9 Tips for Super Charging Pay-Per-Click AdvertisingGuest_Blogger | Mar 12, 2008
Pay-per-click advertising is an established and rapidly growing marketing channel that is a valuable source of sales and leads for small and large companies alike.
These tips provide advertisers with the capability to quickly and easily focus on the highest priorities, build on successes, and most efficiently and effectively assess their pay-per-click advertising performance regardless of how much money they invest each month.
1. Know the dollar amount or percentage of the advertising spend that actually generates results.
Logic361 has found that most ad spend productivity ranges from 45% to 65%. We recommend calculating the value of the appropriate conversion metric (cost-per-conversion, spend-to-value or ROI) separately without the cost of advertising that produces no value. This type of analysis produces a conversion goal that a retailer’s advertising spend should be trying to achieve. Many retailers take this analysis one step further and pull out branded keywords expense and conversions.
2. Look at the branded keywords in your pay-per-click campaigns.
If competitors aren’t targeting them why spend the money? Logic361’s clients typically spend 7% to 12% of their advertising on their branded keywords. Several of our clients are considering whether they should be paying their agency to manage these “gimme keywords” and/or if there goals and objectives should be reported on separately. The percentage of conversions coming from branded terms can be as high as 30%.
3. Know the amount of advertising expense rolling over each month that is not generating results and rebalance spending.
Identify keywords and/or ads that are money losers and assess their ability to become productive with a lower bid, a new ad or a better landing page. If they don’t have a reasonable chance of success in a short period of time; cut them. Also, look at least 6 months back for keywords that are bouncing along slowing accumulating $5 to $10 a month in expense. These keywords can go un-detected due to monthly or quarterly reporting that isn’t identifying the cumulative cost.
4. Evaluate your ad group organization based on the performance of keyword concentrations.
The fewer the keywords in an ad group the better the keyword group should be performing due to the relationship of keywords to ads. Well organized ad groups show graduated improvements in conversion as the average number of keywords in an ad group become fewer.
5. Review the number of ads in each ad group.
Ad groups should be running 2 ads and only 2 ads at all times unless a 3rd party multivariate statistical analysis optimization service is being used. Google AdWords accounts should also be set to “rotate” not “optimize.”
Why? Optimized ad serving favors ads with higher historic click-through-rates (CTRs) and quality scores. These favored ads enter the ad auction more often than other ads within the ad group. Rotated ad serving delivers ads more evenly and will not favor ads with higher CTR’s. All ads within the ad group will enter the auction an equal number of times-making performances comparable. Poor organization of ad inventory can severely constrain potential performance and needlessly incurs expense.
6. Build on ads that work by implementing and monitoring reporting that distinguishes Champion Ads from Challenger Ads.
A systematic review of ad aging quickly distinguishes winners from losers and insures that marketing expenditures are maximized. Incremental improvements in ad performance across every ad group can significantly increase overall performance.
Why? The replacement and subtle modification of ads over time will increase click-through-rates, reduce average costs-per-click and substantially increase profits.
7. Evaluate your ad group organization based on the performance of click rate concentrations.
The higher the click rate the better the ad groups should be performing due to keywords and ads generating interest and response. Optimized ad groups show graduated improvements in conversion as the average click rate increases.
8. Examine keyword inventory word count concentrations based on performance.
Shoppers don’t typically enter one word to perform their product research, find what they are looking for, purchase it and quit. Most shoppers enter a series of keywords, product names or perform multiple searches to find the product, service or information they are seeking. Well organized and optimized keyword inventories show graduated improvements in conversion as the number of words in the keyword count increase.
9. Examine the concentrations of keyword conversions 20% above and 20% below your organizations targeted performance metric (cost-per-conversion, spend-to-value, ROI). Keyword conversions that are above target are an indication of over-bidding. Keyword conversions that are target may be an indication of under-bidding and lost opportunities.
Stephen Schramke is the Co-Founder and CEO of Logic361, a Seattle company whose software automates the analysis and reporting of search engine text ad advertising.