John Wanamaker (1838-1922) is credited with the saying "Half the money I spend on advertising is wasted; the trouble is I don't know which half". PPC (Pay per click) programs like Google AdWords resolves the Wanamaker dilemma.
The Wanamaker dilemma being that traditional advertising of the time like newspapers, billboards yielded positive sales results but it was never clear as to which particular ads and media outlets and times worked best. In other words, it was hard to precisely find out if your Ad in the weekday newspaper was more effective compared to the weekend newspaper to get customers to visit your store. Sure, you could ask every visitor to your store and they would tell you as well as they could remember where they had seen your ad.
In the 20th century, carefully selected consumer panels provide data about ad viewership and fairly good estimates of actual retail sales that you could attribute to offline advertising campaigns. However, if you had several campaigns going across different media you would be paying for the advertising and be stuck with the Wanamaker problem of not knowing which media or ads were working. In addition, the newspaper, radio or TV station asked for payment for putting your ad in and offered you solace by way of estimates of audience. Once again you paid up and hoped that your marketing thinking was in order and you had nailed the target markets correctly and your media choice, ad agency creative were all in perfect alignment. If half the advertising spend worked it was fine.... you reasoned.
When it comes to PPC (Pay per click) programs like Google AdWords.... this fundamental problem of traditional advertising is resolved. Watch the first 2 minutes of the Google AdWords video on YouTube to get a sense of the program.Here is how the Wanamaker dilemma is resolved:
- You pay for only those ads that customers click on. You do not pay for impressions or views which is how traditional offline advertising works.
- If you connect your Google Analytics and Google AdWords you know exactly which Ads resulted in which visits and how long visitors stayed on your site. You also get to know which pages they saw and if they “converted”. Conversion being defined as either placing e-Commerce orders or filling up a contact form.