The nuts and bolts of a highly-tuned publisher keyword campaign requires technology to track the positive outcomes deriving from every keyword-driven media click. The campaign's objective is to maximize the holistic profit generated from the keyword traffic buy.
The positive outcomes can be derived from factors outlined in Part 1, but include maximizing page views per visit, as well as conversions to other profit-generating behaviors. Many publishers haven't assigned values to a new newsletter subscription, but they generally know the value of a paid online or offline subscription.
Running a keyword campaign holistically may require that different departments at the publisher pool resources as well as metrics. Failure to consolidate metrics will result in a subpar campaign.
Yield managers seeking to drive online page views in specific site categories must collaborate with the offline circulation manager as well as the customer-acquisition manager seeking to build site registrations. Once the success metrics can be folded into a single formula, every page of the site must be pixeled if third-party systems and technologies are to be used.
The campaign manager's goal is to isolate all the elements of a particular click that make it profitable and buy more clicks with similar profiles. Running the campaign based purely on averages is much more straightforward, but given that keyword inventory is auctioned in real-time and that APIs (define) exist to allow for niche selection of traffic sources, it would be folly not to buy the best identifiable traffic.
If we were to look at the advertising arbitrage aspect of this holistic ad buy (ignoring for the moment the additional profit-generating behaviors of a visitor), the break-even -- and therefore the campaign's profit -- will depend on three factors: publisher revenue per thousand pageviews (RPM); the price at which inventory is available on a CPC (define) basis, and the click's stickiness.
For example, if the publisher site is earning an RPM of $40 within a particular section of the site on which additional inventory could be sold, we can solve for the number of page views per visitor that need to be achieved to reach break-even at a given CPC (of inbound clicks). Alternatively, we could calculate the break-even CPC given a page view-per-visit metric.
In an auction-bidding environment, not much inventory may be available at 10 cents, which is the break-even in this calculation. Plus, you obviously want to incorporate some profit.
The solution may initially seem to focus on keywords with lower bid prices and higher page views per visit. Clearly, if the number of page views per visit is higher among certain keywords from certain engines, your ability to earn money directly from your campaign is higher.
I urge you to use technology to go far beyond this level of simplistic campaign optimization. What other factors predict a high page view per visit? Tying back each user session generating page views to each inbound click will build a more complex and powerful model to re-allocate spending where it does the most good. Run an analysis to determine if the predicted number of page views per visit varies by any of the following factors:
The same methodology to get the ad-driven profitability out of a keyword campaign should be expanded to include other success metrics once the value of these behaviors has been established. For example, if a free newsletter subscription is deemed to be worth $3 and the conversion rate of one segment of traffic is 0.5 percent, then the value of that click can be calculated at one and a half cents.
In this case, one could clearly not run a campaign exclusively based on newsletter subscriptions, but adding the penny to a bid could result in a higher position or greater rotation in a contextual campaign. Similarly, any conversions to more valuable offline paid subscriptions, even if highly infrequent, might add an incremental penny or two to the allowable CPC.
If you have an interest in a spreadsheet illustrating a model such as the one described above, I'd be willing to share a simplified version with you; just contact me.
Over the next year, I expect more old-school publishers to take advantage of their prestigious positions as brand advertising magnets and use online keyword marketplaces to build traffic and revenue. Doing so will require breaking down internal fiefdoms and adopting a holistic budget strategy, but those publishers heeding my words will prosper, whereas others will find themselves losing share of spend to more savvy publishers able to both establish themselves as magnets for brand dollars and demonstrate the acumen to take advantage of the huge disparity in CPMs between contextually-utilized remnant inventory and the premium ad space.
Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.
Know your Ambiguous Customer: Effective Multi-Channel Tracking
Wednesday, June 5 at 1pm ET - Learn why a move from the "batch and blast" email approach enables better conversations with your customers.
Register today - don't miss this free webinar!
Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.
Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.
June 5, 2013
1:00pm ET / 10:00am PT
June 20, 2013
1:00pm ET / 10:00am PT