monitoring and ongoing work. If you'd rather spend the money than the time, there's some good news for you: hiring an agency or consultant will still cost less than a few ads in the local paper!