Whether you call it pay-per-click (PPC), cost-per-click (CPC) or just plain old Google Adwords (not that Adwords is by any means the only paid advertising platform of this type), research from a YouGov survey reveals that only 18% of businesses actually manage to recoup the cost of their PPC campaign, let alone make a profit. But why? Is PPC no longer an appropriate strategy? What has changed to lessen its effectiveness?

Is PPC advertising dead?

Few would deny that organic SEO is the most effective means of generating a high ranking website and a decent amount of traffic, especially in the light of Google’s latest major updates such as Panda and Penguin. But for many years a popular approach when launching a new brand, a new business, a new website or even a new product or service has been to give it an initial head start by launching a PPC campaign.

But whilst long term PPC campaigns have never been overly recommended, today they seem to be taking short term PPC campaigns with them too. If only 18% of businesses even recover their costs, something is going wrong. But what is it?

I think that there are two main answers to this, and two main reasons why, if not dead, then at least PPC, is dying out.

Firstly, there are a huge number of people who never even see things such as Google Adwords advertisements, sponsored listings and PPC adverts. Such as me. I can’t recall the last time I saw one. Why?

Because like millions of other people sick of seeing their search results littered with advertisements, I installed a free ad-block addon to my web browser. This is a simple addon that takes a couple of seconds to install, after which you need never be bothered by another PPC sponsored listing, advert, flashing banner, or blocks of advertising links again. Websites look so much cleaner, so much easier to read, search results are actually helpful and relevant, and the internet becomes a better place!

I know I’m not alone: Over 13.6 million people using Mozilla Firefox have installed this addon, along with 7.4 million Chrome users, and similar addons are available for Internet Explorer, Safari and other popular browsers.

I think the point here as well is that the very people savvy enough to actively seek out and install an ad-blocking addon are the very same people most likely to be using the internet to research products and services and place orders, because they’re more net savvy.

But I think the second reason why PPC may be on its last gasp is because of the way the web has changed in recent times. We’re more social. With Facebook ‘Likes’ and Twitter retweets, replies and hashtags, with open, accessible and personable brands, and with consumers becoming the marketing power behind successful brands, today online advertising is about engaging with customers, about creating brand loyalty, trust and transparency.

Advertising methods which use platforms such as Facebook and Twitter offer more creativity and originality, more effective ways of targeting your audience, and more ways of creating real relationships with customers.

PPC doesn’t encourage brand loyalty, it doesn’t provide transparency, and it doesn’t even attempt to create a relationship with customers. It’s about flashing a quick fix solution at a rather loosely defined target audience, with affordability the dominating factor, rather than quality, or even honesty.

It’s window shopping for the superficial, and this is perhaps why businesses may well be better off investing their PPC campaigns in social media based advertising such as Facebook Ads and Twitter Promoted Tweets, rather than a form of advertising which millions of potential customers will never see, and most of the rest will ignore.

What do you think? Do you believe PPC advertising is dying out? Have you stopped, or reduced your use of PPC? Are you one of the 18% of businesses which has actually seen any kind of success with PPC? Share your thoughts and experiences below.