PPC Without Pity

Having campaign budgets in your PPC accounts is a good thing. You can keep your spending in check and ensure that your advertising budget doesn’t go totally haywire. You can even target your spending so that certain products or verticals get a certain percentage of your budget, keeping your ad dollars allotted to the avenues that will make you money. But, since every PPC campaign has different content and goals, there’s no set formula for how to make the right budget. This means that sometimes budgeting can go awry.

I had an incident this week that reminded me of this fact. I added a new ad group to an existing campaign. This is usually a pretty innocuous change, but I didn’t count on how popular this ad group would be. I was pretty excited when I saw that campaign’s conversions double. Unfortunately, so did our CPA. In fact, this ad group drove so much traffic that it affected the overall conversion rate for the entire account.

Another consequence was that this new ad group was so popular that it sucked up all the impression share for the campaign that it was in. Since so many people were searching for the keywords in the ad group and clicking on our ads, we blew through the campaign budget pretty quickly. This meant that the new ad group was getting all of the campaign’s budget dollars and conversions (at a pretty expensive CPA, I might ad), and the rest of the ad groups didn’t even get a chance to show up. Ad groups that were converting at a pretty good rate last month had zero conversions month-to-date because they were being crowded out of ad display by the new ad group. This was leaving potential conversions on the table, which is never a good thing in PPC.

In a situation like this, there’s an easy solution: just separate the problem ad group into its own campaign, and give it it’s own budget to spend. There’s nothing wrong with having multiple ad groups in the same campaign, but if an ad group turns out to me extremely popular, it’s best to isolate it so that it doesn’t soak up budget dollars that could be going elsewhere. The toughest part is figuring out that there’s a problem in the first place. You may never know if a certain ad group is getting a disproportionate share of your budget unless you scrutinize each campaign at the ad group level.

So be careful out there. You might be spending too much money in an ad group at this very moment and you wouldn’t even know about it. This is yet another example of how pay per click marketers must be ever vigilant in our accounts. Follow the money, and make sure certain ad groups aren’t getting too much of it.

With the Yahoo/Bing integration just around the corner, there’s no better time to brush up on your MSN AdCenter optimization skills. In this next installment of Adjusting Campaign Settings Like A Pro, we’re going to walk through the best practices of MSN AdCenter settings.

To access your campaign settings, follow these steps:

1. Log in to your MSN AdCenter account, and navigate to the “Campaigns” tab on the menu bar:

2. Select the campaign that you would like to edit settings for.
3. Next to the campaign name, you’ll see a link that says “Change Settings.” Click it.

Follow these steps, and you’re in!

MSN doesn’t have many options for campaign settings, but there are still some useful tweaks you can make.

Campaign Settings

Here, you can edit the name of the campaign. Pick something that will help you remember the contents of the campaign, and it’s intended purpose (lead generation, e-commerce, etc.). I also like to tag new campaigns with a date code (i.e. 07-04-10) to let me know when the campaign started.

You can also toggle conversion tracking on and off via checkbox. You should always be using conversion tracking in PPC campaigns, so make sure this box is checked. You still have to install conversion code, though – you won’t get any statistics until that task is completed, even if you do check the box in your settings.

Budget Settings

Here, you can set your campaign budget. MSN offers two options, setting budget by month or by day. Setting it by day is good if you need to test out budget points when you’re not yet sure how much traffic you’re going to get. Once you figure out an average daily spend, you can set your budget to monthly.

There are two very important options here as well. You can choose to divide your budget across the month, or spend it until it’s depleted. If you’re on a limited budget, you may want to divide it across the month. This will ensure that your ads get even coverage throughout the month, even if you have a spike in click traffic one day that could potentially eat up your monthly budget. You might lose short-term clicks, but at least you’ll have ad coverage for the entire month. If you’re not so concerned about how much money you spend, then “spend until depleted” is the way to go. This ensures that you get maximum ad coverage, since MSN won’t be worrying about how to ration out your ad impressions to stay within your budget.

Campaign Targeting

In this section, you can change your targeting options for ad display. You can target by location, day of week, time of day, gender/age, and device.

In MSN, you can set your geotargeting settings to target countries, states, metro areas, or cities. Unfortunately, you can’t do custom targets or radii from a specific location. Hopefully they’ll change this after the search partnership goes through, and they can catch up to what Google has been doing for years now.

Time settings can be useful if you know that your target audience is only active at certain hours or on certain days. If you’re targeting business decision makers, 9-5 on Monday through Friday might be a good choice. Think about when your target audience is likely to be online, and then adjust your settings accordingly.

I’ve already explained why web demographics suck before, so I’ll just say use gender and age targeting at your own risk. Device targeting is a lot more straightforward, though. With this option, you can target your ads to computers, smartphones, or both. This is great if you want to make a mobile-targeted campaign, or if you want to eliminate traffic from busy mobile users who aren’t likely to convert on your multi-step widescreen conversion process.

Campaign Exclusions

This is where you put your negative keywords for the campaign, and your negative sites if you’re running a campaign with content network distribution. Look over your search query reports and placement reports carefully for sources of bad traffic. Once you figure out the search queries and/or placements that are costing you money without generating revenue, put them here so that your ads won’t show up on them ever again.

And there you have it. MSN doesn’t have many campaign setting options now, but perhaps we’ll see some interesting changes after the Microsoft/Yahoo search alliance goes through.

Last week, we continued our series on adjusting PPC campaign settings by looking at how to optimize Yahoo Search Marketing campaign settings. This week picks up where we left off:

Campaign Optimization Guidelines

In this section, you can adjust the settings for Campaign Optimization, if you opted in to this function within the “Campaign Budget and Schedule” section. You can tell Yahoo’s campaign optimization to work toward a certain business objective (clicks, impressions, conversions, or revenue), or try to improve your conversion funnel by assigning relative value to events within your funnel (i.e. a page view, shopping cart addition, or a lead form submission). As I mentioned in Part 1, I’m not very keen on using PPC providers’ account optimization functions since they only have the incentive to get you to spend more money on PPC – they could probably care less about your bottom line. But, if you just don’t have time to manage your PPC account and you’d like to automate the process, this may be a good option for you. But beware – if you set your optimization settings incorrectly, you just might amplify mistakes instead of solve them. Algorithms can run amok if you don’t watch them carefully.

Network Distribution

Here, you’ll be able to change your settings for ad targeting. First, you’ll need to decide whether to adjust your settings at the campaign or ad group level in “Set Level” box. For the purposes of this post, we’ll assume you want to keep the settings on the campaign level.

In the “Network Settings” subsection, you can choose whether you want your search network ads to appear in Yahoo Search (searches on Yahoo.com and Yahoo toolbars), Yahoo Partners (sites that use Yahoo for site search), or both. If you’re just starting out, it’s usually best to opt in to both to judge performance. Once your campaign has run for a little while, you can check back at this setting to see a performance breakdown by network. Then, you can make an informed decision on which network(s) to use.

Next, you’ll want to adjust your targeting. If you just want to reach all of the US (or whatever your home country is) at all times, you can just leave the defaults as-is. But, if you want to get fancy, you can adjust your demographic and geographic targeting, and schedule your ads to show at certain times of day and days of the week.

In the “Demographic Bidding” subsection, you can adjust your keyword bids for specific age and gender groups. For example, if your target audience is women ages 30-45, you can set your bids to be 150% of their normal amount for searches from that particular demographic. You can also block your ads from showing to users age 18 and under on this screen.

Now, keep in mind that web demographics aren’t an exact science. Since you can never really know who is behind the computer doing the searching, accuracy is a huge problem with demographic targeting. Yahoo is just making their best guess at the identity of the user based on if they are signed in with their Yahoo profile, or if they self-reported accurate information. Sometimes you’re relying on third-party data of dubious accuracy. Use demographic targeting if you have a very specific audience in mind, but be aware of its limitations.

Geo-targeting is much more reliable, since search engines can reliably read the IP address of the user making the search. Here, you can set it so that your ads only show in a specific country, state, or metro area. This is really useful if you only offer services at a specific brick-and-mortar location, or if you can only service certain parts of the country. You may also want to experiment with geotargeting if you know your best customers come from a certain part of the country, and you’d rather not waste limited budget dollars getting ad coverage somewhere else. You can even increase your bids in certain geographic areas if you find that certain areas have a more competitive PPC landscape than others.

The last campaign setting to look at is ad scheduling. This is where you can shut off ads during certain days of the week (like over the weekend), or limit ad impressions to certain hours of the day. This is really useful if you need to take orders or leads over the phone, and you only want to show your ads when someone is available to take the call. You can also use this to help stretch your budget, limiting ad coverage to your most profitable hours or days of the week. And, if you want to keep a leg up on the competition, you can even adjust your bids to be higher at certain times to ensure you remain in top positions.

That’s it for Yahoo. Join us next week when we continue our campaign setting optimization series. Next up: MSN AdCenter.

This week, we continue our series on optimizing campaign settings with everyone’s favorite #2 PPC network: Yahoo Search Marketing.

To change your settings on an individual Yahoo Search Marketing campaign, select your campaign on either the Dashboard or Campaigns tab after you log in. On the campaign page, click on the “Campaign Settings” link:

On the settings page, you’ll have a few options. To change the settings in each section, just click on the “edit” link on the top right side of each content box. Here’s what you should pay attention to in each section:

Campaign General Information

Here, you can change your campaign name and add a description to help remind you what’s in it. You can also add the campaign to your watch list to keep updated on potential issues with the campaign. There’s nothing to optimize here – just some helpful labels and alerts.

Campaign Budget and Schedule

This is where you set your campaign budget. You can either set it to “no limit” (BAD idea unless you have some really deep pockets…), or assign a dollar amount as your daily maximum spend. You can even allot a specific budget percentage amount toward content match. This could be really helpful if your content network coverage is eating up your daily budget – you can set it so that content can only spend a certain percentage of your daily budget at maximum. To help you decide on a budget, Yahoo even has a tool on this settings page to help you estimate your share of clicks, based on your keyword selections and budget amount.

You can also set a specific end date for your campaign on this page. This is helpful for seasonal campaigns (like back-to-school or Christmas), or if you just want to end your campaign at a specific date and you know you’ll forget to turn it off yourself.

In this section, you also have the choice to opt-in to Campaign Optimization. Personally, I’ve never been a fan of letting a PPC provider automate your account for you. Most optimization is done to optimize traffic instead of conversions (however, Yahoo does allow you the option to choose whether campaign optimization works toward traffic or conversions – more on this in Part 2). This means that the PPC provider has an incentive to increase your clicks (they make more money), but doesn’t have an incentive to make your account have a better ROI (which usually means you will have fewer clicks). Use Campaign Optimization at your own risk. It may be helpful for people who just don’t have time to manage their PPC account. But, with a basic knowledge of PPC (like the great stuff you get from this blog), you can probably outperform Yahoo’s “optimization” algorithm with just a little hard work and creative strategy.

Tactic Settings

Here, you get to make some important choices about your ad distribution. You can choose to turn Sponsored Search (Yahoo search and sites that use Yahoo for site search purposes) and Content Match (sites opted in to Yahoo display and text ads, like blogs and other content partners) off or on. Like in any other account, it’s best to have separate campaigns for search network and content network. The strategies for success are so different in each one that it’s much easier in the long run to divide up the two.

You also need to make a choice about your keyword match types. Unlike Google and MSN, match types are set on the account and campaign level instead of the keyword level. I cannot stress enough how much this sucks. Sure, you can actually set the match type at the keyword level, but the setting gets overridden by what’s on the Account or Campaign level. You’re going to have to commit to one of Yahoo’s two match types:

Advanced – Roughly equivalent to “broad” match in Google and MSN. Shows ads on search queries that are somewhat relevant to the keyword you’re actually bidding on.

Standard – Very close to (but not quite) “exact” match. Shows ads only when a user types in a query that is equal to, or a plural of, a keyword that you are bidding on.

Which keyword you select depends a lot on your available budget and your desired traffic strategy. If you want a lot of traffic and you don’t mind the occasional unqualified click, Advanced match will do. If you’re on a tight budget, and you want absolute control over your keyword list at the expense of a large amount of traffic, try Standard. My personal preference is to use Standard with a very expansive keyword list, but then again I usually like to err on the side of positive ROI over excessive traffic.

If you do opt for Advanced match, you’ll need to pay attention to the next setting: Excluded Keywords. You may know these by their non-crazy-person name in Google and MSN: negative keywords. These work the same way as in every other account. You put them in, and any search query that contains the negative…er…”excluded” keywords won’t show your ads and waste your precious budget. To find appropriate negative keywords, you can ask your Yahoo rep to run a search query report for you (you can’t do this yourself, unfortunately). Also unfortunate is the fact that they can only go back a few weeks for search queries, and they won’t be able to tell you which queries are driving conversions. This leaves you two options: 1) pull some negative keywords from your Google account, or 2) review search queries for Yahoo PPC in Google Analytics or any other analytics package you’re using.

That’s it for this week. Stay tuned next week for Yahoo: Part 2, and the following weeks for our final installment of this campaign settings optimization series, covering MSN AdCenter.

Last week, we started our series on how to most effectively adjust pay per click campaign settings in the major PPC providers by examining how to optimize campaign settings in Google. This post picks up where we left off.

Bidding and Budget

Making a wrong decision here could cost you a lot of money, so be sure you’re paying attention to what you’re doing. First off, you’ll need to choose a bidding option. The default is manual bidding, which is fine for most accounts. You’ll just need to keep adjusting bids yourself, based on performance. Automatic bidding might sound like a good idea, but keep one thing in mind: Google will only maximize your clicks with this setting, not conversions. This opens you up to getting a lot of junk traffic that doesn’t convert. Stay away from this one.

For more advanced users, setting your bids to focus on conversions might be a viable option. This uses Google’s Conversion Optimizer functionality. You set a target CPA, and Google’s algorithms try their best to maximize conversions while staying under your target CPA. In my experience, performance has been hit or miss, but the system tends to improve the longer you leave it active. It might be an interesting experiment to try Conversion Optimizer bidding for a month or so with an established campaign for a month or so, but if you don’t see good results in about 30 days you should probably just stick with manual bidding.

You’ll need to choose your budget wisely. Here’s how I do it: take the amount of money you’re willing to spend per month, and divide it by 30. That’s your daily budget. You might go a little over on months with 31 days, but it should only be a small percentage of your total advertising budget. It’s possible to err either too high or low on this, so be careful. If you set your budget too high, you could overspend if your search terms are more popular than you anticipated. If you set your budget too low, you won’t get much ad impression share, and you’ll lose out on impressions, clicks, and conversions. Make a conservative estimate of what your budget should be, and if you top out at this amount every day, you should think about either scaling your keyword selection back or raising the budget.

You have two more options in this section: Position Preference and Delivery Method. You should almost always leave Position Preference off. It may seem like a good idea to target certain positions, but keep in mind that your ads will never show in any other position. This could be disastrous unless your keyword bids are dead-on accurate and consistent. For Delivery Method, it’s usually best to keep it on Standard so that your ads show evenly throughout the day. Setting it to Accelerated usually leads to your account blowing all its budget early in the day, leaving no coverage for the afternoon and evening. If your budget is high enough where you’re not depleting it every day, accelerated ad serving probably won’t affect you. But, I usually leave it set to Standard as a best practice.

Ad Extensions

These can be really useful for businesses who want a little something extra in their text ads. There are three types:

1. Locations: If you’re a local advertiser, it’s a great idea to put a map and address in your ad. Google makes this easy by allowing you to import your addresses from a Google Places (formerly Google Business Center) account. If you don’t want to go through the hassle of setting up a Places account, you can just add your address manually in this setting.
2. Products: If you’re into e-commerce, you can use this extension to import images and information from your Google Merchant Center account.
3. Phone extensions: If you tend to get a lot of conversions offline (or you want to), adding a phone number to your ad might help you appeal to users who don’t like completing transactions on a website, or just want to talk to a real person. Even better, your numbers become click-to-call on mobile devices with full internet browsers.

Advanced Settings

You can’t change your start date, but you can adjust your end date if you like. By default, it’s set so far into the future that you’ll probably never have to worry about it. But, if you have a highly seasonal campaign, you may want to determine an earlier end date so you don’t have to remind yourself to shut it off.

Ad Scheduling is really handy if you’re on a limited budget and want to target your ads to your most profitable hours of the day. If you deal exclusively with B2B customers, you can schedule your ads to only show during work hours, and cease showing during the weekend.

Ad rotation is a tricky subject that I’ve touched on before – you’re probably better off reading my older post to get the full story.

Frequency capping can be handy if you use content network campaigns (it only affects content network distribution). This limits how many times an individual user can see your ad. It could be useful for power users of the content network, but for most folks it’s okay to leave no cap on impressions.

Demographic bidding is another content-network-only feature. It lets you adjust your bids for specific genders, ages, and other user demographics. I’m still not sold on the reliability of web advertising demographics. Most of this information is self-reported or pulled from third-party sources, so I doubt it could be that accurate. Use this at your own risk.

Now, you should be all set to change your Google AdWords campaign settings like a pro. Next week, we’ll take a look at Yahoo.

Previously: Adjusting Campaign Settings Like A Pro: Google (part 1)

Whenever I take on a new pay per click account, or examine an existing one for problems, the first thing I look at is the campaign settings. These settings can have a drastic effect on campaign performance, but many PPC users don’t know what each setting does, or how they should choose their options. I’m proud to introduce a new, multi-part blog series to help you decide what to do with those campaign settings for optimal PPC performance. We’ll cover the big three PPC providers: Google AdWords, Yahoo Search Marketing, and MSN AdCenter. This week, we’ll start with the most popular ad network: Google.

Finding Your Campaign Settings

Like many PPC managers, I like to do most of my Google AdWords work in Google’s desktop tool, AdWords Editor. However, this program doesn’t provide all the options for adjusting campaign settings, so it’s best to adjust them in the web interface. Log in to your AdWords account, and go to the “Campaigns” tab.

To get a general overview of your campaign settings, you can go straight to the “Settings” tab (make sure your view is “All Online Campaigns”):

From here, you can get a quick overview each campaigns settings, including location targeting, language, networks, device targeting, bid type, budget, end date, ad scheduling, delivery method, and ad rotation. If you don’t see all these options right away, you can adjust your visible columns by clicking on the “Columns” link below the “Settings” tab:

If you’re in a hurry, or if you have a big account, this is a great way to get a quick overview of your campaign settings. You can use this to diagnose any mistakes, such as any campaigns accidentally set to run on both the search and content network, or in the wrong location or language. But, if you want to take a look at each individual campaign’s settings in detail, you’ll need to select the campaign from the list on the left side of your screen, and then select the “Settings” tab in the main frame.

Now, let’s talk about how to adjust each option in the settings.

Campaign Name

This is pretty straightforward. Name it what you like, but my personal preferences are to label it with the general product or goal of the campaign (i.e. “Auto Sales” or “Branding Campaign”), along with a tag indicating the day the campaign was first activated (i.e. “Auto Sales 06-06-10″). This way, you’ll know exactly what the campaign is all about, and how long it has been running without having to look back on your account history or personal notes.

Locations and Languages

For most campaigns, you’ll just want to target your home country and the predominant language. But, Google has some highly effective geotargeting capabilities that you’ll want to take advantage of. There’s so much detail to talk about this that I won’t do it in this post, but definitely look into geotargeting if your business’ customer base is in a highly localized area (like if you advertise for a restaurant or school), or if you want to target specific geographic areas with customized landing pages.

The languages option is often overlooked (at least here in the States). Not every country speaks a single, uniform language, though. It may seem like a good idea to start a Canadian campaign set to English, but don’t forget that the province of Quebec predominantly speaks French. You might want to target English to all other provinces except Quebec, and create a special French campaign just for Quebec. Do your cultural homework, and you just might pick up a few conversions your competitors will miss. But, be wary if you’re going to target a non-English speaking country – you might spend all your time translating keywords and text ads, but forget that your campaign setting is still set to English! A simple mistake like this could cost you a lot of traffic.

Networks and Devices

In my opinion, the Networks option is the most important one to check. Google’s default settings for every new campaign is to put it on both the search and content network, which is usually a bad thing. There are very different strategies for success on each network, so make sure each campaign is either search-only or content-only.

You can also opt in or out of the Search Partner network – these are sites that utilize Google search on their pages, and show AdWords ads whenever a user does a site search. Performance can vary between Google search and the Search Partners, but it’s usually not enough of a difference to shut off the search partners entirely. Your best bet is to leave Search Partners active, but be sure to monitor the performance of this network to make sure you’re getting your money’s worth.

On the “Devices” option, you can choose whether you want your ads to show on computers, mobile devices, or both. Recently, Google opened up further mobile targeting options, letting you select specific mobile devices and carriers. This will probably start to impact PPC in the near future, but most campaigns won’t need to target at this level of granularity. However, if you sell a product that is highly relevant to mobile phone users, you may want to test out a campaign targeted specifically to mobile devices, and omit all traffic from desktop and laptop computers. Just be sure that your landing page is optimized for mobile device screen sizes.

That’s it for this week. Stay tuned next week for Google: part 2, and the following weeks for Yahoo and MSN.

There’s an old saying carpenters rely on: “measure twice, cut once.” It means that if you’re going to make a permanent change like cutting a piece of wood, you should double-check your measurements to see if they are accurate. Otherwise, you might have to end up cutting your plank again (assuming you didn’t cut it too short in the first place). It’s sound advice for craftsmen, but I think it’s a helpful maxim for us pay per click marketers as well.

Whenever you are about to make a major change in a PPC account, you need to be absolutely sure that you are considering all of the factors that are affecting that particular aspect of the account. Use reports, analytics data, and your own best judgment before you flip the switch on a potentially game-changing alteration. Remember, they call it “pay per click” for a reason. Even a small mistake could cost you hundreds or even thousands of dollars down the road.

Fortunately for us, pay per click marketing is all about measurement. While a carpenter may only have a tape measure in his toolbox, we have a whole arsenal of tools to help gauge success and prevent costly mistakes. Don’t ever assume that you know everything there is to know about your account – double check your numbers, and if you’re making a big change, get a PPC buddy to look at your new account, campaign, or ad group if you can. It’s a lot easier to prevent yourself from making mistake than struggling to fix it after the fact.

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.