Do you spend so much time obsessing over bids in Google and Overture that you lose the big picture?
The pay-per-click (PPC) auction marketplaces can get exciting, like eBay, gambling and video games. Some say bid monitoring is like watching a sport or, more accurately, playing one. But business success is the primary goal, not playing bid chicken with the competition through bid jams and gap surfing.
You want to get the most out of your search engine marketing (SEM) budget and campaign, but microlevel bid management can be distracting. Look closer at the macrolevel success of a campaign, and you may find yourself in a real pickle. You may hit a volume wall where order/lead volume is maxed given return on investment (ROI) objectives.
Recently, I heard from some marketers who feel they’ve hit a “search volume wall.” They can’t seem to get more sales or lead volume from search and still meet ROI or profit objectives. If that sounds familiar, you need to implement strategies that can break though the wall, delivering more volume and higher profits.
I’m not saying you simply raise bids to gain additional volume, particularly if raising those bids results in a unprofitable bid price, even if those losses are hidden in a portfolio. The best paid-placement search campaigns meet ROI, revenue, and profit goals. Most serious marketers manage their search around specific success objectives, not position. Position is a means to an end. The end goal is business success.
As little as a year ago, bid prices were lower and it was easier to get high volume while maintaining high ROI. Things have changed. Your competition wants the same clicks from the same keywords you do. Though the total number of search advertisers is more than 150,000 and still growing, the real problem is how many competitors you have. You can’t hide from your competitors; you have to outsmart them with superior strategies and flawless execution:
- Profit maximization. Reevaluate your ROI objective based on profit maximization. Regardless of which ROI metric you use — cost-per-order (CPO), return-on-ad-spend (ROAS), or cost-per-action (CPA) — determine if the target is in the right zone. Compare ROI and customer acquisition cost to other online and offline marketing activities. If your search target is lower than your target for direct mail, telemarketing, or banner campaigns, consider shifting budget into search.
In addition, consider the sales/lead volume compared to ROI. Sometimes you can earn more total profit by taking a lower profit per sale at a much higher sales volume. This is called profit maximization elasticity testing. For example, on an important, high-traffic keyword, you think you can only afford position six because you want to make $50 per order (after search click media costs are subtracted). Higher positions are more expensive. But you only get five orders a day at position six. You get 30 at position two and a lower profit per item of $42. Your total profit is higher, even though profit per sale is slightly lower.
- Keyword expansion. I keep coming back to this one. True, most traffic is on the one- and two-word phrases. But the longer phrases are really important, particularly if they also contain a brand term. Also look at conversion enhancement that may enable you to afford top positions for more power keywords.
- Listing creative optimization. Look at your best-performing keyword listings, those with good volume and good ROI and at positions you can afford. What if you could double the number of clicks you get on these listings? In Google, increased CTR (define) pays handsome additional dividends, delivering a higher position at no additional CPC (define) cost. You can often get dramatic increases in CTR versus impression by doing one or more of the following:
- Use the keyword in the title and description.
- Compel relevant targeted language that entices the searcher to learn more.
- Use promotional copy that includes something special (price, free shipping, large selection, etc.).
- Consider testing power keywords in copy, such as “great,” “save,” “shop,” “xx%,” “huge,” “latest,” “excellent,” “wide selection,” “low,” “discount,” “choose,” “now,” and “wholesale.” These keyword additions don’t work for everyone, so test, test, test.
- Landing page testing and optimization. After the ad listing, the next thing customers see is the landing page. Is the landing page clearly the best and most appropriate, based on the customers’ keywords? Is the offer clear? Do you have the right amount of copy? Too much navigation? All these things, as well as design, layout, color, price, and page headline can greatly affect the next steps potential customers take.
Use landing page testing techniques to do Darwinian testing (best page wins) for high-volume keywords in particular. When the conversion rate increases, you can afford a higher position and still have a better ROI than when you started.
- Conversion optimization (beyond the landing page). Make sure your site doesn’t lose customers before they take the actions you want (lead forms, order forms, downloads, etc.). Use Web analytics to watch user behavior and learn what changes might improve conversion.
- Offline conversion and brand lift. Recent studies show that for nearly every business, some customers choose to interact with that business offline. That interaction could be a store or toll-free number. Similarly, paid listings and interaction with Web sites have shown to deliver branding impact. If your company has branding goals as well as immediate ROI goals, include a factor in your campaign that takes branding into account, along with offline conversion value.
These techniques, and a few others that factor in seasonality, days of the week, or times of the day, can help you break through the wall holding your campaign back. But don’t stop with testing these techniques and strategies just once. Keep reapplying these ideas, strategies, and tactics. Every efficiency improvement, from the right bids and keywords to the best creative, landing pages, and offers, translates into profits. Keep the competition guessing why you succeed and how you can afford keywords they can’t.
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