PPC Without Pity

When creating a new PPC campaign or ad group, there’s an important choice to make with your text ads. Should you set text ads to rotate evenly, or optimize their distribution according to what the search engine thinks is best? Before you choose, you should think about how each distribution is calculated, and how it will affect your data collection for optimization purposes.

First off, you should always be running two to three text ads per ad group. That way, you can test different value propositions in your ads to see which one works best. After a month or two goes by, you can then compare the total conversions, conversion rate, and click-through rates of your ads to find the top performer. If your ad groups tend to get a lot of traffic, run three ads to test multiple factors at once. If your ad groups are low-traffic niche groups, you may need to run only two ads at a time to ensure you collect enough data for a reliable sample.

Choosing rotated or optimized ads will also affect your data collection. Rotating ads is pretty straightforward – each ad gets equal exposure. Optimized ad serving is where it gets a little trickier. By setting your ads to optimized serving, you allow the search engines to choose which ad gets the most exposure, since they will choose the “best” ad after a certain amount of data is gathered, then allow that ad to run the majority of the time.

This may sound good on the surface, but you also need to keep in mind that the search engines will choose the “best” ad based on their own criteria. This probably means that they will choose the ad with the highest click-through rate, since more clicks equals more money for Google, Yahoo, or Microsoft. This may not be in your best interest. The ad with the highest CTR may also have the lowest conversion rate. You could be racking up click costs without seeing conversion results if you trust search engines to “optimize” your ad distribution.

Of course, this is not always the case. Sometimes optimization is on the mark, and you can have a decent performing ad group without the hassle of constantly rotating ads yourself. For advertisers that just want a “set it and forget it” solution, you’ll probably be okay with optimized ad serving. But, if you are a serious PPC marketer, you will need to run evenly-rotated ads for two reasons. First, having even rotation ensures that you will have a valid statistical sample at the end of your text ad experiment, since all ads in the group will have an equal chance to succeed. And second, choosing not to rely on the search engines lets you choose your own success metric. If you want to optimize for conversion rate, you can do that. If you want to optimize for CTR, that’s okay too. You don’t have to rely on a third party to tell you what your “best” ad is, since you will have a much better idea of what is successful for your own business.

Most of the time, I choose to set my new ad groups to rotate evenly. But then again, I’m a huge PPC geek who loves to split-test things. Think carefully about what optimizing or rotating your text ads means for your business before you make a commitment. Don’t blindly rely on a search engine to automatically do your PPC campaign optimization for you.

In the world of pay per click marketing, we often focus on new customer acquisition. Much thought has been put into the buying cycle, and reaching customers who are in the research, comparison, and purchase phases. But there’s another type of customer that often gets overlooked in PPC campaigns – the returning customer.

Business research shows that acquiring a new customer can cost five to ten times more than retaining an existing one. This is especially true in pay per click, where we are constantly concerned with ROI and cost per conversion. Fortunately, return customer traffic can be really cheap if you know what you’re doing.

The best way to enable return customers is to run a “branding” campaign based on your company name and brand name keywords. There is some controversy in the PPC world regarding whether or not you should bid on your own brand name keywords. Some people think it’s a waste of money, since you’ll probably get organic results anyway. However, I think that it’s a good idea for a number of reasons. First, you may not be ranking well on your own brand search terms, especially if your company or web presence is relatively new. Adding company-related PPC keywords to your campaigns guarantees coverage. Second, having more results show up for your company on search engine results pages is never a bad thing. Even if you have multiple listings in both organic and paid search, you can dominate the SERP so that customers are certain that you’re the best option. Third, running a branding PPC campaign can help protect you if competitors are running a PPC campaign using those keywords. This is not explicitly banned by the search engines, but you can get them taken down if you register a complaint. However, running your own branding campaign offers insurance while you wait on the conflict to be resolved. And lastly, brand keywords tend to have really low bids due to the lack of competition. It’s the last niche to get ten, twenty, or thirty cent CPC keywords, so your actual traffic costs will probably be pretty minimal.

Having a strong PPC presence for your brand terms will help you bring back people who bought from you before, but might not remember your website. You’ve probably done this before – you don’t remember a URL, so you just search for a company name. Wouldn’t you want to make sure that those people are sure to find your website? Tailor your text ads with words like “official site” and other phrases that show searchers exactly where they need to go.

Finally, you can entice return customers with coupons and special offers. You can add in a coupon code to your text ads in your branding campaign, or bid on keywords like “{company name} coupons” or “{company name} promo code”. In this economic climate, everyone is looking for a deal. Plus, if customers have a special coupon code, they may feel obligated to use it. This could be especially effective if you add in a specific expiration deadline – it’s a great way to push sales in a flagging month.

Since CPC costs for brand name terms are so low, it couldn’t hurt to run a test campaign to see how it goes. I’m sure you’ll find that your cost per conversion is much lower than the rest of your campaigns and your conversion rates will be really good. And, most importantly, you’ll be showing your return customers that you know they are there, and that you value their business.

Making effective PPC keyword bids is part art, and part science. It can be a daunting task deciding what your keyword bids should be, especially since there’s quite a bit of money on the line. If you bid too low, you risk your ads never showing on the first page results, and having only a mere trickle of traffic coming to your site. If you bid too high, you can get top keyword positions, but the expense could be so great that your return on ad spend can dip into the negatives.

In order to make an effective keyword bid, you need to start with a baseline figure of your target cost per acquisition (CPA). Figure out what the absolute maximum is that you can pay for a lead, sale, or conversion and still make a profit. Then, dip into historical data to know what kind of conversion rate you can expect to get on that particular keyword (for new keywords, you’ll just have to make your best guess). Finally, to determine the maximum amount you should bid, you need to multiply your target CPA times your expected conversion rate.

So here’s the formula:

Target CPA x Expected Conversion Rate = Max PPC bid

Here’s an example. Let’s say my target CPA for selling widgets is $50. Based on my historical PPC data, I can see that my conversion rate for widget keywords is around 5%. So I would multiply $50 times 5% to find that the maximum amount I should bid on widget keywords is $2.50.

Of course, just because you bid $2.50 on a PPC keyword doesn’t mean that you’re going to be paying exactly $2.50 for every click. That gives you a little wiggle room (and profit!) to work with.

In some cases, you may find that your max CPC bid isn’t enough to get you on the first page, either due to CPA restrictions, intensely competitive verticals, or poor quality scores. In this case, you should probably just let go of these keywords and pick some other ones that might be a little less competitive and a little more profitable for you. By using this handy PPC bid formula, you can make sure that your campaign expenses stay on track, and that you’re getting a good ROI for all of your active PPC keywords.

When managing a pay per click advertising account, it helps to have a lot of software tools to help you manage your account, discover new keywords, track success, and perform split-tests for you. There are a lot of people out there who would love to sell you an expensive software package to accomplish these tasks. But, in my experience, everything you need to do in a PPC account can be accomplished through free tools that are easily available online. Read on for my choices of the six best free PPC tools:

6. Google Insights For Search – This tool gives you access to the vast amount of data that Google has collected on keyword searches and internet traffic trends. Simply type in the search terms you want to learn more about, select the time frame and geographic area you want to analyze, and you can view trends and relative popularity of any search term that has enough search volume to matter. This is great for discovering how popular your PPC keywords could be, as well as getting a look at likely seasonal trends before they happen.

5. MSN AdCenter Desktop – MSN AdCenter usually has the lowest traffic of the big three PPC providers, but this will soon change once Yahoo’s web properties switch to Bing search. If you’re doing PPC on either Yahoo or Bing right now, you’d better learn MSN’s tools now before your traffic increases drastically. Fortunately, MSN has recently released a desktop editor for their MSN platform, although it is still in beta. If your account meets the right requirements, you could be eligible to download it – see the above link for the steps you need to take. This desktop editor can help you make mass changes to your MSN AdCenter account, like adding multiple keywords, creating text ads in bulk, or other mass campaign/ad group changes. It certainly makes managing an MSN account a lot faster, since you don’t have to wait for multiple pages to load and re-load like in the web interface.

4. SEO Book Keyword Tool – There are lots of good keyword tools out there on the web, most of which are provided by the search engines themselves. But who wants to go back and forth between multiple keyword tools to make a single keyword list? SEO Book has a really awesome aggregator that pulls keyword data from multiple keyword tools like Google, Yahoo, and WordTracker. It’s one-stop shopping for all your keyword research needs. This tool does require that you have an SEO Book account, but registration is free. You also get access to a lot of other SEO Book resources, so it’s a pretty good deal.

3. Google Website Optimizer – Have you heard about how awesome split-testing and multivariate testing are, but the thought of doing all those statistics makes your head spin? Well, you’re in luck. With Google’s Website Optimizer tool, all you need to do is create a few variant pages, cut and paste some javascript code snippets, and the tool does the rest. It even crunches the numbers at the end to tell you conclusively which of your variant pages performed the best. And, with it’s multivariate testing feature, you can choose a set of elements (buttons, images, blocks of text, etc.), and the tool will automatically mix them up in different combinations to see which is the most effective. Split testing your landing pages couldn’t be easier.

2. Google AdWords Editor – After managing accounts with AdWords Editor, I can’t imagine doing it any other way. In fact, I hardly ever use Google’s web interface to work with PPC accounts anymore. This desktop application lets you download your account info, make whatever changes you need, then upload the changes to the web interface. It’s easy to copy and paste any element, from campaigns down to keywords. You can even select multiple keywords and change bids by percentage or dollar amount. I could do a dozen posts about all the features that it has, so it’s probably better to just read Google’s own documentation about this product. And, of course, it’s 100% free. Probably one of the best bargains on this list, considering the wide range of functionality it has.

1. Google Analytics – If you’re going to run a PPC account effectively, you must have a reliable web analytics system in place. Period. You need to be able to keep track of your web traffic, monitor how your organic and paid site traffic is interacting, and look at what keywords people are using to find your site. Google Analytics does all of this for free, and is incredibly easy to implement – just cut and paste a javascript snippet on to every page of your site, and you’re done. What’s more, there are infinite filters and segmentation formulas to allow you to customize your data. You can even set up alerts to let you know when key metrics are rising or falling. With all of this functionality, you’d probably expect to pay a hefty monthly fee for the privilege. But, unlike a lot of similar web analytics packages, this one is 100% free.

Got any more great free PPC tools? Let’s hear about them in the comments.

A common mistake that a lot of pay per click rookies make is loading up their accounts with hundreds of useless negative keywords. I’m all for the judicious use of negative keywords, since they help filter out traffic that won’t ever convert for you, and help you keep your cost per conversion in check. However, if you follow automated suggestions to bulk add a lot of negative keywords, you could be excluding traffic that could potentially offer some positive results.

When first-timers set up a new PPC account, a lot of them just follow the automated instructions since PPC can be really intimidating if you’re new to it. Tools like the Google Keyword Tool can give you suggestions for negative keywords, but it can’t tell you what negative keywords your specific account needs. What’s worse, they “conveniently” offer an option to bulk-add a ton of negative keywords, which are probably only tangentially related to your search terms (if that) and would probably never show up in a search query report. Why Google would try to make you get less search traffic, I’ll never know. Usually their automated suggestions for account improvement involve giving more money to Google…

But I digress. If you bulk-add keywords like this, you’re going to end up with a long, convoluted list of negative keywords like “porn,” “world of warcraft,” or “butt.” Having a lot of unrelated terms in your negative keyword list can create a lot of noise that distracts you from the really important negatives you have. If you’re going to get serious about excluding traffic you don’t want, you need to look at what keywords are actually driving traffic but not converting – wasting your PPC money. The only way to do this is to analyze your search queries by running a search query report. Look for keywords that are getting a lot of clicks, but aren’t converting. Then, add these keywords to your negatives list. It’s as simple as that. Don’t let some automated system push you around. You really need to do the analysis, and find which keywords are affecting you specifically, since everyone’s PPC situation is unique.

As of this writing, neither Yahoo or Bing has a comparable search query tool to Google. However, it’s not a major leap of faith to assume that the same bad keywords are being bad across every search engines. Feel free to add the negative keywords you find in your Google reports to your other PPC accounts. Keep an eye on your conversions and CPC. If your conversions stayed the same or got better and your CPC went down, then you did good. If your CPC stays the same or goes up, and your conversions drop, then go easy on the negative keywords to get back some of that converting traffic.

So you’ve done your keyword research, and you think you have a pretty good, relevant set to run with. But you still have a few choices to make. For starters, what type of keyword match type should you use? Here’s a breakdown of all the PPC keyword match types, and the kinds of situations they are useful for:

• Broad Match: The default match type for the search engines, and for good reason: they generate a lot of clicks, which means a lot of money for the search engines. Having keywords set at broad match means that the search engines will make a rough approximation of what they think is relevant to your chosen keyword. And they will probably make a very liberal interpretation of what is relevant. I’ve pored through search query reports and seen broad match furniture keywords show ads under a search query for housewife porno. Do you really want your ads showing up for everything? Stay away from broad match if you’re on a tight budget and can’t afford any extra wasted clicks.
  
  Broad match does have it’s uses, though. If you’ve got a large enough budget and can afford to waste a little of it in the name of research, broad match can be a fantastic keyword research tool. Since it picks up everything, including those super-obscure long tail keywords that you probably wouldn’t think of targeting, you can run a set of broad match keywords for 30 days or so and then analyze your search query reports to see what you missed in your initial keyword set. Then, you can add those missed keywords in, change everything to a more specific match type, and run a more efficient campaign.




• Phrase Match: Phrase match is a good middle-of-the-road solution to the match type problem. Under phrase match, a user’s search query must match the keywords you specified (including word order), although your ads will also show if they add more keywords before or after the keyword(s) you specified. For example, if you were bidding on “pizza delivery,” your users would see your ads if they typed in “pizza delivery in austin,” but they wouldn’t see your ad if they typed in “delivery pizza” or “pizza fast delivery.”
  
  Phrase match is good because it filters out a lot of that weird, marginally-relevant traffic that broad match brings in, but it still allows you some leeway to overlook some terms that a user could type in. It’s a good idea to start out new campaigns with phrase match, and then switch later to either broad or exact match if you decide that you need more or less traffic to your site.




• Exact Match: If you’re having a lot of trouble with unqualified traffic, exact match is the way to go. Keywords set to exact match will show ads when the user types in a search query that matches your keyword, and nothing more. You’re going to block out a lot of traffic with this setup, but if you see a lot of junk traffic coming through in your search query reports, sometimes you need to take drastic measures to keep your cost down.




• Negative Matches If you see a few troublesome search queries in your reports, but don’t want to take a measure as drastic as setting everything to exact match, then some creative use of negative keywords may be in order. Negative keywords prevent ads from showing whenever a search query contains a keyword listed in your negatives. You can also set negative keyword match types for more precise targeting – negative match types have the same effect as the ones mentioned above.

Yahoo Search Marketing has some special match types, since they don’t use the broad/phrase/exact standard that Google and MSN adhere to. Here are the Yahoo match types:

• Standard: Standard match functions almost like the aforementioned exact match type, but allows for plurals. For example, if you were bidding on the keyword “lamp,” a user that typed in “lamps” would not see your ad under the exact match type, but would see it under the “standard” match type.




• Advanced: Advanced match type works like the broad match type. Your ads will show if a user misspells their search query or appends additional words before, after, or in between the keyword phrase you’re bidding on.

As with any pay per click marketing strategy, it’s important to test out different match types to see which one works best for each campaign. These instructions should give you a good starting point, but don’t forget to analyze those search query reports to make sure your keywords are driving the kind of quality traffic you need.

Whenever you see a significant change in your PPC account performance, it’s only natural to wonder about the cause. Did your new keyword additions have any effect? What caused that sharp drop in clicks? In order to keep track of cause and effect, you’ll need to have a coherent strategy for keeping track of your account changes so that you can look back on your timeline and see which account changes correlated with changes in your metrics.

You can do this with something as simple as pencil and paper, or as complex as some project management software. You’ll probably want to keep it in some sort of digital format, though – you may need to search quickly through several months of data. My personal choice for PPC account management is Basecamp. It’s a web application for project management. It’s free for one-project accounts (which is enough for most single-client or in-house PPC efforts), and they have reasonable paid plans for managing multiple projects. You can create a new message whenever you complete a PPC task, manage to-do lists of planned changes, and search your changes through their web interface. Even better, you can add multiple users to your account and access the same data online to work better with your team.

For a more passive solution to the problem, Google has a built-in feature that can help you keep track of account changes. Just go to the “Reporting” tab in your AdWords account, and select “Change History.” From here, you can select a date range, campaign, and change type to see a record of every change that has taken place in your AdWords account. This is great for keeping track of what’s been going on in your Google account, but unfortunately this functionality is not yet available for Yahoo or MSN.

Once you have a decent historical record of your account changes, you can easily determine how those changes are affecting your account by matching up your change log with your account statistics within your PPC accounts or your analytics program. When you have this knowledge, you can use it to determine what changes to make (or not to make) in the future.

I’m a big fan of the Google content network. Most PPC marketers tend to avoid it, but with the proper diligence you can get some really great cost per conversion numbers and increase your total conversions. The content network is not for the lazy, though – in order to be successful, you need to know how to block traffic from website placements that drive expensive, non-converting traffic your way.

Fortunately, Google makes it easy to determine performance on the placement level. In fact, they have a special report just for this purpose. To run a content network placement performance report, just follow these steps:

1. Log in to your AdWords account, and go to the “Reporting” tab.
2. Under “Report Type,” choose “Placement Performance.”
3. Under “Settings,” choose the level of detail and the time frame you want to look at. You can choose whether you want to look at each individual web page that shows your ads (URL) or just how well your ads perform on an entire domain (Domain). Since content network traffic is usually pretty sparse, 30 days is probably the bare minimum of time you want to look at in order to get significant data.
4. Under “Advanced Settings,” open up “Add or Remove Columns” and make sure that your check boxes for conversions and cost-per-conversion are checked. These are the most important stats you’ll want to be looking at (as usual).
5. Pick a catchy name, click “Create Report,” and you’re done!

When analyzing this report, pay special attention to your cost metrics. If you see an unacceptably high CPA for a specific URL or domain, you can always add this to your negatives on the campaign level. That way, junk traffic from the site won’t drive up your total costs without providing additional conversions. If you run a placement performance report regularly, you can snuff out a lot of waste in your content network campaigns and start seeing some really great results from your targeted content network traffic.

One of the most important questions to answer in a PPC account is how to increase conversions. To me, this is one of the most misunderstood problems in pay per click marketing. So much focus is given to keywords, text ads, ad groups, and campaigns, but in the end all these factors can do is drive traffic to your site. They really don’t have anything to do with whether or not your potential customer decides to complete a conversions.

In my opinion, the most decisive factor in increasing conversions is the landing page. Sure, you can potentially increase conversions by adding some more keywords or ad groups to drive more traffic. But eventually you’ll hit a wall where there are no more potential keywords or ad groups that describe your product or service. Then, you’ll need to rethink your landing page to make it more effective.

To find out where you might be going wrong, you need to think like a customer. Think about what keywords are directing to what landing pages. If a customer had a question related to those keywords, and they found themselves on the landing page you’ve selected, would they find the answer to their question on that page? They may need to know how much your product is, why it is better than your competitor’s product, or why they even need your product in the first place. Answer their questions! If you can answer these questions better than the next landing page they land on (and they will land on another page, especially in this comparison-shopping friendly economy), then you just might make the sale. By ensuring that more potential customers can find the information they want on your landing page, you probably have a good shot at increasing your pay-per-click conversions.

In case you haven’t been tuned into the news over the past year or so, we’re in something called a “recession.” People just aren’t spending money like they used to, and this is adversely affecting a lot of retailers.

Fortunately for us online folk, a lot of this hurt is happening in the brick-and-mortar space. However, that doesn’t mean that you’re off the hook about optimizing your PPC campaigns to tailor them for the current economic circumstances. Here are three ways to improve your online marketing for better results in a recession:

1. Price Points: It’s no secret that consumers are looking for the most bang for their buck these days. Do some competitive analysis to see what the price point of your product is in your market. Do you have the best prices? Tell your consumers in your ads! Keep in mind that they’re probably shopping around, so a false assertion of “lowest prices” is likely to be found out.
2. Adjectives: Even if you don’t have the best prices, there are still opportunities to cater to your appropriate market. Consider this example: if you sell expensive, luxury watches, you probably don’t want to pay for a lot of traffic from people looking for Swatches or Timex. In your text ads, instead of using the term “Watches for Sale,” try something like “Luxury Watches For Discerning Customers.” Sure, you’re going to lose a lot of traffic by being more specific, but your cost per conversion will look a lot better when you’re driving out unqualified traffic from customers who probably aren’t looking for something in your price range.
3. Free Shipping: These days, free shipping is considered more a right than a privilege. High shipping costs are the #1 reason for shopping cart abandonment. If your shipping costs are too high, it’s probably going to cost you a lot of customers. Instead of having high shipping costs, consider raising your prices a bit and charging less for shipping. That way, customers won’t feel duped once they get to the checkout process. Even better, consider offering free shipping for orders over a certain amount. Every time I order something from Amazon, I try to go over the $25 minimum to get the free shipping. Adding a threshold like this will not only prevent you from losing customers over high shipping costs, but will also push customers to make additional purchases from you, increasing your sales. Also, don’t forget to advertise your free shipping in your text ads!

Got any more ideas for PPC marketing in a recession? Let’s hear them in the comments.