A report claims internet-based firms who spend more on Pay Per Click (PPC) methods than other types of online marketing are seeing their profits fall.
Sage Pay’s third annual e-business Benchmark Report, which looked at 1,500 online UK companies, shows that although PPC was the most popular way for businesses to drive web traffic, it produced fewer transactions when compared with the likes of social media.
In 2012 the largest proportions of marketing budgets went on PPC. But the research found companies which spent around 27% of their budget on PPC were more successful than those who spent 35% on it.
And the most profitable firms spent around a quarter of their marketing budget on social media, while those making less money tended to devote just 19% to that method of promoting their business.
The report also shows that almost three quarters of firms have optimised their websites for m-commerce and are spending more on developing apps and ongoing optimisation.