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Is It Time for PPC Maximization?
By Kevin Gold, Managing Partner, Enhanced Concepts, Inc.

Based on surveying research of paid search advertisers, it seems that most have not moved beyond tracking click-through rates into stronger performance indicators

Pay-per-click marketing has rightly established itself in the standard vernacular of Internet marketers and business owners.  A solid majority of small, medium and large businesses understand its potential for generating targeted traffic to their websites.  And the industry statistics do a great job supporting this understanding.  According to an iMedia article in July 2006, SEMPO estimates the value of paid search spending at $8 billion in 2006.  Further eMarketer estimates "paid search ad spending in the US will top the $10 billion mark in only three years, 2009."

But you have to wonder, is all this big spending translating to bottom line results for advertisers?

Based on surveying research of paid search advertisers, it seems that most have not moved beyond tracking click-through rates into stronger performance indicators including conversion and more importantly cost per action (CPA.)  If you're putting a lot of money into paid search yet getting out little to no return - it's time for PPC Maximization.  Or worse, if you can't determine whether you're getting more or less from your paid search investment - it's time to pause the campaign and re-evaluate your approach.

What is PPC Maximization?

Paid search is unique to online advertising.  Because of its inherent functionality, paid search shares many benefits and in some cases expands the benefits of targeted direct mal marketing.  Paid search is effectively measurable (in real-time), conducive to controlled testing, increasingly targeted, and dependent on creative/ad text persuasiveness.

Due to these benefits, paid search is an extremely effective direct response strategy.  Although many paid search engines advertise otherwise, industry research challenges the value of paid search as a branding strategy.

PPC maximization; therefore, is the systematic process of generating a greater return from your paid search investment.  How it is achieved is through leveraging the advantages of paid search to their maximum capacity.

PPC maximization aims to achieve two, overall objectives: (1) to reduce spending costs while (2) generating more actions (however you define your desired action.)  It's a concentrated effort for achieving more from less.

Proven strategies for maximizing paid search include:

1. Setting your objective

Beyond the common sense objective of generating more sales, we need to determine a measurable objective directly associated with our paid search marketing in the context of our customers' buying behavior for our products or services.  Different keyword themes may have different objectives to acknowledge and serve positive experiences to customers at varying levels of their buying process.

Setting an objective enables us to measure performance and to set a financial value on its achievement.  If we set an objective and our paid search marketing fails to achieve it then either it's the wrong objective or paid search marketing is the wrong strategy.

2. Calculate your performance metrics and manage to them

It is said, that "you cannot manage what you do not measure."  In order to maximize or to change course to recover from a declining effort, we must know our reality.  At the highest level this involves understanding the conversion rate of each keyword or keyword theme.  More deeply it involves understanding our cost per action and value of an action at the keyword or keyword theme level.  Knowing these performance metrics enables us to determine effective bid positions, maximum bid prices, required rates of returns, visitor values and keyword performance thresholds.

Today's more sophisticated and less expensive tracking software enables us to easily reach deeper levels of performance measurement.  By removing technology limitations, only a lack of knowledge, desire or resources cause us to not closely track and measure our paid search marketing.  Yet even these barriers are surmountable if we consider outsourcing to a skilled PPC maximization specialist.

3. Utilize landing pages

I have been figuratively "starching my head" for quite some time contemplating why so many businesses don't use strategic landing pages to maximize their paid search marketing.  We have consistently witnessed increased conversion rates of 700% and more using landing pages across B2B and B2C markets.  Simply put - they work!

The principles behind landing page effectiveness are straightforward.  They provide highly relevant, testable, and measurable creative opportunities to connect with the visitors we attract through targeted keywords and ad text placements.  Although design and technical resources are required to effectively execute a landing page initiative, the resulting gains easily and quickly cover the minimum expenditure while filling the financial hole dug by mediocre to poor performing paid search campaigns.

4. Testing, testing and testing some more

The heart of PPC maximization is in a continual process of tracking, measuring and testing.  Paid search marketing is perfectly attuned to testing especially with Google AdWords and [finally] Yahoo Search (maybe MSN AdCenter?) which easily enables us to split-test ad copy.

What to test?  How about everything from keywords, ad copy, and landing page elements?  Unlike most professionals though who push what's "theoretically-right, practically-impossible", I won't assume that you have the resources to constantly test your paid search marketing while managing overall business operations.  For most businesses, paid search marketing is just one channel among many requiring supervision and a continual testing process can absorb a few full-time resources.

However, I must strongly suggest pushing for a committed effort to laser-focused testing on key maximization components including keyword selection, bid positions, high-volume/high performance keyword ad copy and landing page elements like headlines, calls-to-action (offer), images and their arrangement, and call-to-action button text.

If you can't handle these efforts in-house then either outsource to an optimization provider like Optimost or Offermatica (assuming you have a big budget) or outsource to a proven PPC maximization solution provider.  BUT - first understand that not all paid search marketing providers are skilled at PPC maximization!  Reliance on bid management programs and sophisticated software doesn't make one a maximization specialist.  There has to be a balance between skilled human expertises applied to fine-tuned technology systems for maximization to work.

5. Reduce Click Fraud Exposure

Although industry statistics fluctuate on the percentage of spending impact caused by click fraud, we can be certain that is exists and should be monitored.  Although specific strategies for monitoring click fraud are constantly evolving, there is effective and affordable click fraud technology currently available to help. The most effective tools track not only unusual IP traffic patterns but also monitor log files to catch what JavaScript misses.  Monitoring click fraud is a situation (in my opinion) where doing something even at a minimum is better than doing nothing at all.

6. Remain terminally paranoid

What???  Yeah the paranoid survive best in a competitive paid search marketing environment because they never become complacent.  Feeling the competition on their foot heels, the paranoid push harder, test harder and are consistently driven to outperform.

If there is one success factor I continually experience that consistently delivers extraordinary results from paid search marketing it is abandoning a "setup and sit" approach.  Taking a proactive role in managing a paid search campaign generates greater results.   Using the opposite "setup and sit" approach has been the number one reason why most paid search marketing programs fail to produce adequate results.  It is also a major driver among businesses contacting my company in dire straits after depleting monstrous budgets on poor performing paid search marketing!

PPC maximization is where art meets science to produce more from less.  If you're sensing that your paid search marketing should do better or if you can't tell otherwise - then it's time for a PPC maximization initiative.  Don't allow your paid search marketing spend to contribute to the estimated $10 billion market without taking a deserving chunk of tasty return from your efforts.

Kevin Gold is Managing Partner of Enhanced Concepts helping businesses increase their online leads and sales through improving conversions and gaining greater visibility. Download "20 Surefire Ways to Increase Your Website

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