Paid Search Advertising: why business owners use it, the decision making process and the advantages

and disadvantages that they ultimately see. By Donald Maclean 082619239

Dissertation Supervisor: John Sanders Word Count: 13,790

Dissertation submitted in partial fulfillment of the degree of MA (Hons) in International Management

at

School of Management and Languages Heriot-Watt University Edinburgh

March 2013

Abstract
This study has been undertaken in order to establish why small to medium business owners use paid search marketing spaces, the decision making process behind doing so and the advantages and disadvantages that they ultimately see from doing so.

This study looked at the literature surrounding the subject and established gaps in the research which allowed the researcher to establish a number of research questions. They were: 1. When implementing a new innovation what is the process that management go through at each of the 5 diffusion stages when considering PPC? 2. Why do companies use PPC advertising? 3. What advantages and disadvantages do companies see?

In order to answer these questions this study used primary research involving 64 businesses from different industries throughout the UK. Each business was asked to participate in a survey which asked them about their use and knowledge of Paid Search Advertising.

The analysis of these results and the discussion that followed drew the following conclusions.

1. A number of conclusions were drawn for the first research question:

a. In the knowledge stage, interpersonal communication is more effective than mass media communication. b. In the persuasion stage, those that are not using PPC did not actively apply the innovation. c. In the decision stage, managements expectations surrounding the benefits were revealed. d. The implementation stage concluded that training was vital in order to avoid problems. e. The confirmation stage showed that there were differences between the expected and actual benefits. It also showed the stages that organisations left the process.

2. The main reason that organisations use PPC advertising is for increasing the number of enquiries to the business, increasing traffic to the website, using PPC to gain more sales and also in order to try and reach customers globally. Other less responded answers were also given too.

3. After implementing PPC advertising the main advantages that organisations saw were an increased number of enquiries, increased sales and traffic to the website. Other advantages such as better quality of enquiry and reaching customers globally were also discovered.

In terms of the disadvantages that were seen the main disadvantages that were discovered were high costs, it was time consuming and it was difficult to use. However through the discussion it was established that many of these disadvantages could be combatted with proper training.

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Acknowledgments
I would like to thank my dissertation supervisor, John Sanders, for all his help and guidance while compiling this research. He was always available to speak to me and was always willing to give advice to when it was needed. I would also like to thank the 64 respondents who answered my survey. Without them there would have been no research and I would not have been able to conduct such an in depth analysis. Their responses have given me a wide range of interesting information which allowed me to meet the research objectives. Finally I would like to thank those that helped to test the survey before it was deployed as well as those who took the time to proofread the research once completed.

Personal Statement
I confirm that the work contained within this study is my own and any references or ideas take from other studies are properly referenced both in the text and in the reference list. I have read the SML Undergraduate Dissertation Courses: Regulations and Procedures and have understood them and taken action, where required. Finally the research within this study was subject to ethical approval which was approved and passed off by the Chair of the School of Managements Ethics Committee.

Signed Dated.

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Contents
Abstract .................................................................................................................................................... i Acknowledgments ...................................................................................................................................iii Personal Statement ..................................................................................................................................iii Contents ...................................................................................................................................................iv List of figures ......................................................................................................................................... vii Chapter 1 1.1 1.2 1.3 Chapter 2 2.1 2.2 2.3 2.4 2.5 Introduction ......................................................................................................................... 1 Introduction ............................................................................................................................. 1 Aim of this study and for whom .............................................................................................. 1 Structure .................................................................................................................................. 2 Literature Review ................................................................................................................ 3 Introduction ............................................................................................................................. 3 Small to Medium Businesses .................................................................................................. 3 Definition of Online Advertising............................................................................................. 3 History of Advertising on the Web ......................................................................................... 4 Advantages of paid search ...................................................................................................... 5 Global Reach ................................................................................................................... 5 Cost Efficiency ................................................................................................................ 5 Audience Targeting ......................................................................................................... 6 Real Time Data ................................................................................................................ 6 Adaptability and speed .................................................................................................... 6 Remarketing .................................................................................................................... 6

2.5.1 2.5.2 2.5.3 2.5.4 2.5.5 2.5.6 2.6 2.7 2.8

Disadvantages of Paid Search ................................................................................................. 7 Diffusion Strategies ................................................................................................................. 8 Rogers Diffusion of Innovations ............................................................................................ 9 Knowledge....................................................................................................................... 9 Persuasion ...................................................................................................................... 10 Decision ......................................................................................................................... 10 Implementation .............................................................................................................. 11 Confirmation ................................................................................................................. 11 Methodology ..................................................................................................................... 12 Introduction ........................................................................................................................... 12 Research Gap ......................................................................................................................... 12 Research strategy ................................................................................................................... 12 iv

2.8.1 2.8.2 2.8.3 2.8.4 2.8.5 Chapter 3 3.1 3.2 3.3

3.3.1 3.3.2 3.4

Primary or secondary..................................................................................................... 12 Quantitative or Qualitative ............................................................................................ 14

Data collection ....................................................................................................................... 14 Why use a Questionnaire? ............................................................................................. 15 Questionnaire Design .................................................................................................... 16 Question Design ............................................................................................................ 16 Testing ........................................................................................................................... 17 Ethical Considerations ................................................................................................... 18 Sampling Strategy ......................................................................................................... 18

3.4.1 3.4.2 3.4.3 3.4.4 3.4.5 3.4.6 3.5 3.6 3.7 Chapter 4 4.1 4.2

Framework for data analysis ................................................................................................. 20 Limitations and potential problems ....................................................................................... 21 Conclusions ........................................................................................................................... 21 Results ............................................................................................................................... 22 How was the research carried out? ........................................................................................ 22 The results and discussion ..................................................................................................... 24 Literature Overview ...................................................................................................... 24 Eligibility ....................................................................................................................... 25 Introduction ................................................................................................................... 26 Knowledge..................................................................................................................... 28 Persuasion ...................................................................................................................... 31 Decision ......................................................................................................................... 34 Implementation .............................................................................................................. 37 Confirmation ................................................................................................................. 39

4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.2.7 4.2.8 4.3 Chapter 5 5.1

Conclusion ............................................................................................................................. 46 Conclusion ......................................................................................................................... 47 Research Objectives .............................................................................................................. 47 Research Question 1 ...................................................................................................... 47 Research Question 2 ...................................................................................................... 48 Research Question 3 ...................................................................................................... 48

5.1.1 5.1.2 5.1.3 5.2 5.3 Chapter 6 Chapter 7 7.1

Recommendations for future research ................................................................................... 49 Limitations of the study ......................................................................................................... 50 References ......................................................................................................................... 51 Appendices ........................................................................................................................ 56 Appendix 1 Ethics Statement ............................................................................................. 56 v

7.2 7.3 7.4

Appendix 2 Email asking for participations ....................................................................... 57 Appendix 3 - Questionnaire Questions.................................................................................. 58 Appendix 4 Questionnaire Branches .................................................................................. 64

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List of figures
Table 1: Primary Research Advantages and Disadvantages: Adapted from Kumar et al. (2002) ......... 13 Table 2: Secondary Research Advantages and Disadvantages: Adapted from Kumar et al. (2002) and Saunders et al. (2007) ............................................................................................................................ 13 Table 3 Methods of Sampling ............................................................................................................... 20 Table 4 Response rates from different sampling techniques ................................................................. 23 Table 5: Number of Employees............................................................................................................. 25 Table 6: Turnover .................................................................................................................................. 26 Table 7: Marketing Budget.................................................................................................................... 26 Table 8: Current Users of PPC .............................................................................................................. 27 Table 9: % of people who have used PPC in the past ........................................................................... 27 Table 10: % of people who have at least heard of PPC ......................................................................... 27 Table 11: When people currently using PPC heard about it.................................................................. 28 Table 12: When those not using PPC heard about it ............................................................................. 29 Table 13: Where people using PPC heard about it ................................................................................ 29 Table 14: Where people not using PPC heard about it .......................................................................... 30 Table 15: Whether those using PPC were searching for it or had a need for it ..................................... 30 Table 16: Whether those not using PPC had a need or were searching for it ....................................... 31 Table 17: Reasons for not continuing to use PPC ................................................................................. 31 Table 18: Inspiration to find out more ................................................................................................... 32 Table 19: Reasons for moving forward ................................................................................................. 32 Table 20: Inspiration for moving forward for those not using PPC ...................................................... 33 Table 21: Reasons for not looking into PPC further ............................................................................. 33 Table 22: Trialling the product .............................................................................................................. 35 Table 23: Benefits Expected.................................................................................................................. 36 Table 24: Expected Advantages vs. Literature Advantages .................................................................. 36 Table 25: Was training undertaken? ...................................................................................................... 37 Table 26: Ease of implementation ......................................................................................................... 38 Table 27: Problems vs. Action Taken ................................................................................................... 39 Table 28: Benefits seen from those using PPC ..................................................................................... 40 Table 29: % Change of expected benefits vs. actual benefits ............................................................... 41 Table 30: Has PPC lived up to expectations? ........................................................................................ 42 Table 31: Would companies recommend PPC? .................................................................................... 42 Table 32: Will companies continue using PPC ..................................................................................... 42 Table 33: Benefits of those that stopped using PPC.............................................................................. 43 Table 34: % difference of Advantages of those using PPC Vs Those not currently using PPC ........... 44 Table 35: % of people that left the process at each stage ...................................................................... 44 Table 36: Reasons for stopping using PPC ........................................................................................... 45

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Chapter 1 Introduction

1.1 Introduction
Marketing spaces are constantly changing and the ways in which organisations can reach their markets have developed greatly since the development of the internet. Management are now able to reach their customers in seconds at very low costs and can even reach those people that were not even looking for them. According to the Neilsen Adview pulse report on advertising expenditure, in the first quarter of 2012 alone, the advertising expenditure in newspapers dropped by 3.6%, magazine by 4.4% and television by 1.2%. However the amount of money spent on internet marketing rose by a massive 12.1% (Nielsen, 2012). This shows that companies are moving away from the traditional marketing spaces such as newspaper, TV and magazine and are adopting the internet as a form of marketing to its customer. 83% of the adult population in the UK has used the internet at some point (ONS, 2011b) and as such it is therefore a very powerful tool which management really should be looking at using.

Upon conducting research into the area it was found there was not a large collection of literature surrounding this topic and it was felt that with the potential power of it and its ever increasing use that it was important to try and conduct some research into Paid Search advertising.

1.2 Aim of this study and for whom

The aim of this study is to determine why small to medium business owners use paid search marketing spaces, the decision making process behind doing so and the advantages and disadvantages that they ultimately see from doing so. It is aimed at those in management who are looking to determine the benefits of Paid Search Advertising and recommendations as to best practice when implementing the innovation. In order to answer this objective fully the following 3 research questions that were established: 4. When implementing a new innovation what is the process that management go through at each of the 5 diffusion stages when considering PPC? 5. Why do companies use PPC advertising? 6. What advantages and disadvantages do companies see?
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1.3 Structure
This chapter provides a very brief introduction to the study and the reasons for why it is being conducted. It will then move onto Chapter 2, the literature review, which will develop an in depth analysis of the research that already surrounds this topic. Through this analysis of the literature it would then be clear where there were gaps in the research and the areas that could be studied in greater depth.

In the next chapter, chapter 3, the study will introduce the methodology used in the study. At this stage the researcher will outline the research gap and go on to show what decisions had to be made in order to conduct the research. It will discuss the options of primary or secondary research, qualitative or quantitative research before outlining the steps involved in designing the questionnaire. Chapter 4 will then take the results from this research and display them to the reader before conducting a detailed discussion based on the results and the literature from earlier in the study. Finally the final chapter of the study, Chapter 5, will draw conclusion based on the discussion of the results and literature as well as presenting the recommendations for future study and the limitations of this study. The diagram below clearly shows the five stages of this study and the order which they flow

Introduction

Literature Review

Methodology

Results and Discussion

Conclusions
Figure 1 Structure of the paper

Chapter 2

Literature Review

2.1 Introduction
In this section the researcher will provide a detailed analysis of the literature surrounding the topic of Paid Search advertising. This section will be used further in the study in order to build a solid discussion based of the research that has been conducted.

This section will start by outlining a definition of online advertising and paid search. Following this the research will discuss briefly the history of online advertising and paid search, before going on to discuss the advantages and disadvantages that they bring. There is not a large amount of research on the specific advantages and disadvantages of paid search due to the ever changing nature of the product and that many features are rather new. The research that has been found points more towards the benefits of internet marketing which have been used and applied to the paid search model. These advantages and disadvantages will be compared to the research in the discussion and will help in establishing the experiences of real businesses. The literature review will also look at why managers make the decision to implement new innovations and the process behind doing so. In order to obtain some structure this will be focusing on using Rogers Diffusion of Innovations theory. It will look at innovation theories and what is said about them by a range of theorists before focusing on Rogers theory, what it does, how effective it is and how others evaluate it too.

2.2 Small to Medium Businesses

In 2012 SMEs accounted for 99.9% of all private sector businesses in the UK (FSB, 2012). The European Commission defined SMEs as companies that are made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million (European Commission 2003).

2.3 Definition of Online Advertising

Online advertising is defined as Deliberate messages placed on third-party websites including search engines and directories available through internet access (Ha, 2008 p31).

Paid search is defined as "advertisers competing for top listing position through bidding in ongoing auctions and then paying when users click their advertisements" (Laffey, 2006, p1). This paper will look at one form of online advertising, being Paid Search advertising.

2.4 History of Advertising on the Web

The first ad appeared on the internet in 1994 with the introduction of banner ads (Ha, 2008). Banner ads are "Small, graphic links placed on a web page. The banner is linked to the advertiser's website, so that clicking on it transports the browser into the advertiser's lair" (Barrett, 1997, p43). These were usually placed along the top, side or bottom of a webpage and were the main form of advertising online until around 2002 (Laffey, 2006). At its height the banner ad was responsible for 53% of online advertising revenue in the UK (Laffey, 2006). However the effectiveness of these ads soon wore off and users stopped responding as much to them. It was reported that 54% of people stated that banner ads interfered with web usage and 11% said they would be more likely to return to a site when not faced with advertisements (McCoy et al., 2007). It was in 1998 that a new approach to internet advertising appeared. The Californian based company called goto.com was launched (Laffey, 2006). This was the birth of Pay Per Click advertising, where advertisers would appear on the page and their position was determined by how much they were willing to pay for a certain keyword or phrase.

As an example if you ran a flower shop then you would want to make sure you appeared highly in the results when someone searched for the phrase flower shop. If you were paying more than your rivals then you would appear above them in the search listings. Goto.com later became Overture.com which was later bought by Yahoo and is still used by them to this day (Seymour et al., 2011). Paid search ads are displayed on users search results along the top above the organic listings and down the side too. Advertisers bid on key words and those who bid the highest and have the highest relevance to the keyword will appear in the results. Should a user then click on one of these adverts then the advertiser is charged for this click.

In 2000 Google entered the market with their Adwords product, which quickly saw them become the market leader. In 2010 Google received $28.2 billion through advertising (Chen and He, 2011) out of total revenue of $29.32 billion (Google, 2010) and was responsible for 91% of all searches carried out on the web (Banks, 2012). On the other hand Yahoo had

revenues of $5.31 billion out of a total revenue of just $6.32 billion (Yahoo, 2010) and was only responsible for 2.77% of searches (Banks, 2012). As a result of the above findings we will focus the study on Google and its Adwords program.

2.5

Advantages of paid search

In order to establish the effects of online advertising we need to look at their advantages and disadvantages. There are a number of advantages that come about because of internet marketing and specifically paid search. From previous studies it can be established that the advantages of internet marketing fall into areas such as global reach, cost efficiency, audience targeting, real time data, adaptability, speed and repeated marketing (Laffey, 2006, Broussard, 2000, Applegate, 2006, Lei, 2000, Anon, 2010).

2.5.1

Global Reach

With 83% of the UK population using the internet (ONS, 2011b) and 2.27 billion people using the internet worldwide (Pingdom, 2012) it allows businesses to gain access to a whole range of different customers. Businesses are now able to reach new markets at the touch of a button and can also now be discovered by people from foreign markets too.

2.5.2

Cost Efficiency

Thanks to the paid search model the cost of advertising is completely in the control of the advertisers meaning they can make the campaign as cost effective as they wish. This is due to the fact that advertisers are only paying for those people who click their advert and who come onto their website. These people have already shown an interest in a businesss area product or industry due to the fact their search term or interests has sparked your ad to appear. Advertisers can control the cost by setting daily budgets and a maximum cost per click (Laffey, 2006). This means that the cost per click is in line with what they are willing to pay and also ensures that the budget does not run over. Once the daily limit has been reached then the adverts will no longer appear on the site to anyone (Laffey, 2006).

Even the adverts that are not clicked help to raise the brand awareness by consumers being exposed to their message and to their adverts on numerous occasions (Broussard, 2000).

Thanks to this tight control of the finances, the system is very cheap to implement and in complete control of the advertiser.
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2.5.3

Audience Targeting

One of the main advantages set out by Applegate (2006) was the fact that the internet could be used to target specific users. When this article was written it was talking about by placing the adverts on specific sites. However with the introduction of paid search, that has been taken to a whole new level. Advertisers using Google Adwords can target their audience based on the keywords they search, whether they have been on their website before and even down to what time of day they are searching. This allows the advertisers to reach the people who they believe will be the most likely ones to purchase their products and who are most like their target market. It is also possible to run multiple campaigns at once which service different people or target markets.

2.5.4

Real Time Data

Web ads can be monitored in terms of hits and results of advertising could be numerically expressed (Lei, 2000, p6). This statement turned out to be true, and like the audience targeting, has exceeded that to allow even greater forms of analysis. Advertisers can now see statistics easily and first hand. They are presented with data such as how many people the ad was served to, how many clicked it, how many purchased something from them and how much it cost per person.

2.5.5

Adaptability and speed

As opposed to traditional media, such as print, TV and radio, where, once the advert is sent it can no longer be changed, the internet allows advertisers to change their adverts immediately and whenever they want. Again Applegate (2006, p6) suggested that The internet allows advertisers the opportunity to change their advertising messages often. The data they receive allows the advertisers to see which ads people are responding to, which they are not and allows them to make changes in order to optimise their campaigns. They can add new campaigns, stop and start different ones immediately and make sure that the ads they are delivering are effective. All such changes can be made in a matter of minutes and the new adverts can be served to potential customers immediately.

2.5.6

Remarketing

Finally the advantage of remarketing is the newest of them all. In 2009 Google introduced a trial of what they called remarketing. This would allow advertisers using the Google Content Network, including YouTube, to target previous visitors to their sites to entice them back
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(Anon, 2010). This gives advertisers the ability to display adverts only to people who have viewed their site in the past. As these people have already shown an interest in their company, displaying adverts to them afterwards may entice them back or create brand awareness.

2.6 Disadvantages of Paid Search

Through the research of the literature it was discovered that there is no substantial research into the disadvantages of paid search. Due to this, this study has looked into the disadvantages of marketing online in general. However these are not specific enough towards Paid search for them to have full effect and much of this research is also out of date. For example Applegate (2006) sets out the disadvantage of advertising online as: 1. The Internet as an advertising medium has not been shown to be effective. In fact, there are too many questions that have not been answered regarding the Internet's impact on consumers. 2. Many users of the Internet do not enjoy being bombarded with advertisements, especially when they are paying to get online. In addition, many users may block many advertisements with software or delete those advertisements that happen to appear on their screens. 3. Many users of the Internet are sceptical about ordering products or services online. In fact, many do not wish to provide their credit card numbers or other personal information because they are afraid that such information may be stolen or sold. In short, they question the security of the Internet or the Web site. 4. Most users of the Internet use modems that are connected to telephone lines. These modems are slow. If an advertiser's Web site has sounds and/or graphics, many users will go back to the previous page before the advertiser's page downloads. The reason: it takes too long for such pages to download, unless the advertiser has employed a company that used the latest technology to create the web site or the user has access to broadband. (Applegate, 2006) As can be seen, most of these disadvantages are no longer relevant to the current marketplace. The fact that Googles revenue from advertising is so high shows that it is an effective medium. Users still do not like being bombarded with adverts as the report from Mccoy et al.

(2007) showed. It showed that 69% of users found pop up ads annoying and 23% said they would not return if a site had them (McCoy et al., 2007). Internet users are no longer sceptical about ordering goods online either. In 2010 it was reported that 34% of consumers prefer to buy online than in store (Tornquist and Hird, 2010). It is also now the case that over 93% of the internet population has broadband and as such speed is no longer an issue (ONS, 2011a).

As such the researcher hopes that with the help of the research that will be conducted they will be able to establish the disadvantages found by real companies.

2.7 Diffusion Strategies

As with all new ideas and innovations, management must decide on which ones they will adopt and which ones they will dismiss. Diffusion is defined as the process by which an alteration occurs in the structure and function of a social group (Rogers, 2013, p5). The idea is that when new products, services or ideas come along, management will follow a certain number of steps which will determine whether or not they adopt the new innovation, or whether they reject the idea. This process happens every time we happen to come across a decision and will often be followed subconsciously. As a result of this there is no set definition as to what the process actually involves. There are many different theories which have come about mainly through the varied backgrounds that each researcher has come from. Cooper and Kleinschmidt concluded that The innovation development process of the manufacturing industry comprises of: (i) preliminary assessment, (ii) detailed investigation (problem definition), (iii) development, (iv) testing and validation, and (v) commercialization (Wonglimpiyarat and Yuberk, 2005). Kline and Rosenberg State that The chain-link model represents the process of innovation a set of linked activities that may occur in a variety of sequences. A model includes the innovative activities as well as the elements of research, knowledge, and market(Wonglimpiyarat and Yuberk, 2005). Schnookler says that The development of technological innovation depends on the evolution of the market demand. The pull from the demand side influences the development of the product life cycle in technological innovation (Wonglimpiyarat and Yuberk, 2005).

While Rogers hypothesises that the innovation decision process is a five stage process involving 1) Knowledge 2) Persuasion 3) Decision 4) Implementation and 5) Confirmation (Rogers, 2003).

Of all the theories it seems that Rogers is the most accepted. Having first been established in 1962 (Wonglimpiyarat and Yuberk, 2005) his book Diffusion of Innovations is now in its fifth edition and has sold over 150000 copies (simonandschuster, 2003). Wonglimpiyarat and Yuberk (2005) conclude in their study into the effectiveness of Rogers theory that The innovation life cycle theory is effective and useful in describing the progress of innovations. This Article used Roger's concept of Innovation Diffusion theory to develop a better understanding of the government innovation process (Wonglimpiyarat and Yuberk, 2005). With the clear and easy to understand steps this theory can be used as a guide to structure the results and the discussion within this study. It allows the study to look at the decisions that were made at each stage and what the managers were thinking at each stage of the process. This paper will then be able to evaluate how Rogers theory matched the experiences of the management and the benefits they expected from it and whether the innovation matched their expectations from before.

2.8 Rogers Diffusion of Innovations

This study will use Rogers Diffusion of Innovation Theory to establish the stages that management go through to make decisions and to establish what the thinking is behind each stage. It will use this along with the research to establish key variables in the decision making process. While using this theory we will refer to the company, manager, director or decision maker as the individual and paid search will be referred to as the innovation or PPC. The steps in Rogers theory are laid out in a clear and easy to understand process. According to Rogers there are 5 stages in which this diffusion occurs, known as the innovation decision process. They are 1) Knowledge 2) Persuasion 3) Decision 4) Implementation and 5) Confirmation (Rogers, 2003). These stages are used every time we want to make a decision on an innovation.

2.8.1

Knowledge

The knowledge stage is when an individual first hears of an innovation, what it has to offer and how it works. At this stage the management will either take notice of the innovation and
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move onto the next stage or will not act on it at all. Management are most likely to take note of an innovation if they already have a need or a problem that they wish to fix.

Rogers identifies that in order for an individual to first obtain knowledge of an innovation, the information must come through a communication channel. These communication channels are defined as the means by which messages get from one individual to another (Rogers, 2003). The quickest way for an innovation to be communicated is through mass media channels. These media forms reach millions of people and include areas such as TV, newspapers and radio. However, Rogers states that this form of communication is not the most effective way to persuade the individual to look into the innovation. Interpersonal channels do this much more effectively and involve a personal exchange between 2 or more people. This may be a business partner, someone the individual works closely with or just a friend who has heard of or is using the innovation.

2.8.2

Persuasion

The next stage is persuasion. At this stage the individual will form an opinion of the innovation and decide whether that opinion is good one or bad. The individual will actively look for information on the innovation and decide what information they find to be relevant and credible. One of the main areas they will look at is the advantages and disadvantages. Once they had all the information they needed then they would start to apply the innovation mentally to their organisation and to where they want to be. This will help them will form their attitude to the innovation. Should they have a favourable opinion of the innovation they will then start to imagine how they could fit this innovation in to their organisation. Like in the previous stage, where interpersonal communication was a major factor, Rogers implied that businesses will mostly look to seek information from people they know who have experience of using the innovation. It is at this point they will decide if it is possible to adopt and proceed onto the next stage of process.

2.8.3

Decision

This is where the individual will start to look at the innovation in more depth. They will establish what benefits they are likely to see, how much it would cost to implement. Rogers suggests that one way to cope with the uncertainty of an innovation is to try out the new idea on a partial basis (Rogers, 2003, p177). As such many organisations may conduct a trial of the product before fully committing to its implementation. This will then allow them to make
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an informed decision as to whether the innovation could be of benefit to the organization. It is at this stage or the next where individuals may also undertake some training on how to use the innovation which should allow for smoother use in the future. This is the final stage at which the individual can reject the innovation.

2.8.4

Implementation

The penultimate stage of the process is implementation. This is when an individual puts an innovation to use (Rogers, 2003, p179). Up until now the process has not involved any physical action from the individual; however at this stage plans are put in place. The individual still doesnt know everything about the innovation and as such there is still a degree of caution when moving forward. An individual must consider elements such as where the innovation can be obtained, how it is to be used and what problems they might encounter along the way. Again the organisation may undertake training in order to be able to implement it effectively and efficiently.

2.8.5

Confirmation

This final stage takes place after the innovation has been in place for a period of time. This stage will involve the individual seeking reinforcement (Rogers, 2003, p189) in the decision they have made. They will do this by looking at the performance of the innovation and seeing whether it has matched up to their expectations, fallen short or superseded them.

Should the innovation not provide sufficient reinforcement to support their original decision then the innovation will be discontinued. Rogers suggests there are 2 forms of discontinuance, replacement and disenchantment. Replacement discontinuance is when the individual stops using the innovation as they have found a more appropriate method of serving their needs. Disenchantment discontinuance on the other hand sees an organisation stop its use of and innovation due to a lack of satisfaction in the performance of the innovation. (Rogers, 2003)

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Chapter 3 Methodology

3.1 Introduction
In the previous section the literature surrounding this project was outlined. This looked at Rogers Diffusion of Innovations as well as the advantages and disadvantages of using PPC advertising and the internet in general for marketing a business. This chapter will look to inform you of all of the stages involved in the implementation of this study. This will involve outlining the research gaps which have been identified by the analysis of the literature, the research methods that were used as well as the research questions involved in the study.

3.2 Research Gap

In the previous chapter it was established that there really is a lack of academic research into the effects of PPC and the advantages and disadvantages to companies. Much of the research focuses on marketing on the internet in general and does not focus on PPC advertising. In order to give a focus to the study the following research questions were developed: 7. When implementing a new innovation what is the process that management go through at each of the 5 diffusion stages when considering PPC? 8. Why do companies use PPC advertising? 9. What advantages and disadvantages do companies see? This chapter will outline the strategy that was adopted when conducting this research as well as any considerations which needed to be made in order to answer the research questions.

3.3 Research strategy

3.3.1 Primary or secondary

The first thing that had to be established for the research was the type of research that the researcher would carry out. There are generally two types of data which can be collected. They are primary and secondary. Primary data is data which is collected specifically for the projects being undertaken (Saunders et al., 2007 p607). It is data that the researcher has gone out and collected by themselves in order to get the answers that they require.
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Secondary data on the other hand is data that is collected by persons or agencies for purposes other than solving the problem at hand (Kumar et al., 2002 p106). While this type of data may present the researcher with the information they need it will not be specifically aimed at the project they are looking to research. These two types of data both have their disadvantages and advantages and in order to establish which one to conduct the researcher must weigh these up. Tables 1 and 2 below outline the advantages and disadvantages of both of these types of research strategies.

Table 1: Primary Research Advantages and Disadvantages: Adapted from Kumar et al. (2002)

Table 2: Secondary Research Advantages and Disadvantages: Adapted from Kumar et al. (2002) and Saunders et al. (2007)

Having weighed up the advantages and disadvantages of each type of data it was felt that the best way forward for this study would be to conduct primary research. The aim of the study is to find out about managements decision making process and to discover the benefits that companies see from using PPC advertising. As already established in the literature review there is a severe lack of research into this field and as such it only makes sense to conduct

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primary research. This will allow the researcher to ask the questions they want to ask and to get the opinions of business straight from the directors of the companies.

3.3.2

Quantitative or Qualitative

Once the type of research was established it was then necessary to decide whether the research that will be conducted should be quantitative, qualitative or a mix of both.

Quantitative research will always involve the analysis of numbers (Johnson and Harris, 2002). These will most likely take the form of a questionnaire where once completed the researcher will use mathematical and statistical treatment to help evaluate the results (White, 2000 p24).

Qualitative research on the other hand is data which is collected in the form of words, observations and descriptions (White, 2000, Johnson and Harris, 2002). These usually come in the form of interviews and will not involve using mathematical approaches when analysing the data (White, 2000).

Having considered the two different approaches and thought about the research questions that the project is looking to answer it has been established that this research should follow a mixed approach, using some qualitative and some quantitative data. Looking at the research questions there are some questions that will require set answers as well as others that will look to establish the opinions and thoughts of management as they go through the process. White (2000) suggested that by using a mixed approach a researcher was able to look at the problem from a number of different angles. It was also said that doing so would be an excellent way to verify the results of any data.

3.4 Data collection

There a number of different approaches that can be used when looking to collect data for a research project such as questionnaires, interviews, case studies, focus groups or observations (Collis and Hussey, 2003). Each has its merits and each has its downsides too. Having established that this research should take the form of primary research with a mix of both qualitative and quantitative approaches, the most sensible form of conducting this research

14

would be through a questionnaire. The following sections will look to justify this choice as well as set out the steps that were undertaken in order to conduct the research.

3.4.1

Why use a Questionnaire?

Questionnaires are probably the most popularly used method of obtaining data when conducting research. Collis and Hussey (2003) say that questionnaires are a collection of planned questions, which have been chosen in order to gain reliable responses. Each person is asked the same questions and as such you can make sure that everyone is giving responses to each of those questions.

Consideration had to be taken into the way that this survey would be distributed. There are a number of different methods that could have been pursued such as a postal questionnaire, by telephone, face to face or online. Due to the nature of the study and the wide variety of businesses and responses looking to be gained, from all over the UK, it was felt that the easiest way of conducting this survey would be online.

This method would bring a number of advantages. Firstly this research was looking to get in touch with directors or marketing managers of a wide range of businesses from across the UK. The online questionnaire would permit the targeting of the appropriate people, within businesses across the UK, who would have the knowledge to answer the questions fully and accurately. It was hoped that the researcher would be able to, where possible, send the invitation to their personal email accounts which would increase the confidence that the correct person has answered the survey.

Unlike surveys conducted by post or face to face there would be no lead time in waiting for the questionnaires being delivered to the potential respondents and there would not be the need to wait for it to be sent back. By doing it online it allowed the respondents to complete it when they had time and the researchers were not seen to be wasting their time by asking questions on the phone. It would allow respondents to take some time to think about their responses too, which means that answers were not forced or rushed. By holding the questionnaire online there will be 100% anonymity which means that respondents can answer honestly and not feel that they have to answers with responses that they think are the right thing to say. All responses will be gathered electronically and this will be completely free to

15

administer and would only require time in actually targeting the correct people. (Collis and Hussey, 2003, Bennett, 1991, Saunders et al., 2009).

3.4.2

Questionnaire Design

Once the method of delivering the research was chosen it was then necessary to look at the design of the questionnaire and how this would be taken forward. There were a number of considerations that had to take place in order for it to progress further. In this section you will be guided through the various different stages that were undertaken when implementing the questionnaire.

3.4.3

Question Design

As the literature review highlights, Rogers Diffusion of Innovations has five different stages which are undertaken when looking to implement a new innovation. It was therefore felt that this would be a good model for splitting up the questions.

The questions were designed to ask what managers were thinking at each stage of the process. It was realised that not everybody who answered the questions would follow through with the innovations. As such, at each different stage in the process there was the option for the respondent to say that they did not go further in the process. This would allow the researcher to see where most people stopped looking at the innovation and the reasons for doing so too. It also made sure that those responding to the questions were not subjected to questions that were not relevant to them and as such the time it took to answer the survey was greatly reduced.

As the respondents have no direct contact with the researcher in order to clarify the meaning of questions or to ask for more information the researcher had to make sure that each question was clear and that each person who read it would read the question the same way. It also had to be considered as to what type of questions were to be asked. This research was looking to determine not just facts but opinions too and as such there would be a number of different types of questions. The first thing that had to be established was the eligibility of those responding. This research is looking purely at small and medium businesses and as such, it had to be sure that the companies who were responding to the survey met the criteria.

16

In order to do this there were two questions placed at the beginning of the survey which determined whether their business lay within the definition. If they did then they were allowed to proceed and if not they were informed so and thanked for their time.

After this, the main survey would start where there would be some closed questions which required a yes/no answer, there would be some open questions which would require the respondent to enter their opinions and finally there would be some forced-choice questions which would require the respondent to answer from a given set of answers. These three types of questions together would allow the researcher to gain all the information that would be required for the survey and would provide a wide range of data to analyse. The closed questions would provide the answers that are essential for the research, the open questions would allow us to gain some opinion which would help back up the answers to the closed questions and perhaps provide some further information and the forced choice questions would allow the respondents the opportunity to select all the responses that applied to them giving us a reliable list of advantages and disadvantages (Synodinos, 2003, Saunders et al., 2009, Chisnall, 2004, McGivern, 2003).

3.4.4

Testing

Once the survey had been designed and the appropriate questions had been chosen it was then essential to test it in order to make sure that it met its required function. The researcher asked 4 fellow undergraduate students and two family members to run through the questions. They were each given a quick brief which told them what type of company they were and whether they used PPC advertising. This was done in order to make sure that all branches of the questionnaires were tested. Each member was asked to make sure that each question was clear and unambiguous, that there were no answers missing and that the survey took them to the correct stage depending on their answers. Overall the feedback was very good with a couple of minor changes being made. One change that was made was on the scale questions where the respondents were required to rate on a scale of 1 10 how easy the implementation of PPC was. It was felt that it needed to be noted whether 1 or 10 was representing ease of implementation. This could have caused some confusion in the answers and would have provided unreliable data and as such this was changed.

The other problem that was encountered was that users who went off on one of the branches got to the end of the survey where they were then informed that they were not suitable for the
17

survey despite the fact that their answers to the eligibility questions proved that they were. As such this was changed in order to make sure these people did complete the survey.

3.4.5

Ethical Considerations

In line with the Heriot-Watt University guidelines into ethical research there were a number of considerations that had to be taken into account before the questionnaire was sent out. Ethics in research was defined by Kumar et al. (2002 p18) as the moral principles or values that generally govern the conduct of an individual or group. He also stated that Researchers have responsibilities to their profession, clients, and respondents, and must adhere to high ethical standards to ensure both the function and information are not brought into disrepute (Kumar et al, 2002, p18). It was therefore very important that the survey met these standards. There were a number of areas which needed to be satisfied before this could be done.

As this study involved speaking to businesses and looked to gain information that may be seen a sensitive it was important that all information that was passed on remain confidential and that the respondent could not be identified from their answers. Respondents were informed that they reserved the right to withdraw from the study at any time with no judgement or adverse effects and the survey would not look to offer an incentive to those who took part. Potential respondents were also informed of the purpose of the study clearly and truthfully (White, 2000, Saunders et al., 2009).

In an attempt to satisfy this, a statement was included at the start of the questionnaire and in the email which was sent out to participants (Appendix 1). This informed the respondents that their information would remain confidential and that they would not be identified in the study without prior consent. Potential respondents were also told of the time that it was expected to take, the purpose of the study and were also given the contact details of the researcher and their supervisor in case of any worries. Participants were finally informed that they would have the opportunity to request a copy of the study when fully completed if they wished.

3.4.6

Sampling Strategy

Selecting the people to respond to a survey is obviously very important and there are a range of different ways in which a researcher can go about it. It could be that the sample is randomly selected where the researcher does not choose who should respond or it could be a non-probability sample where the researcher has a certain level of control over who can
18

respond to the survey (Saunders et al., 2009). With this study it was particularly important to make sure that the people who were answering the survey were responsible for the implementation of PPC advertising or for the decision not to implement it. Therefore it was decided that a non-probability approach would be taken.

This meant a self-selection sampling technique was undertaken in order to gain responses. According to Saunders et al. (2009 p241) this is used when a researcher allows each case to identify their desire to take part in the research. This meant advertising the fact that the researcher had a survey that they were looking to be completed and inviting them to do so through methods such as email, message boards, personal communication or personal contacts. Those people who then went online and completed the survey had their data collected and those that did not were not included in the survey (Saunders et al., 2009).

During this survey there were a number of techniques that were undertaken in order to invite individuals to take part. These can be seen in Table 3 below. As you will see there were a number of different techniques that were use and an example message that was sent can be found in Appendix 2.

19

Medium

Action

LinkedIn

Facebook Message Boards

Personal Contacts

Joining a number of appropriate business management and marketing groups and publicising the survey Asking friends who knew of people with their own business to pass on the survey Posting on a number of message boards asking for people to help with the survey if they owned a business Using a number of contacts who own their own business to ask if they will fill in the survey Use the contacts of those people to send emails too as well Searching on Google for businesses within certain industries then choosing the top 20 results in the listings and sending emails to them. Spend some time going around local businesses near both home and work. Where individuals will be spoken to and given a link to the survey to complete if they wish.

Google

Personal Communication

Table 3 Methods of Sampling

Using this method as you can see the study would be able to access a wide range of businesses from many different backgrounds. The researcher will hopefully gain a wide range of responses from people who do use PPC, people that have in the past and those who have never heard of it.

3.5 Framework for data analysis

This survey would be designed and distributed using esurveyspro.com, which is an online questionnaire design and distribution tool. Doing so would allow the researcher to design an appropriate questionnaire with the different types of questions and the appropriate branching too. It would appear professional and the collected data could then easily be analysed. After all the data was collected it was felt that using SPSS to analyse the data would be the best

20

possible method as it would allow easy interpretation of the data and would allow the researcher to look at relationships of certain responses.

3.6 Limitations and potential problems

The main limitations that might be encountered would be accessing the correct person within the organisation. Some of the respondents have made their email addresses readily available and can be emailed directly; however should their email addresses not be readily available there would be a reliance on the person who receives it to pass it on to the correct person. There is also the problem that some businesses may see the information that is being asked as being too sensitive therefore it is important to stress the anonymity and confidentiality of the study.

3.7 Conclusions
This chapter started by identifying the different methods that needed to be considered when designing the research. It was decided that the best approach would be to conduct primary research using a mix of qualitative and quantitative methods. The easiest way to do this was through an online questionnaire. This section then looked at why a questionnaire had been chosen before giving information on how the design of the survey came about. The ethics of the study were considered and the researchers approaches to these were outlined before the testing and the sampling strategies for the study we discussed. Finally it was discussed how these results would be analysed. The next section will present the findings of this study and builds a detailed discussion.

21

Chapter 4 Results
In the previous section it was highlighted how the researcher would go about obtaining the research required for this study. The method chosen was an online questionnaire and there were a range of different ways in which the researcher planned on obtaining the information.

This section will provide an in depth analysis of the results that were gained, it will start by outlining how the results were obtained at each stage before going on to present a discussion that will allow the researcher to answer the research questions of the study.

4.1 How was the research carried out?

As mentioned in Table 3 there were a number of different modes that the researcher planned to use in order to get the survey to the correct people. Each of these stages was carried out at separate times, when one was exhausted the researcher moved on to the next stage in an attempt to gain more responses. This meant that it was simple to keep an eye on which methods were successful in obtaining results. Table 4 below outlines which methods were used and their success.

22

Medium LinkedIn This involved the survey going out to a large number of people who were members of the groups. Each person will have also received at least one email from LinkedIn notifying them it had been posted. The response rate was reasonable with 10 responses Friends were asked to pass on the survey to anybody they knew who owned a business. This was not as successful as anticipated and only resulted in 2 responses Posted on a number of message boards asking people to take part if they owned a business. As this was not a business forum the response was again low and only resulted in 2 responses Used a number of contacts who own their own business and asked if they would complete the survey. The contacts of these people were also emailed asking them to take part. This was by far the most successful method with 35 responses. Searched on Google for businesses within certain industries and then chose the top 20 companies and emailed them. This method was reasonable. As the businesses had no connection to the researcher the response rate was lower with 10 responses. Spent some time going around local businesses and gave them a link to the survey. This response rate was disappointing. It was thought that by meeting the potential respondents personally that it would raise response rates. However despite the positive communication only 5 responded.

Facebook

Message Boards

Personal Contacts

Google

Personal Communication

Table 4 Response rates from different sampling techniques

23

As can be seen the methods of sampling had varying levels of success. It was found that those who had a connection to the researcher were more willing to complete the survey. Overall 180 emails were sent out to potential respondents, while 20 businesses were personally visited and a link to the survey was posted on various message boards and internet groups. Overall the research returned 64 responses to the survey which gave a response rate of 32% and provided the researcher with a large amount of data. This response rate was as expected as Saunders et al. (2007) suggested that internet based questionnaires would typically receive 30% response rate.

4.2 The results and discussion

In the following sections the results of the survey that was conducted can be displayed. This section will look at the responses that were given for each stage of the innovation process for companies that do use PPC advertising and for those that do not use PPC advertising too. It will then go on to present the findings in relation to the research questions that were established in the previous section. They were:

1. When implementing a new innovation what is the process that management go through at each of the 5 diffusion stages when considering PPC? 2. Why do companies use PPC advertising? 3. What advantages and disadvantages do companies see?

4.2.1

Literature Overview

The literature began by outlining the advantages of paid search advertising. It was said that the main advantages that were found were global reach, cost efficiency, audience targeting, real time data, adaptability and speed and repeated marketing. Each of these points was discussed in detail with a range of different authors opinions being brought in at t he various stages. Once the advantages were discussed the literature review then went on to outline the disadvantages. However there was not any substantial research into the disadvantages of PPC advertising and as such it went on to look more at the disadvantages of advertising online in general. It was stated at this point that this study would hope to identify some of these disadvantages. The last piece of theory that the literature review went on to look at was the various diffusion strategies and in particular Rogers Diffusion of Innovations theory. The five steps of Rogers theory were outlined and discussed and allowed the researcher to see the

24

various stages that happen within a decision making process. The five stages were Knowledge, Persuasion, Decision, Implementation and Confirmation (Rogers, 2013). Using this model it allowed the survey to be structured in a way that allowed the researcher to see what happens at each stage when considering PPC advertising.

4.2.2

Eligibility

The first thing to do was establish whether the company taking part in the survey lay within the definition of a small to medium enterprise. In order to do so they were asked the turnover of their company, their marketing budget and the size of the company. This not only made sure that they were eligible but also provided an overview as to the different types of businesses answering the survey. As can be seen in Table 5, 73.4% of the companies that responded employed just 1 20 people.

How Many Employees does 1 - 20 your company employ 20 - 50 50 - 100 100 - 200 200 - 250

Count Column N % 47 73.4% 11 2 3 1 17.2% 3.1% 4.7% 1.6%

Total (N)
Table 5: Number of Employees

64

100.0%

In terms of the turnover of each of the businesses this was more spread out with 35.9% having turnovers of less than 250000 but 21.9% with turnovers of up to 2.5 million (Table 6).

25

In order for your company to fit within the boundaries of this study they must be a Small to Medium business. This is defined ad a company which has less than 250 employees and a turnover of less than 40 million.

< 250000 250000 - 500000 500000 - 1 million 1 million - 2.5 million 2.5 million - 5 million 5 million - 10 million 10 million to 22 million

Count Column N % 23 35.9% 9 10 14 3 1 4 14.1% 15.6% 21.9% 4.7% 1.6% 6.3%

Total (N)
Table 6: Turnover

64

100.0%

The final question that was asked at this stage was the marketing budget of each company. As before most of the companies asked fell into the lower ranges of the survey with 70.3% of respondents saying that they had a marketing budget of less than 25000 (Table7).
Count Column N % 45 70.3% 7 7 2 0 1 2 10.9% 10.9% 3.1% .0% 1.6% 3.1%

Roughly what is your marketing budget each year?

1 - 25000 25000 - 50000 50000 - 100000 100000 - 250000 250000 - 500000 1 million + Would rather not say

Total (N)
Table 7: Marketing Budget

64

100.0%

4.2.3

Introduction

It is at this stage that the survey starts to branch depending on the answers that were given. This would establish what questions they would be faced with at the next stage in order to get the best responses. Respondents were first asked whether they currently used PPC advertising, with 39.1% saying yes and 60.9% saying no.

26

Do you currently use Google Yes Pay Per Click Advertising No

Count Column N % 25 39.1% 39 60.9%

Total (N)
Table 8: Current Users of PPC

64

100.0%

As seen in Table 8 61% of companies that we asked were not currently using PPC advertising. After it was established that the respondent was not using it the respondents were asked whether they have ever used PPC advertising. 59% of people who were asked this question said that they had never used PPC advertising. Those that said no were then asked whether they had ever heard of PPC advertising. It was found that a total of 6 respondents said they had never heard of it while 17 respondents had heard of it but never used PPC. This accounted for 26.5% of the total number of respondents. The results of which can be seen in Table 9 and 10 below.

Have you ever used Google Yes Pay Per Click Advertising? No

Count Column N % 16 41.0% 23 59.0%

Total (n)

39

100.0%

Table 9: % of people who have used PPC in the past

Have you heard of Google Pay Per Click Advertising?

Yes No

Count Column N % 17 73.9% 6 26.1%

Total (n)

24

100.0%

Table 10: % of people who have at least heard of PPC

27

Those that answered no to both of these questions were taken to the end of the survey and thanks for their time. In line with the five stages outlined by Rogers Diffusion of Innovations strategy the results will be displayed within each stage. They were Knowledge, Persuasion, Decision, Implementation and Confirmation (Rogers, 2003).

4.2.4

Knowledge

This is the stage in the process where an individual first hears of an innovation. It is at this stage that the diffusion process starts. There were a number of points which we researched in this stage which relate to the theory which was studied. As was discovered in the previous section, only 39% of businesses surveyed were currently using PPC advertising. Therefore it is important when we are conducting this discussion to think about both those who are currently using PPC and those that are not using PPC.

Respondents were asked three questions at this stage. The first asked them when they first heard of PPC advertising. The majority of responses that were received suggested that 44% of respondents heard about the innovation 3 7 years ago. 24% of responses said that they heard about PPC 1 3 years ago and 20% of responses said that they heard about PPC 10+ years ago (Table 11).
Count When did you hear about Google Pay Per Click Advertising? Less than a year ago 1 - 3 Years ago 3 - 7 Years ago 7 - 10 Years ago 10 + Years ago 1 6 11 2 5 Column N % 4.0% 24.0% 44.0% 8.0% 20.0%

Total (n)

25

100.0%

Table 11: When people currently using PPC heard about it

The people who are not currently using PPC were asked the same question. The results were relatively similar with the majority still hearing about the product 3 7 years ago, however more people had heard about it more recently than those that were using it with 45.5% of respondents saying that they only heard about it between 0 and 3 years ago as seen in Table 12.
28

Count When did you hear about Google Pay Per Click Advertising? Less than a year ago 1 - 3 Years ago 3 - 7 Years ago 7 - 10 Years ago 10 + Years ago 3 12 14 2 2

Column N % 9.1% 36.4% 42.4% 6.1% 6.1%

Total (n)

33

100.0%

Table 12: When those not using PPC heard about it

They were then asked where they first heard about PPC advertising. These responses were fairly evenly distributed as can be seen in Table 13 with the main responses being from a business partner (16%), from a professional organisation (16%), in the media (16%) and from Google (12%).
Count Where did you first hear A Business Partner about Google Pay Per Click From a Professional Organisation Advertising? In the Media Google An Employee Experts in the area A Friend Other 4 4 4 3 2 2 1 5 Column N % 16.0% 16.0% 16.0% 12.0% 8.0% 8.0% 4.0% 20.0%

Total (n)

25

100.0%

Table 13: Where people using PPC heard about it

As before, the survey also asked this question to the businesses that were not using PPC advertising. Table 14 shows the majority of those asked heard about PPC did so through Google itself (39.4%) with the media also being another very high source of communication (27.3%).

29

Where did you first hear Google about Google Pay Per Click In the Media Advertising? From a Professional Organisation A Business Partner An Employee Experts

Count Column N % 13 39.4% 9 4 2 1 1 27.3% 12.1% 6.1% 3.0% 3.0%

Other

9.0%

Total (n)

33

100.0%

Table 14: Where people not using PPC heard about it

This fits very well with Rogers knowledge stage of the innovation process as he suggested that individuals were more likely to progress with an innovation if they heard about it through interpersonal communication rather than through mass media. As can be seen from the responses in the two tables above, of those that currently are using PPC, 36% of them found out about it through some form of face to face communication. This is contrasted with those that are not using PPC, whom only 12.1% of respondents said that they had heard about it through some form of personal communication.

Rogers also suggested that management will most likely take notice of an innovation if it was something that they had a need for. In order to establish if this was the case the respondents were asked whether or not PPC advertising was something that they were actively seeking or had a need for. Interestingly, as seen in table 15, of those that are using PPC only 40% of people said that it was something that the company was actively looking for.
Was it something that you were actively searching for or had a need for? Yes No Count Column N % 10 40.0% 15 60.0%

Total (n)

25

100.0%

Table 15: Whether those using PPC were searching for it or had a need for it

While it was also noted that of those not using PPC some 63.6% of respondents were not actively searching for Google PPC when they first came across it (Table 16).

30

Was it something that you were actively searching for or had a need for?

Yes No

Count Column N % 12 36.4% 21 63.6%

Total (n)

33

100.0%

Table 16: Whether those not using PPC had a need or were searching for it

It appears that despite what Rogers may suggest that PPC is not really something that the majority go in search of themselves but in fact it finds them. However this theory was partially backed up by the final question of this section.

It was found that at this stage in the process of the respondents that were left, 11 respondents (19%) decided that they did not want to look into PPC any further and did not move from the knowledge to the persuasion stage. The main reason for this was that it did not interest them which shows that those that did not have a need or were not looking for it did not pursue it any further as you can see in Table 17.
Count What was your reasoning behind not looking into Google Pay Per Click Advertising Further? (Choose all that Apply) It did not interest me It came at the wrong time I did not have time It was not my decision to make Not relevant to our business 6 2 1 1 1 Column N % 54.5% 18.2% 9.1% 9.1% 9.1%

Total (n)

11

100.0%

Table 17: Reasons for not continuing to use PPC

4.2.5

Persuasion

At this stage the respondents had gained the knowledge of PPC and had enough interest to continue to look into it further. This set of questions looked to establish what opinion people formed of PPC and what persuaded them to look into it further. The first question established what had persuaded them to get to this stage in the first place and then what the factors were in them moving forward in the process to the decision stage. Rogers stated that if they formed a favourable opinion and it would appear to fit in their organisation then they would move to the next stage. Again these responses were obtained from those who do use PPC and those who do not use PPC too.

31

The survey first asked, after hearing about PPC advertising what was it that persuaded them to find out more information about the product. The main response, as seen below in Table 18, was that people were inspired to look into PPC further due to the benefits being talked about (64%) followed by the fact that the businesses were looking for a new way to advertise (48%). Respondents also said that the success stories of other users (32%) and the fact it was something new (16%) played a part in their inspiration.
Count Column N % 16 64.0% 12 8 4 2 3 25 48.0% 32.0% 16.0% 8.0% 12.0% 100.0%

After hearing about the product, what inspired you to find out more about Google Pay Per Click Advertising? (Choose all that apply)

The benefits talked about You were looking for a new way to advertise The success stories of current users Because it was something new For personal interest Other Total Respondents (n)

Table 18: Inspiration to find out more

They were then asked which of the benefits were the main reason that they decided to take their interest in the innovation further. The response to this question would be the reason, after finding out more information, they moved onto the decision stage of the process. The benefits that were talked about was still the highest response (60%). This was followed by the success stories of current users (28%) and the fact it was a new way to advertise (24%) (Table 19).
Count Column N % 15 60.0% 7 6 28.0% 24.0%

Which of these benefits was the main reason you decided to look into Google Pay Per Click Advertising even further? (Please choose the most appropriate answer)

The benefits talked about The success stories of current users You were looking for a new way to advertise Other Total Respondents (n)

4 25

16.0% 100.0%

Table 19: Reasons for moving forward

32

For the respondents that are not currently using PPC the survey asked what inspired them to find out more about PPC advertising. Table 20 shows that the main reason that businesses gave was that they were looking for a new way to advertise (54.5%) as well as the benefits that were being talked about (36.4%).
Count Column N % 12 54.5% 8 4 3 2 36.4% 18.2% 13.6% 9.1%

After hearing about the product, what inspired you to find out more about Google Pay Per Click Advertising? (Choose all that apply)

You were looking for a new way to advertise The benefits talked about For personal interest The success stories of current users Because it was something new

Total Respondents (n)

22

100.0%

Table 20: Inspiration for moving forward for those not using PPC

Again at this point the businesses were asked whether they continued to look further into the organisation and as such moved onto the next stage or not. It was found that 17% of the remaining businesses decided to opt out of this stage. There were four reasons given for this. The main one was that it did not interest the company anymore (50%). Other reasons that were given were that it seemed like a lot of effort for little reward (37.5%), it was not suited to their company (25%) and the company did not have enough time to do it (25%). This can be seen in Table 21 below.
Count What was your reasoning behind not looking into Google Pay Per click Advertising further? It did not interest us any more We did not have time It was not suited to our company I seemed like a lot of effort for little reward Total Respondents (n) 4 2 2 3 Column N % 50.0% 25.0% 25.0% 37.5%

100.0%

Table 21: Reasons for not looking into PPC further

Looking at what Rogers said about this stage of the innovation process there are a number of responses from this survey that support what Rogers had to say. As mentioned earlier, the persuasion stage is where the individual will begin to form a favourable or unfavourable opinion of PPC. They will really be looking at how the innovation could be applied to their company, how it would work and how it would fit in with what they do. Rogers states that

33

one of the main questions that people want the answers to is What are the innovations advantages and disadvantages? (Rogers, 2003, p175). This is backed up by the fact that the main reason respondents got to this stage in the first place and their main reason for moving onto the next stage was the advantages that were talked about. Rogers also stated that while there might be lots of studies into such an innovation, individuals will mainly look to seek information from people they know who have experience of using the innovation. Again this is backed up by the fact that when asked, the second highest response given was the success stories of others.

When looking at the individuals that do not currently use PPC it provides a very interesting comparison. Rogers said that in order for an individual to gain a favourable opinion or unfavourable opinion to an innovation they had to apply it to the situation they are currently in or the position that they want to be in (Rogers, 2003). This did not appear to be the case for people who do not use PPC. Nearly half as many people, than those who use PPC, were interested in the benefits and less than half as many were interested in the success stories of other. Instead the main reason was that they were looking for a new way to advertise and the one answer that was of note was that it was for personal interest. This shows that those that do not currently use PPC were not effectively applying it to their organisation and looking at how the benefits could help them. Instead they were looking at it from a personal point of view.

As mentioned, a number of organisations did not move from this stage to the next stage and when examining the reasons as to why this finding is only backed up further. Only 2 of the respondents (25%) said that they were not adopting it because it was not suited to their organisation. The others stated that it just did not interest them, it was a lot of effort and they did not have time. There was a number of other options too that could have been responded to which would imply they had thought about the implications of implementing the innovation such as, being unable to afford staff training, the benefits did not match what were expected or not having time to train staff members. However, none of these responses had any replies to them.

4.2.6

Decision

This is the stage of the process where the individual will make the final decision as to whether they are going to implement the innovation or not. They will weigh up what benefits they
34

expect to see and determine how to actually use it. This is the last stage of the process where an individual can reject the proposal before implementing it. When the survey asked what benefits the organisations expected to see it revealed some interesting results. Before fully implementing an innovation Rogers said that one way to cope with the inherent uncertainty about an innovations consequences is to try out the new idea on a partial basis (P177). He stated that most individuals would look to implement a trial first and that it was an important consideration when adopting a new innovation. As such the researcher decided to find out exactly how many people did conduct a trial of PPC before implementing it. The results showed that there was not a clear majority who did actually trial the product and the response was fairly even with 52% of respondents saying they did as can be seen in Table 22.
Count Column N % 13 52.0% 12 48.0%

Did you trial the product before making a final decision?

Yes No

Total (n)
Table 22: Trialling the product

25

100.0%

The main consideration however, at the decision stage is looking at what benefits the company expects to see from the implementation. This will allow the company to determine whether it is worth implementing. Because of this point the survey looked to establish what benefits the users expected to see from their PPC advertising. The responses to these would allow the researcher to ascertain whether these expected benefits lived up to the initial expectations. Table 23 shows a massive 84% of businesses expected to see an increased number of enquiries to their business. 76% expected increased traffic to the website and increased sales too. Other responses such as reaching customers globally (36%), the ability to change and adapt ads to respond to performance (32%), better quality of enquiry (24%) and lower costs (20%) were indicated too.

35

What benefits did you expect to see from the implementation of Google Pay Per Click Advertising? (Choose all that apply)

Increased Number of Enquiries Increased Traffic to Website Increased Sales Reaching Customers Globally Ability to change and adapt ads to respond to performance Better Quality of Enquiries Lower Costs Better Control of Costs Improved Customer Relations The Ability to Remarket

Count Column N % 21 84.0% 19 76.0% 19 9 8 6 5 4 2 2 76.0% 36.0% 32.0% 24.0% 20.0% 16.0% 8.0% 8.0%

Other TotalRespondents (n)

4 25

16.0% 100.0%

Table 23: Benefits Expected

The literature that was presented earlier in the study identified 6 main advantages that were brought about by PPC advertising. They were global reach, cost efficiency, audience targeting, real time data, adaptability and speed and repeated marketing.

The responses that were obtained by the survey follow closely to the types of advantages that were discovered in the literature. This is shown by the fact that these seven areas represent most of the top answers that were given. Table 24 below links the 7 types of advantages in the literature with those that were discovered in the research.

Table 24: Expected Advantages vs. Literature Advantages

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However there were some other advantages that were discovered which were considerably bigger than those set out by the literature. It is very clear that companies expected increased enquiries and increased web traffic and increased sales as benefits from PPC. These factors would likely come about partly thanks to the other advantages taking place such as being able to target customers; however it is clear that companies see these as being potential direct advantages of PPC advertising.

4.2.7

Implementation

The penultimate stage of the process is implementation. By this point in the process the individual has considered all of the information they can about an innovation and has considered what effect it will have on their organisation. It is at this stage that all of the thinking and information searching becomes physical and the innovation is put into place and is starting to be used.

No organisation at this stage can be expected to know everything about a product. They will likely run into some problems and they may not necessarily know how to use it perfectly, therefore they must be wary of certain aspects when moving forward. Rogers suggests that despite the fact that the decision has been made the organisation must still continue to seek information in order to avoid problems in the implementation. One way of combatting this is to undertake some form of training in how to use it or implement it. This would help to reduce the probability of errors which could cost the organisation time and money.

When asked if someone within the organisation undertook some form of training into how to use PPC advertising it was discovered that only 44% of businesses undertook training before implementing PPC (Table 25).
Count Column N % 11 44.0% 14 56.0%

Did you or one of your colleagues undertake training on how to use Google Pay Per Click Advertising?

Yes No

Total (n)

25

100.0%

Table 25: Was training undertaken?

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This section of the survey looked to establish when companies implemented PPC, what problems they encountered and how easy they found it too.

The research wanted to establish the ease with which businesses implemented the innovation. Most of the businesses found it relatively easy with 40% of responses saying that on a scale of 1 10 they would have rated the ease of implementation as 8/10. It is also worth noting that the average response was 6.68/10. This is shown in Table 26 below.
Count On a scale of 1 - 10 (with 10 being easy) how easy was it to implement Google Pay per Click Advertising? 1 2 3 4 5 6 7 8 9 10 1 0 3 1 1 3 3 10 1 2 Column N % 4.0% .0% 12.0% 4.0% 4.0% 12.0% 12.0% 40.0% 4.0% 8.0%

Total (n)

25

100.0%

Minimum Maximum Mean Standard Deviation

1 10 6.68 2.32236

Table 26: Ease of implementation

At this point the respondents were asked whether they had any problems when implementing PPC advertising and then whether they had any other comments they wished to make. 89% of people said they did not have any problems and no other comments to make, however some did have problems, many of which can be seen in Table 27 below.

This shows that the implementation of Google PPC is relatively easy for individuals to undertake. It also shows that that there is not a great requirement for training as many of the organisations did not do training on the system yet still managed to implement to program with relative ease. Some people however did encounter problems, as Rogers said would happen. Having looked at these problems many of them seemed to be with the usability of the system and how long it took to get used to. These problems could be addressed though
38

information seeking and especially through training. In Table 27 below the problems that were given to this question have been analysed with other responses to establish whether the organisations took action to try and combat these problems or not.

Table 27: Problems vs. Action Taken

As can be seen above, of the ten problems that were highlighted in the survey, 60% of respondents had made no attempt to information seek to try and combat the problems that they were facing through training themselves in the use of PPC.

4.2.8

Confirmation

This is the stage of the process that takes place sometime after the innovation has been implemented. The innovation has had time to settle and the organisation can now look back and investigate whether the innovation has lived up to expectations or has fallen short). In order to do this, a business will look at what advantages and drawbacks they have seen and make an informed decision as to whether they would continue to use the innovation or discontinue its use (Rogers, 2003).

When asked what benefits the businesses did actually see when they implemented PPC advertising, 75% said that they saw increased enquiries. Increased traffic to their website saw

39

62.5% of the responses and increased sales accounted for 67% of the responses. Of the other results the ability to change and adapt ads gained 33% of the responses, reaching customers globally obtained 29% of the response and 25% saw better quality of enquiries (Table 28).
Count Column N % 18 75.0% 16 15 8 7 6 4 4 3 3 2 4 24 66.7% 62.5% 33.3% 29.2% 25.0% 16.7% 16.7% 12.5% 12.5% 8.3% 16.7% 100.0%

What benefits did you see from the implementation of Google Pay Per Click Advertising? (Choose all that apply)

Increased Number of Enquiries Increased Sales Increased Traffic to Website Ability to change and adapt ads to respond to performance Reaching Customers Globally Better Quality of Enquiries Lower Costs Better Control of Costs The Ability to Remarket None of the Above Improved Customer Relations Other Total Respondents (n)

Table 28: Benefits seen from those using PPC

As discussed earlier there were 6 different advantages of PPC that were outlined in the literature and it was found that the benefits that organisations expected to see matched these benefits fairly well with the addition of three other major advantages which were not in the literature but had the highest responses. This trend continued into the benefits that organisations actually saw. Table 29 below looks at the advantages that organisations did see against the advantages that organisations expected to see. It shows the percentage change as well as the rank that each of the advantages gained during the confirmation stage. This would allow the researcher to see which benefits matched expectations and which fell short. It would also indicate which benefits were present when looking at PPC advertising.

40

Increased Number of Enquiries Increased Sales Increased Traffic to Website Ability to change and adapt ads to respond to performance Reaching Customers Globally Better Quality of Enquiries Lower Costs Better Control of Costs

Number of Expected % of Expected Benefits Responses 21 84.0% 19 19 8 9 6 5 4 76.0% 76.0% 32.0% 36.0% 24.0% 20.0% 16.0%

Number of Actual Benefits Responses

18 16 15 8 7 6 4 4

% of Actual Benefits responses

72.0%

% Change

Rank

-14.29%
64.0% 60.0%

1 2 3 4 5 6 7

-15.79% -21.05%

32.0%

0.00%
28.0% 24.0% 16.0%

-22.22% 0.00% -20.00%

16.0%

0.00%
The Ability to Remarket None of the Above Improved Customer Relations Accountability for advertising spend, quick and easy implementation and optimisation Key word research 2 0 2 0 0 8.0% .0% 8.0% .0% .0% 3 3 2 1 1 12.0%

7 9 9 11 12

50.00%
12.0% 8.0% 4.0%

100.00% 0.00% 100.00%

4.0%

100.00%
More Relevant Traffic Ease of monitoring 0 0 .0% .0% 1 1 4.0%

12 12

100.00%
4.0%

100.00%
Improved position on natural listings Increase Brand/Company awareness Raise profile of business as ads are displayed beside larger companies Ability to target the on-line market place Complete budget control, tracking ability, performance control Able to scale up and down 0 1 1 .0% 4.0% 4.0% 1 0 0 4.0%

12 12 17

0.00%
.0%

-100.00%
.0%

-100.00%
1 1 4.0% 4.0% 0 0 .0%

17 17

-100.00%
.0%

.0%

.0%

-100.00% 0.00%

17 17

Table 29: % Change of expected benefits vs. actual benefits

Despite the fact that the number of responses for increased number of enquiries, increased sales and increased traffic to website fell, indicating that these expected benefits did not match up to expectations, they still remained as the three highest benefits that were obtained through PPC advertising. The 6 advantages that were outlined in the literature also maintained their place relatively well and made up the rest of the top advantages that were given between them. Some of these did fall such as 22.22% of people not achieving the benefit of reaching customers globally and 20% not managing to see lower costs. Other benefits however improved such as the ability to remarket which increased by 50%. These results again show that the advantages that have been expressed in the literature represent the actual benefits that are seen by organisations as well as the other advantages such as number of enquiries, increased sales and increased traffic to website are added in too.

The survey then asked whether or not PPC advertising lived up to the expectations they expected. Table 30 shows that only 37.5% of businesses said that it had lived up to responses

41

and 58.3% said it had somewhat lived up to expectations. Interestingly only one business said that PPC advertising had not lived up to expectations.
Count Has Google Pay Per Click Yes Advertising lived up to the No expectations you expected it Somewhat to? Total (n) Column N % 9 37.5% 1 14 4.2% 58.3%

24

100.0%

Table 30: Has PPC lived up to expectations?

Again only one person said that they would not recommend it with the other 95.8% saying they would or would maybe recommend it and 83.3% said that they would continue to use Google PPC advertising. These results can be seen in Tables 31 and 32 below.
Count Column N % 15 62.5% 1 8 4.2% 33.3%

Would you recommend Yes using Google Pay Per Click No Advertising to other Maybe business users? Total (n)

24

100.0%

Table 31: Would companies recommend PPC?

Will you continue to use Google Pay Per Click Advertising?

Yes No

Count Column N % 20 83.3% 4 16.7%

Total (n)

24

100.0%

Table 32: Will companies continue using PPC

Those who do not continue using PPC will, as Rogers outlines, discontinue the use of PPC. Discontinuing an innovation happens when an organisation initially accepts an innovation and implements it but then decides not to continue to use it in the future. Rogers suggests that there are 2 forms of discontinuance, replacement and disenchantment as discussed in the literature. At this point it is again important to consider those that are not using PPC anymore as well as those who have indicated their intentions to stop using PPC. There were a number
42

of responses that were received from companies that had at one point in the past implemented PPC but then decided for various reasons to discontinue its use.

In order to look at these responses too, the survey asked what benefits the organisation saw when they had implemented PPC advertising. This was done so that they could be compared to those of the organisations that still use PPC and it could be determined how their experiences differed. It then went on to establish what reasons they had for discontinuing its use.

As seen in Table 33, 53.8% of respondents said that they saw increased traffic to the website. 38.5% of responses said that they saw increased enquiries and the ability to change and adapt ads also gained 38.5% of responses.

Count What benefits did you see from the implementation of Google Pay Per Click Advertising? (Choose all that apply) Increased Traffic to Website Increased Number of Enquiries Ability to change and adapt ads to respond to performance None of the Above Increased Sales Reaching Customers Globally Better Quality of Enquiries Other Total (n) 7 5 5 3 2 2 1 4 13

Column N % 53.8% 38.5% 38.5% 23.1% 15.4% 15.4% 7.7% 30.8% 100.0%

Table 33: Benefits of those that stopped using PPC

When compared to the benefits that were seen by organisations that are still using PPC the differences in experiences between the two become very clear as seen in Table 34 below.

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Number of Actual % of Actual Number of Benefits from Benefits Responses Benefits responses those who discontinued
Increased Number of Enquiries Increased Sales Increased Traffic to Website Ability to change and adapt ads to respond to performance Reaching Customers Globally Better Quality of Enquiries Lower Costs Better Control of Costs The Ability to Remarket None of the Above Improved Customer Relations Accountability for advertising spend, quick and easy implementation and optimisation of marketing activity, Key word research More Relevant Traffic Ease of monitoring Improved position on natural listings 18 16 15 8 7 6 4 4 3 3 2 1 1 1 1 1 72.0% 64.0% 60.0% 32.0% 28.0% 24.0% 16.0% 16.0% 12.0% 12.0% 8.0% 4.0% 4.0% 4.0% 4.0% 4.0% 5 2 7 5 2 1 0 2 2 4 2 0 0 0 0 0

% of Expected Responses 38.5% 15.4% 53.8% 38.5% 15.4% 7.7% .0% 15.4% 15.4% 30.8% 15.4% .0% .0% .0% .0% .0%

% Change -46.58% -75.96% -10.26% 20.19% -45.05% -67.95% -100.00% -3.85% 28.21% 156.41% 92.31% -100.00% -100.00% -100.00% -100.00% -100.00%

Table 34: % difference of Advantages of those using PPC Vs Those not currently using PPC

As can be seen from the percentage change in responses, there is a huge difference in the responses that were given from organisations who are still using PPC and those that are not. 100% less respondents reported lower costs, 75.96% less respondents reported increased sales and 67.95% fewer responded with better quality of enquiries. It is clear from these responses that the experiences of these individuals do not match the experiences of those who are still using PPC and it is little wonder that they have stopped using PPC.

Discontinuance can happen at many different points. As the respondents went through the survey they were given a number of opportunities to inform the researcher that they did not continue the process any further and stopped considering PPC advertising. From this the research was able to establish that the respondents left at the following stages in the process (Table 35).

Table 35: % of people that left the process at each stage

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The final stage of the survey was set up to ask why those individuals who did implement PPC in the past decided to stop using it. As well as gaining their reasons this would also provide the disadvantages that people saw.
Count What made you stop using Google Pay Per Click Advertising? (Choose all that apply) High Costs No increase in Sales Did not have enough knowledge of how to use and maintain Not enough time It was not appropriate for our business No increase in traffic to website Big companies with greater spend crowding out It did not provide the quality of enquiry we required Hard to quantify what impact it had Total (n) 9 6 5 3 2 1 1 1 1 13 Column N % 69.2% 46.2% 38.5% 23.1% 15.4% 7.7% 7.7% 7.7% 7.7% 100.0%

Table 36: Reasons for stopping using PPC

When considering the literature that was discussed at the beginning of this study it was noted that there was not any significant research into the disadvantages of PPC. As such this study presented the disadvantages of internet marketing in general. It was stated that as part of this research the researcher would look to establish what the disadvantages of PPC were. As displayed in the table above none of the disadvantages of marketing online as set out by Applegate (2006) have been highlighted by the respondents and as such have no effect. There were a number of responses that stood out from the rest. The highest response rate was for the fact that they had seen high costs (69.2%). This was followed by no increase in sales (46.2%) and a lack of knowledge of how to use it (38.5%) or lack of time (23.1%). These can be seen in Table 36. As was seen in the implementation stage of the process, Rogers theory suggested that, during implementation, organisations must continue to information seek in order to avoid problems. Due to the high advantages that organisations who are using PPC saw, such as higher sales and higher web traffic, it was felt that the lack of knowledge on how to use and maintain the system (38.5%) would have a large impact on how the organisations performed and as such the benefits that they would see. As a result of the way the system is set up, knowing about keywords, bidding and the different options are very important. Not knowing enough about them can see organisations wasting money on areas that produce poor results.
45

4.3 Conclusion
This questionnaire has provided a large number of responses from companies that have gone through different stages of the implementation process. This allowed the researcher to perform a detailed analysis on the results taking into account the literature that was discussed prior to completing the study. This has meant that the researcher can easily identify what happens at every stage and also helps to show both the advantages and disadvantages of PPC advertising in the hope of answering the research questions. The next section of this study will bring all of this together in a conclusion and will establish whether the research questions set out at the beginning of the study have been answered.

46

Chapter 5 Conclusion
This chapter will conclude the study through presenting the conclusions to the research questions and as such the main objective of this study, to determine why small to medium business owners use paid search marketing spaces, the decision making process behind doing so and the advantages and disadvantages that they ultimately see from doing so. This will be achieved by approaching each of the research objectives individually before outlining recommendations for future studies and the limitations of this study.

5.1 Research Objectives

Through the use of literature and primary research this study looked to answer the following research questions: 1. When implementing a new innovation what is the process that management go through at each of the 5 diffusion stages when considering PPC? 2. Why do companies use PPC advertising? 3. What advantages and disadvantages do companies see? 5.1.1 Research Question 1

When implementing a new innovation what is the process that management go through at each of the 5 diffusion stages when considering PPC?

The discussion section clearly outlined the process that management went through when looking to implement PPC advertising. By using these stages as a guide for the questionnaire and asking questions that were appropriate for each stage, the survey was able to provide the researcher with a wealth of information which along with the literature was able to be analysed and conclusions for each stage of the process were drawn.

In the knowledge stage it was concluded that interpersonal communication is more effective than mass-media communication when implementing PPC as discovered by Rogers. Management then moved onto the persuasion stage where it was found that those who do not use PPC did not actively apply the innovation and its uses/benefits to their organisation as much as those that do currently use PPC. The next stage of the process was the decision stage. In this stage it was discovered that managers actively thought about the benefits for their organisations before implementing which gave clear indications as to what they expected to
47

get out of its use. It was also shown that contrary to Rogers theory most companies did not trial the innovation as this was a very even split. The penultimate stage was the implementation stage. This research concluded that training is vital in order to combat problems in the implementation stage as it raises awareness and information seeking. It was also proven that PPC was relatively easy to implement with the vast majority of organisations experiencing no problems. The final stage of the innovation decision process was the confirmation stage. At this stage it showed that there was quite a difference between what benefits the organisations expected to see and what they actually did see. This stage also showed that management still consider the implementation after it has taken place and can discontinue using PPC for various reasons. This section was vital in establishing the advantages and disadvantages of PPC for the study. This research was also able to establish at what points in the process organisations leave the process and for what reasons

5.1.2

Research Question 2

Why do companies use PPC advertising?

By asking companies what benefits they expected to see before implementing PPC advertising this study was able to determine organisations motives for implementing PPC advertising and as such answer the second of the research questions.

It was found that organisations used PPC for various reasons. This research established that the main reason that businesses look to use PPC is for increasing the number of enquiries to the business, increasing traffic to the website, using PPC to gain more sales and also in order to try and reach customers globally. Many of the other, less responded to, answers followed closely with the benefits of PPC that were outlined by the literature and as such were expected by the researcher.

5.1.3

Research Question 3

What Advantages and Disadvantages do companies see?

The final research question looked to establish what advantages and disadvantages organisations saw from the implementations of PPC advertising. This meant asking the respondents what benefits they saw from the implementation of PPC as well as the reasons

48

why organisations stopped using PPC, which would highlight the disadvantages to the researcher.

It was found that after implementing PPC advertising the main advantages that organisations saw were an increased number of enquiries and traffic to the website. These enquiries were generally seen as being of better quality and lead to increased sales too. Companies were also able to reach customers on a global basis. Many of these advantages agreed with the literature that was outlined however, some of these were established thanks to this survey.

This research also established the disadvantages that organisations faced too. A large proportion saw large costs associated with implementing PPC advertising. While some organisations saw an increase in sales, many also reported that they did not see any increases in sales and it was also found that PPC advertising was time consuming too. It was however, established, in line with Rogers theory, that because of the large proportion that said they did not have enough knowledge of the system this would contribute to the fact that they experienced poorer results from the system and would contribute to the higher costs and lack of sales. This is not the case with all of the organisations and it is also the case that PPC is just not suited to some types of organisations.

As can be seen from the conclusions above this study has successfully answered the research questions that were asked and has achieved the objectives set out at the beginning of the study. This study has successfully established Why managers use PPC advertising, the decision making process behind doing so and the Advantages and Disadvantages seen as a result

5.2 Recommendations for future research

It is felt that there is a wide range of future research that could be conducted to further the research of this area. The first area that could be looked at is the impact that training has on the success of PPC advertising. It was discovered throughout the research that many organisations do not undertake training when implementing PPC advertising. As it can be a rather complicated system this can only mean that such organisations are not getting the most out of it and wasting resources. It is felt that there is further research that could be done into the disadvantages of PPC advertising as well.

49

5.3 Limitations of the study

The first limitation that was encountered was the very low amount of research on paid search advertising. This made it difficult to present research which covered all aspects of the study and meant that some less relevant information was included. This did however allow the researcher the opportunity to discover these areas through their own research.

It was also found that while the organisations were willing to complete the survey there was very few who were willing to expand on answers when asked to do so. After giving the benefits and disadvantages, one of the questions in the research asked for organisations to provide any figure which backed up these responses. It was hoped that by doing this the researcher would be able to gain an understanding as to the extent that these benefits were seen. However as this data could have been seen as sensitive and despite the fact that there were assurances of confidentiality in place only one person was willing to give any information which made it very difficult to ascertain the full benefits and disadvantages that were seen.

50

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ROGERS, E. 2003. Diffusion of Innovations, New York, Free Press.

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YAHOO. 2010. Yahoo Anual Report 2010 [Online]. Available: http://www.shareholder.com/visitors/dynamicdoc/document.cfm?documentid=2967& companyid=YHOO&page=1&pin=&language=EN&resizethree=yes&scale=100&zid =b85dd6ea [Accessed] 30/10/2012.

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Chapter 7 Appendices
7.1 Appendix 1 Ethics Statement
The following statement was placed at the beginning of the questionnaire in order to display the purpose of the study, the ethical considerations and the contact details of the researcher. Thank you for taking the time to complete this survey. The aim of this research is to establish the reasons as to why small business owners use paid search marketing spaces, the decision making process behind doing so and the benefits that they ultimately see. Please respond to the questions that follow as honestly and thoroughly as possible. Some answers require just one choice, others are multiple choice and some require a small bit of written text. Depending on your answers the survey should take no more than 10 - 15 minutes to complete. All information that is provided is anonymous. All information will remain confidential and will only be accessed by myself and my dissertation supervisor at Heriot Watt University. No sensitive, financial or identifying details of your company will be published in the final report without previous consent being given by the company. As this research is voluntary you are welcome to leave the process at any point. Should you have and questions or concerns you can contact myself or my dissertation supervisor. Student: Donald Maclean, dm227@hw.ac.uk Supervisor: John Sanders, J.W.Sanders@hw.ac.uk Should you wish to make a complaint about this study on ethical ground please contact: James Richards, jr8@hw.ac.uk Thank you for your time in completing this survey Donald Maclean

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7.2 Appendix 2 Email asking for participations

The following appendix incudes an example email that was sent to an individual when inviting them to complete the survey.

Hi XXXXX My name is Donald Maclean and I am a final year student studying International Management at Heriot Watt University in Edinburgh. As part of my final year studies I have to complete a dissertation. The topic of my dissertation looks at the reasons as to why small business owners use paid search marketing spaces, the decision making process behind doing so and the benefits that they ultimately see. In order to establish this I am required to do a survey and I am asking business owners and marketing managers of small to medium businesses who have been involved in the decision making process behind adopting paid search advertising or not. I am looking for responses from companies that do use paid search advertising and those that do not too. I would appreciate if you were able to forward this email onto the person who would be best suited to answer those types of questions. For example, a Managing Director or Marketing Manager. I thought I would get in touch with yourself to firstly see if you are able to fill out the survey for me, Secondly if you are able to pass it on to people you know of who would fit into the criteria I am looking to get as many responses as possible to make the data as reliable as possible and any help is greatly appreciated. The time it takes will vary depending on the answers given but it should not take any longer than 10 - 15 minutes. All responses are anonymous and all information will remain confidential and no personal or identifying detail will be included in the final study without prior consent. A final copy of the report can be sent to yourself once complete if you would wish too. The link to the survey is: http://www.eSurveysPro.com/Survey.aspx?id=23ac1ec3-9f0c-4287-b7a7-c6160b1eeb7e I really appreciate your help and Thank you for your help in advance. Donald Maclean
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7.3 Appendix 3 - Questionnaire Questions

1) How many people does your company employ? a. 1 20 b. 20 50 c. 50 100 d. 100 200 e. 200 250 f. 250 + 2) What industry is your business in? 3) In order for your company to fit within the boundaries of this study they must be a Small to Medium business. This is defined as a company which has less than 250 employees and a turnover of less than 40 million. Please tell us roughly what is the turnover of your company? a. b. c. d. e. f. g. h. i. <250000 250000 500000 500000 1 million > 1 million and <2.5 million 2.5 million - 5 million 5 million - 10 million 10 million 20 million 20 million - 40 million 40 million +

4) Roughly what is your marketing budget each year? a. 1 - 25000 b. 25000 - 50000 c. 50001 - 100000 d. 100000 - 250000 e. 250000 - 500000 f. 1 Million + g. Would rather not say 5) Do you currently use Google Pay Per Click Advertising (Google Adwords) a. Yes b. No 6) Have you ever used Google Pay Per Click Advertising? a. Yes b. No
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7) Have you heard of Google Pay Per Click Advertising? a. Yes b. No 8) Where did you first hear about Google Pay Per Click Advertising? a. A Business Partner b. An Employee c. A Friend d. Family Member e. From a Professional Organisation f. In the Media g. Google h. Other (Specify) 9) When did you hear about Google Pay Per Click Advertising? a. Less than a year ago b. 1- 3 Years ago c. 3 - 7 Years ago d. 7 - 10 Years ago e. 10+ Years ago 10) Was it something that you were actively searching for or had a need for? a. Yes b. No 11) Did you try to find out more information about Google Pay Per Click Advertising? a. Yes b. No 12) What was your reasoning behind not looking into Google Pay Per Click Advertising Further? (Choose all that Apply) a. It did not interest me b. I did not have time c. It was not my decision to make d. It came at the wrong time e. Other (Specify) 13) After hearing about the product, what inspired you to find out more about Google Pay Per Click Advertising? (Choose all that apply) a. The benefits talked about b. The success stories of current users c. You were looking for a new way to advertise d. For personal interest e. Because it was something new
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14) Once you had this information did you decide to look into Google Pay Per Click Advertising further? a. Yes b. No 15) What was your reasoning behind not looking into Google Pay Per click Advertising further? a. It did not interest us any more b. We did not have time c. It was not my decision to make d. It came at the wrong time e. The benefits did not match what we were expecting f. We heard negative reports from others g. It was not suited to our company h. We could not afford to train a member of staff in how to use it i. We did not have time to train a member of staff in how to use it j. It seemed like a lot of effort for little reward 16) Did you go as far as to start using or trialling Google Pay Per Click Advertising? a. Yes b. No 17) What benefits did you see from the implementation of Google Pay Per Click Advertising? (Choose all that apply) a. Increased Number of Enquiries b. Better Quality of Enquiries c. Increased Traffic to Website d. Increased Sales e. Lower Costs f. Better Control of Costs g. Improved Customer Relations h. Ability to change and adapt ads to respond to performance i. Reaching Customers Globally j. The Ability to Remarket k. None of the Above 18) Please provide any other advantages you have seen thanks to Google Pay Per Click Advertising that are not listed above. 19) If you wish please provide any evidence of these advantages (eg sales figures, enquiry numbers, traffic numbers etc) 20) What made you stop using Google Pay Per Click Advertising? (Choose all that apply) a. High Costs
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b. c. d. e. f. g. h. i.

No increase in Sales Did not have enough knowledge of how to use and maintain Reduction in Customer Satisfaction It was not appropriate for our business No increase in traffic to website Not enough time Had nobody who could be made responsible for it None of the above

21) Apart from the disadvantages listed above, were there any other reasons for stopping the use of Google Pay Per Click Advertising? 22) When did you hear about Google Pay Per Click Advertising? a. Less than a year ago b. 1- 3 Years ago c. 3 - 7 Years ago d. 7 - 10 Years ago e. 10+ Years ago 23) Where did you first hear about Google Pay Per Click Advertising? a. A Business Partner b. An Employee c. A Friend d. Family Member e. From a Professional Organisation f. In the Media g. Google h. Other (Specify) 24) Was it something that you were actively searching for or had a need for? a. Yes b. No 25) After hearing about the product, what inspired you to find out more about Google Pay Per Click Advertising? (Choose all that apply) a. The benefits talked about b. The success stories of current users c. You were looking for a new way to advertise d. For personal interest e. Because it was something new f. Other (Specify) 26) Which of these benefits was the main reason you decided to look into Google Pay Per Click Advertising even further? (Please choose the most appropriate answer)
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a. b. c. d. e. f.

The benefits talked about The success stories of current users You were looking for a new way to advertise For personal interest Because it was something new Other (Specify)

27) Did you or one of your colleagues undertake training on how to use Google Pay Per Click Advertising? a. Yes b. No 28) What benefits did you expect to see from the implementation of Google Pay Per Click Advertising? (Choose all that apply) a. Increased Number of Enquiries b. Better Quality of Enquiries c. Increased Traffic to Website d. Increased Sales e. Lower Costs f. Better Control of Costs g. Improved Customer Relations h. Ability to change and adapt ads to respond to performance i. Reaching Customers Globally j. The Ability to Remarket k. None of the Above 29) Please provide any other advantages you expected to see thanks to Google Pay Per Click Advertising that are not listed above. 30) Did you trial the product before making a final decision? a. Yes b. No 31) When did you implement the use of Google Pay Per Click Advertising? a. Less than a year ago b. 1- 3 Years ago c. 3 - 7 Years ago d. 7 - 10 Years ago e. 10+ Years ago 32) On a scale of 1 - 10 (with 10 being easy) how easy was it to implement Google Pay per Click Advertising? 33) Did you encounter any problems while starting to use Google Pay Per Click Advertising?
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34) Do you have any other comments regarding the implementation of Google Pay Per Click Advertising? 35) What benefits did you see from the implementation of Google Pay Per Click Advertising? (Choose all that apply) a. Increased Number of Enquiries b. Better Quality of Enquiries c. Increased Traffic to Website d. Increased Sales e. Lower Costs f. Better Control of Costs g. Improved Customer Relations h. Ability to change and adapt ads to respond to performance i. Reaching Customers Globally j. The Ability to Remarket k. None of the Above 36) Please provide any other advantages you have seen thanks to Google Pay Per Click Advertising that are not listed above. 37) If you wish please provide any evidence of these advantages (eg sales figures, enquiry numbers, traffic numbers etc) 38) Has Google Pay Per Click Advertising lived up to the expectations you expected it to? a. Yes b. No c. Somewhat 39) Has Google Pay Per Click Advertising lived up to the expectations you expected it to? a. Yes b. No c. Maybe 40) Will you continue to use Google Pay Per Click Advertising? a. Yes b. No 41) If not why not? 42) There may be instances where the researcher may wish to contact an individual very briefly to further discuss their results and obtain further information. If you are willing be contacted please provide your email address in the box below. 43) If you wish to receive a copy of the final study please provide your email address below:
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7.4 Appendix 4 Questionnaire Branches

The Diagram Below shows the flow of questions in the questionnaire and the different branches

Q1

Q2

Q3

Q4

Q5

No

Q6

No

Q7

Q22

Yes

Yes

No

Q23

Q8

End of Survey

Q24 Q9 Q25

Q26 Q10 Q27 Q11 Q28 No Q12 End of Survey

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Q29 Q13 Q30

Q31 Q14 Q32 No Q15

Q33

End of Survey Q16 No

Q34

Q35

Q17

End of Survey

Q36 Q18 Q37

Q38

Q19

Q39

Q20

Q40 Q21 Q41 End of Survey End of Survey

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