PPC Principles To Rely On

Writing by Nick Stamoulis

Memorial Day – you’d think this guy was out surfing or something. Instead, he was working. Memorializing his fingers to the keyboard. Still, I like what he has to say about pay-per-click management.

1.- Separate Content from Search
Online Marketers need to view their contextual listings campaigns differently from search, because the results and the customer are different. It is normal to expect lower clicks and conversion rates, with it not being a qualified, targeted lead. This does not necessarily mean an advertiser should not participate in content buys that decision is ultimately up to the statistics. The separation provides much more insight into what is working, and more importantly what is not working.

Amen to that. This is very important to remember. The traffic you get from organic listings and pay-per-click ads are very likely to be different. For one thing, most people will click on the organic listing. Some people, in fact, will never click on a PPC ad. The people who do click on a contextual are more likely to make a purchase than people who don’t. That’s because organic searchers are primarily researchers, or people looking for information. They are more likely to find what they want to purchase and go to a local store to buy it. Your PPC traffic, however, could very well have their credit card in their hand. Chances are, they’ve already done some research on your subject and know what they can buy and where. If, when they click on your ad, they see something they like and it beats everything else they’ve come across in their research then you’ve likely made the sale.

2.- Control spending by adjusting bid amounts, not daily spend budget
Often, the funds are simply not available to meet the demand (which that in itself could use some analyzing; because if a campaign is optimized correctly then the return should justify any spend.)

It is important not to control spending based on the daily budget. Advertisers need to lower the bidding cost, to reach the maximum amount of target customers. Controlling spending based on daily budget, leaves too many customers on the table.

This is counterintuitive, but I agree. If your daily budget is $10 and you draw back to $5 to cut spending, but you leave your ad clicks at $1 per click, that’s only 5 customers you’re making a pitch to. But if you leave your daily budget at the higher amount and draw back to 80 cents per click then you still have a lot of customers you can pitch to – 12.5 to be exact. Would you rather make your sales pitch to 12 people or 5 people? Remember, it’s a numbers game and you stand a much more likely chance of making a sale.

Let’s suppose your conversion rate is 10%. Pitching to 5 people a day means you will make 1 sale every 2 days. Pitching to 12 people per day means you will make at least one sale every day and you’ll make 2 sales on every 15th day.

3.- Create a negative keyword list
Eliminating unwanted traffic is an easy step to lower cost and improve conversion. All of the major pay-per-click providers allow an advertiser to create a negative list of keywords. In this case, less is more. Although this results in less traffic, the traffic that is eliminated is unwanted (non-buyers).

An example of negative keywords would be a site selling soap. If the consumer searches for any of the following, the advertiser would not want to pay for that visit: “soap opera”, “soap digest”, etc. The list of negative words could be: -opera, -digest, -abc

Another useful tip. I don’t always use negative words, but in the above example you’d definitely want to use them. Any time you have a keyword that is as versatile as soap, you’ll want to add negative keywords.

Also, after a period of two or three weeks you should see which of your keywords are getting the most click throughs and the most conversions. If you have a keyword that is getting a lot of click throughs but few conversions, or none, then you can add that keyword as a negative keyword. At the least, pause the ads for that keyword. But I’d probably just add it as a negative keyword because low conversions means you’re spending money that you’ll likely not get back.

This isn’t a hard and fast rule, however. A lot of it depends on the price you charge for your products. If you are getting click throughs, for instance, at 5 cents and you cell a product that costs several hundred dollars (say $300), you could sell 1 unit after several thousand clicks. If your conversions are 1 for every 800 clicks then you’ll still make a huge ROI for that keyword. So think in terms of your ROI.

4.- Conversion matters, not click-through rate (CTR)
This point seems to finally be making its way to marketers. However, there are still a few that seem to think that quantity is better than quality. As any pay-per-click expert can tell you, it is easy to get traffic. Getting that traffic to buys is another story. By using all of the other habits listed here, the pay-per-click advertiser can weed-out unwanted traffic and only pay for conversions. It is important to keep an eye on the Cost per Conversion. How much does a customer cost? Not a click.

This is the one that probably gives most pay-per-click marketers the most problems. It doesn’t matter what your click through rate is if you don’t make any conversions. It’s the same with organic traffic. Who cares that your site receives 5,000 unique visitors per month if you aren’t making any money off of them? There must be something wrong with the copy on your website.

Don’t always think the problem is with your ads. Conversions happen because your website sells. If you get a lot of traffic and you aren’t converting it then it’s time to rewrite your website copy so that it sells.

5.- Avoid #1
Bottom line: The number one position is a bad ROI.

Often times that can also be said about the #2 and #3 position. The traffic coming from the top positions are not buyers, they are just researching. Serious buyers WILL go to the 3, 4, 5 position. When the consumers are ready to buy, they will be back. Be patient.

This one really depends. If you have a very competitive market then the No. 1 position might be the best place to be even if you do have fewer conversions. That’s because you can never underestimate the power of branding. Of course, ROI is important so if being No. 1 is going to bankrupt you then don’t worry about branding. You can always work up to that if you need to. The bottom line is, you have to pay attention to all of the benefits that PPC provides.

If you get a huge ROI at the No. 3 and No. 4 positions and a very small one at No. 1, so small that it is causing you to lose money, then go with the lower positions. If, on the other hand, the No. 1 position is a break even position for you then you have to weigh the benefits of branding versus ROI.

Some PPC marketers adjust their positions according to the time of year. If Christmas is a hot season for you then maybe you want to be No. 1. Then you drop down to a lower position for the slow seasons. Or vice versa. If the ROI differential for your peak season is tremendous then you might want the lower position that offers you more ROI so that you can maximize the ROI on your advertising. It is conceivable that you can maximize your ROI during peak seasons so that even if you lose money in the slower months you still come out ahead in the long run. These are all concerns you have to think about in your advertising efforts – whether PPC or otherwise.

6.- Bid Exact, Avoid Broad
This one takes time and a lot of work, but probably one of the best ways to get strong ROI on pay-per-click marketing. By using exact matching, the advertiser is eliminating the researcher and getting straight to the buyer. Like many of these habits the traffic will decrease, however conversion and online revenue should increase. The best way an advertiser can start is to triple the keywords by creating broad, exact and phase of every keyword. Then, after reviewing analytics, gradually eliminate broad, and possibly phrase keywords that result in lower conversion.

This is absolutely essential, especially for long-term pay-per-click campaigns. Exact phrases will almost always do better than broad categorical phrasing. That’s because people often make specific searches and when they do the search engines will return specific results. It’s all keyword-based.

7.- Good Analytics
All of the above habits can not be truly comprehended with out strong analytics. A reliable analytics program is the backbone of any online (and often offline) marketing campaign. Determining the cost per conversion, the unwanted visitors, the negative keyword list, the ROI – all require dependable analytics.

If you can’t measure it, you can’t change it. If you can’t measure it, you can’t analyze it. If you can’t measure it, you can’t do anything about it all. No sense even speculating about what works and what doesn’t if you can’t measure what you’re doing. Google has an excellent analytics program and I highly recommend it.