Paying By Credit Card: Most people try to get on an invoicing plan with the search engines whenever they can, but I try to stick to credit cards as often as possible.  Why?  Because the credit cards I use pay me in points, and those points can be used for all sorts of other work expenses.  If you’re budgets are big enough those points could even pay for some or all of your corporate travel!

Bing Cashback: Bing literally pays people to search by using cash back incentives when the people buy from a PPC ad.  This works by the advertiser giving a discount on a product, and Bing using that discount to entice people to save money when they’re looking to purchase items you carry.  The best part for advertisers is a percentage of your PPC spending from Bing gets deposited into a cashback account that you can use for those discounts.  So sign up, and encourage people to save.

Fraud Credits: Click fraud is inevitable, and most engines will give you a monthly credit back for some click fraud.  Most of the time they see it up front and don’t even charge you for it.  However, it does happen, and when it slips through the cracks you can file a claim to get some money back.  This post about click fraud shows you how.

Have your own ideas?  Share them in the comments, and help others put their money to work!

There is a reason why Billy Mays always told you to call now.  There is a reason why credit card offers tell you to apply online or call to speak to a representative.  These calls to action are best practices, and they hold true with paid search ads that you see on Google, Yahoo and Bing.

It shouldn’t surprise me when search engines use their own direct marketing to achieve goals, but it did surprise me when I opened an envelope that was sent from Google only to see it was an ad for enterprise level Google Apps.  It contained a letter explaining the benefits of using Google Apps, and a calculator to show how much you could save a year by switching to Google Apps, based on the number of employees you have.  The approach was intriguing, but in all honesty my initial reaction was “What?!  Google is sending junk mail?!”  Why would a company that makes billions by building a system that allows for ultra-targeting suddenly go to broadcast junk mail from segmented lists?

I’m not questioning the marketing prowess of the Google Apps team, in fact I think they probably have excellent reasons for pursuing this tactic.  However, I suspect this is an internal beta to see if Google can successfully mine their database of hundreds of millions of people to develop targeted lists for more generalized forms of marketing to feature in AdWords.  Consider for a moment the information that Google knows about its users on a query-by-query basis:

• Search History: Google knows what you search for in the past and can combine that history to make assumptions about your hobbies, interests, likes, dislikes, and other personal detail.
• Physical Location: Google knows your physical location by city and/or state based on your IP address (unless you use AOL, who masks everyone behind a single IP address).  If you use a Google Lattitude, then Google knows exactly where you are within a couple feet.
• Previous Sales History: If you use Google Wallet and Checkout, then Google knows what you buy and where you buy it from.  It also means Google has your credit card number on file, which also means Google has your billing/shipping address.  Even if you don’t use Google wallet/checkout, but you do use Gmail, then perhaps your emailed receipts will find their way into your profile with this same information.

The list goes on and on of what Google knows about you when you use their services, but the point is Google can use the information it knows about its users to build some highly targeted and segmented lists that would be of significant benefit to direct mail marketers.  It is not too much of an intellectual leap to assume that Google can build a tool in AdWords that advertisers can use that enlists the help of Google Apps and other services to make direct mail creative, and then pay Google to print and ship the direct mail to your chosen segment of recipients, and then use Google Analytics to track the performance of the campaigns.  To test this theory, I went to the featured URL and looked at the address bar to see if any Google Analytics tracking was added.  Sure enough, the URL auto-filled Google Analytics tracking that looks like this:

utm_medium=dm&utm_source=en-dm-na-us-tco_adw_q110&utm_campaign=us-tco

Let’s break this down piece-by-piece:

• UTM is Urchin Tracking, aka Google Analytics.
• Medium usually refers to the marketing medium, whether it be PPC, display ads, YouTube rollovers, etc.  The fact that it equals “DM” (utm_medium=dm) should be easy enough to assume that DM stands for Direct Mail.
• The Source information includes “EN”, which for Google usually means the language abbreviation for English.  NA-US probably refers to a North American campaign focused on the United States. As for “adw-q110″, there is no way to be certain, but my assumption is that is internal speak for which list my name came from.
• The campaign is what the Google Analytics user is calling the individual marketing campaign.  For example, if Best Buy was having a sale and had 30 display ads all featuring the sale, then those 30 ads would probably have the same campaign tags to monitor performance of the sale.

So let’s assume Google is testing a direct mail campaign that uses their knowledge of people to build mailing lists.  How would this be done?  How would names and addresses be segmented, categorized, and broken down in a way that adds value to marketers?  After all, Google has always targeted people by search query mapped back to bidded keywords in an auction system, which is a lot different than segmentation analysis.  So how could they include demographic segments and teach advertisers how to select them?  Simple! They would use Facebook as a benchmark.

If you have ever played with a Facebook ad, you know you can target people by gender, age, relationship status, page affiliations, etc.  Imagine an Adwords system that does something similar.  Google could even add its own twist to the process by requiring advertisers to bid on how much they’re willing to pay on a conversion basis to use the various portions of the list.  The more relevant your list is to your target audience, the more you’re willing to pay to speak to those potential customers.  The process may look something like this:

1. The advertiser logs into Adwords and creates a new campaign called Direct Mail.
2. The campaign wizard walks the advertiser through targeting mail recipients based on any demographic information known by Google, possibly including sites visited (i.e. news/blog junkie would go to Huffington Post and/or NYTimes.com, while tech enthusiasts would be on TechCrunch, C|Net, and others)
3. The advertiser uploads any graphics or other creative that pertain to the advertiser’s business, and determines their cost per conversion.
4. The advertiser is then shown several templates from Google Docs, and the advertiser picks the ideal layout
5. AdWords shows several top-performing PPC ads based on click rates.  The advertiser writes additional copy based on best performing PPC ads
6. Google offers a specialized landing page created by Google’s Page Optimizer for interested parties to visit, and the advertiser customizes it to fit with the rest of her site
7. Campaign data is uploaded into Google Analytics
8. The advertiser sets postage delivery times and establishes her CPA bid against other advertisers wanting to target a similar audience
9. Google’s systems automatically call up names and addresses based on the advertiser’s chosen segments, prints and labels the mail, and delivers to the post office for delivery.

Since the advertiser is only choosing list segments, Google will never actually share the names and addresses of its users with the advertisers, ensuring the privacy barrier is never broken.  Performance is tracked via Google Analytics, and assuming the recipient converts into a customer, the name/billing information is absorbed into normal sales activity of the advertiser, making it impossible to know which purchasers reacted to the direct mail campaign via Google.

Now I could be making a big deal out of nothing.  After all, this thought process stemmed all from me receiving a single letter in the mail from Google promoting a single product.  However, I highly doubt it will be my last.

The point of this article is not to scare you about what Google knows about you or other users.  They recognize that people take privacy very seriously, and even created their privacy dashboard.  If you’re more interested in the 3rd party review of Google information, SEOMoz has a great resource that walks you through everything that Google can capture about a user, and how it does so.

In the campaign settings you need to turn on the option of allowing SiteLinks.  A little drop down box will appear that allows you to enter text and destination URLs for several text links. Once active, any keyword that qualifies for top positioning on a regular basis will begin displaying the SiteLinks.  A click on any of the links is charged the same CPC as without the SiteLinks.  From initial testing I have found the CTR to be upwards to 20% higher than the same ad without SiteLinks, so it definitely grabs people’s attention.  The higher CTR typically will help your quality score, and assuming you can continue to keep that top position, your average CPC will actually go down.

The links can be changed anytime, but can only be assigned at the campaign level.  If there are ads that you specifically don’t want SiteLinks included on, then you must duplicate the campaign and have a version running with and without them active.  The ads that you do not wish to have SiteLinks enabled must live in the campaign where the feature has not been activated.

PPCHero suggests using links for seasonal products or a direct link to a contact page.  These are great ideas, but there are plenty of more options.  If you have a complicated conversion structure similar to a travel site, then consider adding links to various parts of your conversion funnel to see what can work when the initial pages are bypassed.

This is still in beta, so you may not have access to it quite yet.  If you really want to try it, call the Google customer service line and ask if you can be included.  Sometimes it works, sometimes it doesn’t, but either way it gives you a chance to try out a great feature that you may not have otherwise known about.

So how does one take advantage of this new realm of real-time search?  Simple, engage in real-time advertising with current content updates on your site.  If you want to blog on a popular topic, or a topic you know will soon become very popular (perhaps a professional golfer’s recent PR disaster), then you can create the campaign in Google/Yahoo before you even write your content.  Here’s how to do it:

• Start a draft of the blog post or page so you have a known URL, or use a URL you know you will be establishing as your URL for the content.  This will be your destination URL for ads.
• Select the main keywords that surround your topic and write a quick ad saying the latest news and information can be found on your site, and then set the campaign status to pause.  Be sure to make the default URL the home page of your site.
• Finalize your content and publish
• Change your destination URL to your content’s page and set your campaign to active. The traffic will start flowing in as little as 15 minutes.

You may be wondering why bother setting up the campaign before writing the content instead of the other way around.  The answer is two words: Editorial Review.  The campaign doesn’t need to be active to trigger an editorial review, so the time it takes you to write and finalize your content should be enough time for your new campaign to get past any editorial checks by the search engines.  The editorial review does need a live and active page, which is why we set the ad to the home page and then change it later.  This means as soon as you’re ready to buy traffic, the engines are ready to sell it to you without any holdups.

The experienced search marketer may say that the URL change will kick off another editorial review, which is correct.  However, that review will be done as the campaign is live, and will only be shut down if the ad doesn’t link to a functioning page.

Another method of engaging in real-time PPC is to buy and pause keywords that you expect you may need later.  The New York Times does this with the published names of Hurricanes for the following season, so if that hurricane becomes a news maker, they can drive traffic to the article instantly.

The advantage is you can get a leg-up on your competition who may need to wait until their updated pages get indexed.  You may have to wait for that too, but incorporating these tactics will allow you to catch some of the initial swell of traffic that always occurs when a story breaks.

best practices with shopping enginges

OK.  We’re past Thanksgiving, Black Friday, and Cyber Monday.  I told you what to expect during the holidays with PPC accounts, and now we’re talking shopping channels.  These are where some people go when they know exactly what they want and they’re looking for one thing, and one thing only: Bargains.  There are dozens of shopping engines out there ranging from Shopzilla, Nextag, Become, ShopWiki, and Shopping.com to name a few.  Just as in regular PPC, there are best practices to ensure an optimum return–or a minimum loss.

Shopping channels are similar to typical PPC because it’s an auction-based system.  It’s different in the fact that you bid and compete on categories instead of keywords. The bids are often in $0.10 increments and positioning is often based purely on bids.  If you’re familiar with paid search on a moderate level, and you are aware of the differences mentioned, then you’ll be on fairly similar turf.  So here are some best practices to make the best of your shopping feed experiences.

Make Sure Feeds Are Updated: There is no faster way to turn someone off of your site via shopping channels than have one price show up on the search results, and then a separate price show up on the product page.  Update your feeds as often as you update your pricing.

Watch Bids Daily: Bidding on shopping channels is almost a pure position play.  If you’re not careful you’ll quickly find your item at the very top of results, or completely off the first page.

Pick Your Battles:  Many competitors will offer stripped down and refurbished models in order to show a lower price.  Compare your product offering to your competitors.  If there is a difference in the package, and you can’t explain it in the description, and you can’t compete with a similar price, don’t bid on the item! Beyond the description you will not have the opportunity to explain the difference in features and benefits on why your offering is superior, so don’t even try.

Watch Out For Popular Items: If one of your items gets a high click-through rate, pull it.  Surprised?  Don’t be.  Shopping sites have a very large network of affiliates and sub-sites, that will all be more than happy to take your successful product and showcase it on your site.  This may sound good at first, but these network sites have no interest in sending you quality traffic, and are promoting your popular product only to get a paid click at your expense.

If after considering these tips you feel you’re ready to dive in to shopping channels, go for it!  But keep an eye on your budgets, and don’t be afraid to pull out of a category if it’s not profitable.

Best Holiday Movie EVER

‘Tis the season to be selling.  So many sites make a large percentage of their income during these last 6 weeks of the year.  For some, it’s even make-or-break–especially with the year we’ve had.  For those of you who spend your day running a business instead of PPC accounts, here is a brief rundown of what you can expect to see in your PPC accounts when you do have time to check them:

More competition:  This is probably the most obvious, but you need to consider what more competition means.

• Higher costs per click
• Lower click-through rates
• Budgets that dry up before you realize it

This year I have seen a huge drop in click prices almost across the board.  I suspect that people that not only did they get smarter with what keywords they were bidding on, but that they lowered their monthly budgets to build up their year-end war chest.  If this is correct, then it means you can expect much fiercer competition at levels that seem outright ridiculous.  Click costs can rise 2-3x within days, and if you don’t respond in kind your traffic will disappear as your ads are relegated to page 3 of results.  But don’t forget to raise daily budgets, otherwise your money will be spent much faster due to the more expensive clicks eating up that money.

Keep an eye on daily budgets and Impression Share:  In Google you can run an account report and view impression share as a selectable metric.  Right now I want you to login into your account and run this report broken down by months for the entire year.  Look at your average impression share.  Review this information daily during your busy season to make sure this number doesn’t drop off .  If you see it declining, consider raising your daily budgets.

TIP: If your campaign settings are set to accelerated spend, meaning Google will serve your ads as often as possible until your budget is depleted, then you can run an hourly impression report to see what time of day your ads typically go offline.  By doing some simple math you can determine how underfunded your accounts are to achieve an 80-90% impression share (you’ll never achieve 100%).  If you can afford to increase your budgets to to achieve the higher impression rate and get more traffic, then you should see a spike in your conversions (assuming your conversion rate stays constant)

Watch out for competitors bidding on your Trademarked terms: Competitors will try to steal your branded traffic.   Some will bid on your name, and others will even include your name in their ads.  If you have a registered trademark, and you see a competitor using your name or the keyword insert function on your TM as a bidded term, you can file a complaint to Google and they will shut down the ad.  In Yahoo you can have competitors banned from advertising on that term all together.  In both cases you will need your trademark registration number for the engines to even talk to you about this complaint.

Lower Conversion Rates, Followed by Higher Conversion Rates:  If you’re a retailer, this will drive you mad for the first week or two of the holiday season.  Consumers will spend a lot of time shopping across various sites getting gift ideas and looking for the best deals.  This means that conversion rates typically drop.  However, two weeks into the season you’ll start seeing the conversion rate jump.  Once this happens be ready to boost your campaign budgets to capture as much of that traffic as you can.

Huge Traffic Spikes from Shopping Engines:  If you’re not on Google Base, Shopzilla, Nextag, Become.com, and many of the other shopping sites yet, open accounts now.  Google base is free, and if you ask nicely you may get your Google Base and AdWords account linked, so some product images will show up in your ads.  It’s a limited beta that may be closed, but if you can get in the click-through rates will be phenomenal.

Lastly, keep an eye on the content network.  If you are running any ads on any of the engine’s networks, stay focused on the conversion rate.  Kill it as soon as the conversion rates drop (which it usually does, but not always) and transfer that money to search.

Next week I’ll discuss how to get the most out of the shopping engines.  Here’s a hint: You rarely want to promote your best product.

So far, Yahoo I think has the biggest news.  In a blog post it announced a ton of big updates, include Rich ads in search, Network Distribution reporting (to show which websites are actually serving your ads), and my favorite, the Yahoo Desktop Publishing tool.  FINALLY!

Y! Desktop Publisher

I’ve been part of the beta for quite some time, and it’s been killing me not to talk about it due to NDAs, but now that it has been made public, I can go into a little detail.  It runs on the Adobe Air platform, which makes it look really pretty, but runs fairly slow.  Yahoo makes great use of the real estate with expandable tabs for research and side windows to display secondary–yet still important–data about the campaigns and ad groups.  It’s almost too busy with as much data displayed as possible, but I see that as a feature more than a bug.  In fact, there is so much data being displayed I couldn’t even show screenshots without making it look like a declassified government document that’s been blacked out that it’s virtually useless.  The downside is it’s slow, and still acts more like a Yahoo bulk sheet instead of Adwords Editor.  It’s still a huge improvement over having nothing, but my main warning is to check the error sheet in the upload section of your Yahoo account, because I occasionally find stuff that doesn’t pop up as an error in the Desktop Publisher.  Oh well, it’s still in private beta.

Google Mobile Search & Local Search

There has been a ton of announcements this week surrounding mobile search.  Adsense will allow website publishers to post mobile ads (Adwords has allowed iPhone/smartphone targeting for some time now in the campaign settings), and announced an Android deal with Verizon. This means that Verizon will be the largest American network to carry Google Mobile OS phones.   This also opens up the realms to much better location-based advertising.  However, for any of this to mean anything, Google’s location-based advertising needs to stop sucking.

Meta Keyword Tag is Dead

If you remember search in the 90s, relevancy was often no more than how often the keyword showed up on a page.  This led to someone trying to get to the top of a SERP for the term “shoes” to write a page that went something along the lines of “shoes, shoes, shoes.  We have lots of shoes. We have blue shoes, red shoes, old shoes, new shoes.”  Then they would stuff their meta keywords tag with all those same keywords so engines knew that’s what keywords you thought were important to the page.  Google was the first to stop using it, and even told people to stop sueing each other over it.  Well, during a SMX panel this week, Yahoo said that they stopped considering meta keyword tags for search rankings several months ago, which means none of the big 3 players use it.  What this means to you is if you have a limited time to do your own SEO and can’t afford a pro, don’t bother with the meta keywords tag.  It will literally be a waste of your time.

On a more humorous side, I got a kick out of this admittance from Google’s CEO about how sometimes Larry and Sergey buy companies and don’t tell him until after the fact. Apparently Sergey found Keyhole (now Google Earth) on the web, bought the company, then later walked into Eric’s office and mentioned it.  Eric’s response: “‘for how much, Sergey?’ And it turned out to be a few million.”

For more SMX coverage, you can check out Search Engine Land’s daily recaps for Day 1, Day 2, and Day 3.

Regardless of the tips I present below, I firmly believe that last statement.  The quality score is there for the engine’s benefit and not ours as advertisers.  It’s the engines grading us on how profitable we are for them.  If we’re not profitable enough with a high CTR, they charge us more.  However, is the quality score graded on a scale or on a curve?  If it’s on a scale then you can do everything right and get an “A” and be happy with your high score.  If it’s graded on a curve then your final grade is dependent on the performance of others.  If you do better than they do, you score high.  If you do worse, you score low.  In other words, your ability to write better ads with higher relevance than your competitor impacts your quality score.

Consider this: You have a quality score of 5 and your competitor with identical keywords and bids has a quality score of 10.  Since the keywords are identical the relevancy to the raw search query should be the same, meaning the only difference is the ad copy.  They have an awesome ad and you don’t, so their quality score is higher.  Typically, this means that they can get a click at the same position as your ad for a lower cost per click.  If they can spend less money per click, they can afford to go after more traffic, which means they have more opportunity to score conversions.  More conversions means more cash to fuel future Adwords spending and continued sales growth.

Do I have your attention now?  Good.  Here’s how to optimize your ad groups for quality score:

Keep your keyword count in ad groups between 25-50.  This includes match type variations of the same term.  This isn’t a steadfast rule, but is a good rule-of-thumb.  If you have more, make sure that they are keywords that focus around a very tight central theme.

Don’t bid on broad match.  Keeping everything to phrase and exact match will limit how likely it is for Google to match your keywords to an irrelevant term.  Remember, Google’s definition of relevancy may not be the same as yours.  (If you really want broad match, put it in a different ad group).

Separate your misspells.  If you use the dynamic keyword insertion in your ads, misspells will show up in the headline.  This will hurt your quality score, not help it.  Keep them separate and use the correct spelling of the term in the ad copy.

Don’t use dynamic keyword insertion in ads.  Surprised?  Why?  If you keep the keyword counts low in the ad group, you can write the ad to include those keywords.  Having an exact match term as a keyword and in the ad text without Google injecting it shows maximum relevance.  Besides, with everyone and their mother using the DKI these days, it doesn’t have anywhere near the CTR boost that it used to.

Now before you go off and redesigning your accounts to optimize for quality score, consider this: some of your terms will already have a high quality score.  If you have a couple terms in ad groups that score poorly (like 5-7) and some terms that score well (8-10), then simply remove those poorer terms and put them in their own ad group.  Copy your better converting ad from the original to include in the new ad group and bam!  You have a higher average quality score already.

• Grab the searcher’s attention against 10 organic links and 9-11 other paid links
• Describe the product/service you provide in a manner relevant to the search query
• Have an enticing call-to-action that tells the searcher what is expected of them after they click on the ad.

The ads need to be attention-getting and relevant, but also describe who will benefit from the site after s/he clicks on the ad. As an example, imagine each ad being a closed door with a peephole. The relevance of the ad determines the size peephole to look through, and the quality of the ad is how many appropriate people will be enticed enough to walk through the door. If all these are being performed correctly, it should provide the optimum combination of clicks and conversions, which leads to cheaper CPAs, cheaper clicks, and lots of profit.

TIP: It is very rare to want as many people to click on an ad as possible. Writing copy that qualifies an ideal visitor will tell some people that the site is not for them.

There are several online marketing metrics that don’t have the same relevance in search that they do in other fields. For example, CTR is important to banner ads because the advertiser pays for each 1,000 impressions. CTR in search varies based on each client’s goals, and sometimes won’t play a large role in making decisions within an account. The primary reason to use CTR is if you don’t have conversion tracking enabled. If this is not the case the conversion rate and the Return Of Ad Spend (ROAS) should be your key performing indicators.

Character Limits

The engines are more similar than different when it comes to ad display requirements. Here is a basic list of each engine and their maximum requirements:

Writing Effective Ad Copy & Headlines with Calls to Action

Headlines are in a different color and will be the first part of the ad a person sees. Having this stand out will be ideal to get attention. The best method of standing out is to do something that the other advertisers aren’t doing. This may require using a keyword insert function, but it may also mean to not use a keyword insert when everyone else is. It may also simply be to use a unique style of writing that others aren’t incorporating, like asking a question or even being a little silly. Always keep in mind that it has to be copy that you won’t mind if the client sees while doing their own search, so keep it clean and inoffensive. You should also avoid the use of fragment ideas or concepts, because the short number of characters should be used to complete a full sales pitch.

The description line is the place to back up a claim made in the headline, and/or to give detail about the advertised product or service. It is also the ideal place to add exclusive language to ensure that only the quality traffic is coming to the site. For example, if a client is a networking company for large businesses, a lot of the keywords used by a large business will also be used by consumers and small businesses. By saying “Designed for businesses with 200+ employees” a consumer and the small business will instantly know the ad is not for them. At the same time it will make a searcher at a large business more interested since they know they are the targeted audience.

The display URL acts as a mini-branding function by telling the searcher where the ad will take them. It doesn’t have to be the same as the landing page URL (which will sometimes be very long) and gives some leeway into bending some of the editorial policy rules.

Exclamation points and capitalized words are not allowed in ads. Only one exclamation point can be used within the ad copy of an ad, and one shouldn’t use superlatives like “best”, “greatest”, “lowest”, or “cheapest” without the claim being backed up on the landing page of the ad. This can be worked around, since Google only actively monitors terms like “#1″, “Top”, and “Lowest”.

TIP: If you upload ad copy via AdWords Editor for Google, you can bypass some of the regulations for a limited amount of time. It will let you upload individual words as capital letters. So try saying “FREE” instead of “Free”, and see if it has any impact on your conversion rates.

Using KeyWord Insert Functions

All three engines allow the option to include the search term into a headline or ad automatically to increase relevancy. Studies by Google suggest that using keyword insert increases the click-through rate (CTR) for an ad by varying amounts. The search engines want a high CTR because that’s what they get paid on: clicks. Otherwise the ads take up valuable screen space and don’t generate revenue, which is why the engines typically penalize low CTRs.

By adding the Keyword insert function into an ad, it usually guarantees a part of the ad will placed in bold, which often catches the eye of the searcher. However, as the practice has grown and is being used by less experienced advertisers, some use it as a shortcut for not creating tight ad groups and to still get parts of the ad placed in bold.

TIP: Creating a tightly knit ad group gives more reason to use keyword insert because it will make the rest of the copy more relevant to the keyword being included in the copy.

Keyword inserts don’t always work. One must always consider the character limits on the ad copy while considering using the keyword insert feature, since some search strings can go beyond the 25 or 35 character limits. The engines require a backup to display in case the search query is too long. He backup is the description after the colon mark within the brackets:

{KeyWord:Buy Black Shoes}

A space is not needed after the colon because that would tell Google to place a space before the word “Buy”, which will waste a character and will get chopped off anyway.

Google Ad Copy

Google requires two unique lines of text that can run up to 35 characters each. Previous experience shows that ads usually perform better when each line is an independent sentence instead of one sentence running across both lines. Typically the headline serves as a stand-out function that tries to separate it from the other ads. The goal is to be relevant to the search query and visible to the searcher. When an ad has the same keywords as the search query, Google puts those keywords in bold within the ad. This is often done by using a keyword insert function that takes the search query and inserts it into your ad and instantly making it bold. However, as everyone tries to stand out by using this function, they all begin to look the same. In order to truly stand out one can remove that common factor and be a successful ad without having anything in bold.

Yahoo Ad Copy

Yahoo currently allows 40 characters in the headline with 70 characters in the description line. There are two primary differences between Google and Yahoo copy:

1. Google breaks its 70 character limit up into 2 lines of 35 characters, where Yahoo has one line of 70 characters that automatically wraps to a second line as space requires.
2. Yahoo allows for alt text for dynamic headlines. These allow for more control over what appears with a keyword, if the search query exceeds the character limit.

TIP: Yahoo strongly recommends the use of keyword insert to all advertisers. If your conversion rate is starting to dip on otherwise strong copy, try replacing the dynamic headline with a static headline .

Try using the same ad copy on all three engines simultaneously. This will limit the amount of time needed to run statistically relevant ad copy tests due to the higher impression, click, and conversion data.

MSN Ad Copy

MSN took the basic concept of Google’s ad system like testing, geo-targeting, and keyword-insert, and expanded it. The character limits are the same as Google’s, but instead of two description lines of 35 characters MSN has one description line of 70 characters that will automatically wrap to the second line. Visually this makes all of the ads look left justified compared to Google’s which look force justified. Along with keyword insert, MSN allows for a new feature called dynamic text for each keyword. The premise is that one can change the standard order-level ad copy to better fit a specific keyword. This will typically benefit eCommerce sites with large volumes of product pages that want each product page as a landing page for a keyword.

MSN Dynamic Text Example

In the above example the name of the order group was put in the headline as a Parameter to emphasize a larger sale than one that would only benefit the searcher, and help the advertiser know what sale language caught the searcher’s attention. The keyword insert function was used early in the ad to draw attention and increase relevancy to the searcher, showing that the site has exactly what she is looking for. Finally, a third parameter of price was included so that the searcher knows exactly what she will find when getting to the site.

Using Price in Ad Copy

There is a debate of whether one should or shouldn’t include the price of an item in the ad copy. The argument against is that if the searcher has seen it for less somewhere else, regardless if it is not an exact item match, then she will ignore the site completely. This can be bad for both parties if there are additional rebates or other offers that the searcher wasn’t aware of before clicking on the ad. The argument for including cost is it tells the searcher up front what they’re expected to do and what it will cost them, which should increase the conversion rate. However, one would have to test different ad copies to see if the overall revenue generated with mentioning cost is greater or lower than not mentioning the cost. This will be shown in more detail later. Generally speaking, if the price is above certain psychological levels, or above the price of competitors in the same advertising space, don’t put the price in the copy. If the price is lower than competitors, and the average shopper knows that price is a good deal, then put it in the copy.

Whatever you write for your copy, keep in mind that the headline has to relate to the keyword, the copy has to relate to the headline and sell, and the landing page needs to relate to the copy to avoid a disconnect between you and the searcher. If you have suggestions beyond what is written here for successful copy, please feel free to share it via the discussion.

Ad Group Organization:

As in Google this should be done by the similarity of keywords (as opposed to similarity of definitions), however, it should also be done by keyword volume.  For example, if you have a campaign featuring all the colors of cars and trucks in your showroom, you should not just have and ad group for “car colors” and “truck colors”, but break these down even further to “High Volume Car Colors” and “Low Volume Car Colors”.  I haven’t found an advantage of cutoff points at specific limits, but for ease of design, I use 10,000 queries per month as my litmus test.  Keywords with more than 10,000 get into a high volume ad group, and keywords with less than 10,000 go into another ad group.  The query count can be found within the keyword tool in your account.

Ad Copy:

Yahoo has 40 character headlines instead of Google’s 25 character limits.  Use the headline as your call to action, with the body including your normal marketing message.  This inspires those who are attracted to the headline to follow through with the called-upon action.  Calls to action typically include a verb like “buy”, “save”, “order”, and can also include a time connotation like “now”, “today”, or “before 9/05″.

Also, no matter how tightly knit your ad copy is to your ad groups, you should almost always include the keyword insert.  Their systems love keyword inserts and it will almost always raise your quality score.  Like Google, higher quality scores mean better positions for cheaper clicks.

Landing Page:

Keyword-level landing pages is ideal.  Your conversion rate will be higher and Yahoo will give your ads higher quality scores if ALL the keywords within an ad group have a keyword-based landing page.  It can be the same page for all keywords, but they should all have it.  Remember what I said about high quality scores on ads?

The Long Description

Back in the day Yahoo had two types of ads: a short description and a long description.  The long description would allow 180 characters and be shown when your ad ranked high enought to be seen above search results instead of along the right side of search results.  It would also be the default ad copy for the content network.  This is no longer the case.  It’s dead.  Even if you fill it out you still need to write the short description ad, which will be shown for everything.  Don’t waste your time and just leave it blank.

Ad Testing:

Yahoo loves for ads to be tested, even if you know one will perform better.  Try to always have 2-3 ads in there, as it having a test ad does seem to impact quality scores of both ads.  Naturally they want the ad optimizer to be turned on (which optimizes based on how they’re paid: CTR), but I prefer to leave it off.  Play with it and determine which works better for you.

Hopefully this helps you optimize your Yahoo ads.  If you have any questions please feel free to leave them in the comments and I’ll answer them for all to see.

Excel is undoubtedly the most important program I use in conjunction with my PPC work. It’s the Swiss Army Knife of online tools where I build my keyword lists, write my ad copy, prep campaigns and ad groups for uploading, and the center of my analysis of historical data that my campaigns have produced. I have to assume that others use it as often as I do for these and other tasks, so I thought this would be a good time to go over what I consider the most useful tools to use.  If you’d like to see even more, check out Josh Dreller’s excellent series at Search Engine Land, called How to Excel at Excel

Concatenation When I first learned to use this tool several years ago I asked where had it been all my life! This allows you to combine the information in two cells together into one additional cell.

=CONCATENATE(A1,B1)

To automatically include a space between the words in each cell, you can include a space using quote marks between the two cell numbers, so the equation would look like =CONCATENATE(A1,” “,B1). This is best used to combine two groups of words for keyword generation

Character Counting If you’ve done anything in search you know that the character limits in search engine ads are brutally short. That’s why you have the LEN counter to help you:

=LEN(A1)

This will tell you how many characters are in the designated cell. I usually set my ads up in three rows, each with a len equation, so I can play with any of them as needed.

Trimming There have been numerous times where I’ve spent much more time than it should have taken trying to format the ideal piece of ad copy to fit within character guidelines only to later find out I had an extra space or useless character taking up room. Using the trim equation will remove all of them and leave only one space between words, and remove any unneeded spaces at the beginning or end of the cell.

=TRIM(A1)

If you duplicated my character counting example in Excel, you’ll notice that the second description line (I Love Writing PPC Ads. Don’t You?) is actually 34 characters, with an extra space at the end. If you put the trim equation in C3 for A3, the LEN count in B3 will drop to 34 characters instead of the listed 35. Try it!

Left/Right Trimming Instead of removing all floating spaces regardless of position, this formula removes the dictated number of characters from either the left or right side of the cell. This is handy when editing URLs, where part of the cell stays constant, but other parts need to be removed.

=RIGHT(A1,2)

=LEFT(A1,2)

The formula will remove the number of characters stated after the comma starting on either the right or left side of the cell, depending on which formula you use. For example, if you have a URL that looks like http://www.yoursite.com?pid=13, and you wanted to remove everything after “.com”, you would write the formula to look like RIGHT(A!,7). I count 7 characters, which includes the question mark (?) and the equals sign (=).

Word Counting Word counting is good as an analysis tool to see how many words within a keyword string perform best.

=LEN(A1)-LEN(SUBSTITUTE(A1,” “,”"))+1

This will return only a number. For example, if your keyword was “White car”, then this formula would return a value of “2″. If your keyword is “New Used Car”, then the formula would return a value of “3″.

VLOOKUPs Vlookups–short for vertical lookups–are probably one of the most powerful analysis tools, since they allow you to compare data for the same source cell to different entries within a table of data. In search, this is usually comparing a keyword’s performance over a given length of time.

=VLOOKUP(A2,$F$3:$J$247,3,)

There are some very important issues you need to be aware of when using these formulas:

• The first entry (A2) is your source cell, or most commonly your keyword. If you have the same keyword in multiple match types, you’ll need to concatenate the keyword and the match type so the two are in a single cell, otherwise you won’t get correct data. Be sure to concatenate your data the same way over all data periods.
• Do not forget to include the dollar signs ($) in the table field, which is the group of numbers between the first and second commas ($F$3:$J$247). If you forget the dollar sign, your data table will move down with each new Vlookup. The dollar signs keep the data table static.
• The number between the second and third commas is the column number in the data table that you want to retrieve the information from. This includes the column with your source data! Count by starting with the column your source data in as column 1, and count over the number of columns until you come to the data you want to see.
• Don’t forget the last comma after the column number. The help section states that this comma is used to lookup a range in the value, but in all honesty I have no clue what that means. All I know is that it works well with the comma and doesn’t work well without the comma.
• Be sure to use Excel’s formula help section to understand how to best use this formula for your specific data.

Proper Statements It’s always good to have proper punctuation! This formula will capitalize the first letter of each word in a cell, which I think is the most attractive formatting for ad copy text.

=PROPER(A1)

Using the formula will turn a sentence like “this is a ppc headline copy” into “This Is A Ppc Headline Copy”. After the cells have been PROPER-tized, copy it and right click on an empty cell. Select “Paste Special” and then “paste values” to turn the text from a formula result into editable text. Then you can make the minor adjustments like capitalizing all of “PPC” in the example, and maybe making the “A” lowercase for proper formatting and grammar.

Google:

In the past I always had to submit a claim via my rep at the customer service number. However I recently discovered a specific page buried within Google’s support section that allows you to submit a claim directly to the ad click quality team. It should be done on an ad group basis, but in some cases it is definately worth the time involved.

Check all the boxes that you think may be signs of click fraud. Once you hit the continue button you’ll see links to the help section that might contain articles that explain what you’re seeing. At the bottom you’ll see a question with radial buttons asking if the articles answered your questions. Even if your question was partially answered, click no. Doing so will expand the window to include a submission form. Now it’s time to get down to business:

Fill out all the applicable areas and click submit. You’ll get an automated confirmation from the click quality team and a response several days after their investigation.

Don’t expect a full 100% credit for the clicks in that ad group. Google will more than likely say that a percentage of the traffic didn’t meet their expectations, and give you that percentage as a credit, or possibly even a portion of the percentage as a credit.

Keep in mind that Google will only investigate claims that are filed for traffic received in the last 60 days. Put a reminder in your calendar to do this task every two months to get the maximum benefit and decrease your billable clicks.

Yahoo:

Yahoo offers online data to learn about click fraud and how to navigate it via their Traffic Quality Resource Center. To file a claim you need to log in to your account and click on the customer service link at the upper right hand of the window.  A new window will open up that will allow you to write a message. Be sure to click on the drop down box underneath the type of inquiry request and select “Traffic Quality”.

It also gives you the ability to add attachments like spreadsheets or log files to back up your claim. What I like about the Yahoo system over the Google system is that the response email tells you when you can expect a time frame to have your case reviewed and completed.

To combat future inadvertent traffic–whether it be from click fraud or other unqualified traffic–you can request to receive a raw query search report every 30 days to look at the raw search queries that are producing the impressions for your ads (yes, I’m still talking about Yahoo, not the Google report).  Look this over and see what terms you don’t think should be there. Add those terms as excluded words at the ad group or campaign level and let your money be spent on better quality traffic.

So even though there aren’t daily articles on click-fraud anymore, know that it’s out there, and chances are you’re affected by it.  Fight it, because every dollar saved is one extra dollar towards your next conversion.

All I really care about is how this affects advertisers like you and me.  What does this mean for our accounts in the near future and beyond?  For right now, nothing.  Before anything happens the deal needs to get regulatory approval by the Justice Department.  And considering how hard Ballmer’s lobbyists fought the Google/Yahoo deal a couple months back, you have to assume Google will be more than happy to return the favor.

Assuming all that goes through and everyone is happy, then there is still a 24-month implementation process before all Yahoo SERPs are powered by Bing. During that time frame it appears that the Yahoo Panama interface will be retired and all advertisers will purchase ads by auction for both Yahoo and Bing through the adCenter interface.  Self-serve clients (whcih is almost everyone) will do everything through adCenter, while premium clients will be handled through the Yahoo sales team, but also do everything with Microsoft’s technology.

Make no mistake, this is huge.  As Danny pointed out yesterday in a seperate article, Yahoo is bowing out of search.  In the meantime, here are some suggestions on how you can better prepare yourself for this transition:

• Get Used to the Bing Interface: It is mighty quirky, so learn your way around it.  I’m sure changes will be made in the future, but learning the system now will shorten your learning curve as updates are made in the future.  If you haven’t opened an account, do so here.
• Download the adCenter Desktop: It’s still in beta, but I can only assume this tool will get better and better, just like the Adwords Desktop tool did, so learn it, live it, love it.
• Play around in the AdLabs: I’m always surprised that people don’t know about this fun sandbox for potential features and tools, but this is a great way to see what crazy stuff those engineers are thinking about for future improvements.  Familiarizing yourself with them today means less time figuring out how to use them tomorrow, if/when they get incorporated into full features within adCenter.
• Read the Help Guides & Forums: This may sound too newbie-like for expert advertisers like yourself, but it really does help understanding the wording differences between the engines.  It also helps you understand a little on why things are organized the way they are, and from a logistical perspective, these documents are updated the most frequently.  If you are a newbie, then you NEED to read it.  Login to your account and click on the help link in the upper right above the search bar.

Change is coming, as it always does in the dynamic world of SEM.  All we can do is prepare.  Doing the above steps will put you one step closer to readiness than your competitor.  Even though this may not happen for several months, start learning today and squash the competition tomorrow.

Courtesy: BusinessInsider.com

You probably get them as much as I do: those sales calls from people who can “guarantee top positioning in Google and other search engines”.  Little do they know that when they call me, they’re talking to someone who doesn’t mind showing them just how little they know about search engines and business in general.  Heck, if I can keep them on the phone a couple seconds longer, that’s hopefully someone else saved from hearing their snake oil spiel in the first place.  On one such call, I let the gentlemen finish his whole script and he proceeded on the hard sale.  I asked him one question: “What kind of ROI can I expect to see from your services?”

“Oh, our ROI is AWESOME” was his response.

Um…no it isn’t.  Last time I checked, ROI was a calculation where you take earnings minus cost divided by cost multiplied by 100 to get in percentage terms [((E-C)/C)*100], which I’m pretty sure leads to a number…not AWESOME!  The analysis of how that number meets expected goals may lead to the label of “awesome” and high-fives all around, but ROI itself is simply a number.

If you’re wondering why I’m ranting on this, it’s because this is the perfect example of mixing up the difference of results and the interpretation of the results.  This is critical when it comes to monitoring PPC performance.  You could have a 500% ROI, which some might consider awesome, but what if your break-even point required a 750% ROI compared to other activities you could have done with those resources?  Ladies and Gentlemen, in this case “awesome” has left the building and you have some explaining to do.

Since PPC can be factored down to the penny at a keyword level, don’t consider ROI as a goal, but as a floor to build on.  Look at your daily or weekly reports and ask yourself “Can I be happy with these results if they continued for X amount of time?”  If the answer is no, then you just reviewed the actual results, and interpreted them to be insufficient (aka “not awesome”), regardless of what the actual ROI is.
If you know that to break even after shipping, commissions, taxes, and all other costs that you need a 250% ROI from PPC (or $2.50 ROAS…same thing) then you should set your floor at 250% and not your goal.  Set goals in three forms: Ideal, Expected, and Acceptable.

• Ideal is shooting for the moon and really worthy of being called “Awesome”
• Expected is profitable and sustainable.
• Acceptable is north of break-even but you really want it higher.

This is especially critical if you work with agencies because agencies will ask you what your target is, and if you say 250% they’ll give you as much volume as they can at the 250% to spend as much as they can (assuming their compensation is based on percentage of spend).  So remember…awesome is a goal, not a number.  ROI is a number, and not a goal.  Setting a given ROI as a goal is awesome, so long as you know what your results should be.

I was recently speaking to a fellow search marketer who was stumped as to why all the key performing indicators were moving in the wrong direction on one of his accounts.  We checked the the main culprits to make sure nothing was inadvertantly changed.  For your own reference, those main culprits are typically:

• Campaign settings accidentally changed
• Landing page no longer functional, or loading very slowly
• Added a term as a keyword instead of as a negative or vice versa (forgetting to put the minus sign “-” is a big head smacker)
• Reasonable ad copy that follows best practices

Once we determined that these weren’t the issues, I asked him: When was the last time you updated your bids?

“Oh, I have my bids automated so I can spend my time on more important things”

Ah Ha!  Bid automation can be your best friend and worst enemy at the same time.  Most people who have done PPC for any length of time can tell you how time consuming manual bid adjustments can be, especially on accounts that are more than a couple hundred keywords.  Don’t get me wrong–manual bidding is way easier and less time consuming today than back in my day when I had to walk up the Overture hill both ways to the Google school in the Miva snow.  However, I continually find that the professionals who rely solely on automated bidding will sooner or later find themselves stuck in what I like to call the death spiral.

The death spiral occurs when automated bid rules take your bidding limits to the extremes in either direction.  For example: I tell a program that I want to bid between $.50 and $1.00 with a target CPA of $50, and to check back every 7 days.  When the program runs and sees the CPA is $20 instead of $50 with bids at $0.60, it’ll raise bids to get higher positions to achieve more volume, which typically raises the CPA.  But in 7 more days the CPA is $45 with $.75 clicks, but since we’re still under $50, it raises bids again and will almost guarantee my CPA busts over $50–chances are way over.  In the opposite sense, if my CPA is $75 with $.60 bids, it’ll drop the bids as low as it has to to achieve that target CPA, but wait!  What if by lowering the bids the position drops so much you lose some converting traffic?  Then your CPA will actually go up instead of down. Once that happens, you hit the death spiral and will never reach your goals. Doh!

Anyways, back to the problem at hand.  By letting a program do all the bidding for you, regardless of how long you’ve been involved in search and know the rules, you will begin to lose focus on what is the ideal combination of bids and ad copy for a given keyword and become more reliant on the program to continue.

Consider this analogy: A baseball player can hit home runs all day long against a pitching machine, but to continue to be good at batting against real pitchers, the batter must also practice his stance, how he holds the bat, how to twist his wrists as he swings, etc.  When a player begins to show weakness in any of these and can’t hit the ball against a real opponent, he’s sent down to the minor leagues to practice the fundamentals.  That’s what manual bidding is: a basic fundamental that all search marketers need to excel in.  Automation can only follow rules, search marketers can break them when they see opportunity, or to divert sudden disaster.

“Hold on,” you say, “I have thousands upon thousands of terms.  There’s no way I can do manual automation for all of the terms.  I don’t have enough hours in the day.  And even if I did I wouldn’t have time to do anything else in the account.”  That may very well be true, but in that case I want you to manually adjust bids on your top 10 terms and leave everything else on autopilot.  Check up on those auto pilot terms at least once every 30-45 days and make some manual overrides as you spot issues.  But whatever you do, don’t put your whole faith in a bidding tool. Doing so risks the success of the account on the assumption that you were 100% correct when developing the assumptions required to write the rules to base bid changes on.  I’ve been doing this a long time and will be the first to tell you I’m never 100% correct.  (The crazy advertisers who don’t know what they’re doing and bid $10 on terms will throw any assumptions you have out the window).

After my “ah ha” moment my search marketing colleague went back and analyzed which keywords were converting that no longer are, and looked at the bid changes.  Sure enough, he was caught in the death spiral, thanks to a lack of conversions that was due to a hosting error with his client’s site.  The site being down meant people couldn’t convert, which drove the CPA higher, and the bidding program put several moderate-performing keywords to non-performing levels. The impact from the sudden aggregate performance loss from several mediocre terms became very big very quickly.

Please don’t read this as me hating automated bidding, because I strongly believe it has its place, but I disagree with relying on it exclusively for the purpose of working on more interesting aspects of search marketing.  If you’re a search marketer with your head in the clouds thinking about the next greatest test that will blow everyone away, don’t forget to come back down to earth and do some of the nitty gritty work that we all need to do.  Your clients will thank you, and you’ll be a better marketer.

When discussing PPC performance, people love to refer to the low hanging fruit.  You know, that’s the stuff that’s easy to accomplish with little effort that yields great results.  This typically refers to getting more conversions for cheap, but how do you do it?  Here are a couple ways to pick that low hanging fruit and have cheaper conversions within a week or two:

Turn off the Content Network: Don’t get me wrong, the content network can produce great results–if managed correctly.  To manage it correctly it needs to be seperated from search, so turn it off on your search accounts and isolate content ads in their own content campaigns.

Add negatives: Run a search query report and look at all the search terms that have generated clicks.  Sort by impressions largest to smallest, and look for terms that are not converting and don’t resonate with your target customer.  Add them as negatives so future searchers of that term won’t see your ad.  If they’re weird terms but are converting, leave them alone.

Add misspells of converting terms: If your keyword “shoes” is converting like crazy, then I’m betting you that “sheos” or “shoeses” will too.  Add common misspellings and keyboard errors as exact matches as keywords, but make sure that the ad group doesn’t have keyword insert enabled, because then it might be taken down for editorial reasons.

Check landing pages: If terms that used to convert no longer do, maybe it’s the page you’re sending them to.  Make sure your page is what you want it to be.  If it is, test a different page or even create a whole new landing page for that keyword or ad group.

Pause poor performing ads: If one ad accounts for 80% of your conversions and the other only 20%, get rid of that 20% ad!  Let all those impressions and clicks flow to the better converting ad, and you should see an immediate lift in results.

Following these basic steps should yield immediate results (often times within hours or days).  If you have already done all of these, go back and run another search query report for a different time period than your original one.  After all, Google announced a while back that 20-25% of queries are ones they’ve never seen before.  Repeat this step every 30-60 days.  Now, go get some conversions!

credit: BusinessInsider.cm

Bing can be portrayed as a search marketer’s best friend or biggest annoyance.  Agencies, who typically charge based on percentage of media spend, hated Live/MSN search because it had relatively no search volume, which meant no media to spend, which meant no fees to charge.  It also has the hardest user interface to properly setup ad groups, took the most time to manage, and probably has the most quirks like {param} settings and a bunch of other baloney that 95% of the people don’t know how to use.

But then this rebranded search engine came out called Bing.com and was backed by $100 million in marketing–and get this–people are actually using it!  So is it time to rush over to the adCenter and open up an account?  Well, if you like making money, then you probably should.  Here’s why:

Since agencies have often shunned it for so long, there still aren’t a lot of other advertisers on Bing compared to Google and Yahoo.  This means less competition, cheaper CPCs, higher CTRs, and hopefully higher conversion rates.  Even though it only has 7-9% of the market share, you know what?  That’s still 7-9% of the BILLIONS of searches that happen every month!  If you could increase your orders by 7-9% with a 4-5% increase in PPC spend, wouldn’t you want to?  Also, since the costs per click are lower (due to the less competition) then that usually means lower costs per conversion, which means you can afford to buy more!

OK…So You’re Going to Advertise on Bing.  Now What?

Like I mentioned earlier, adCenter is the quirkiest interface to work in, so I wouldn’t go duplicating your Google account and importing it over to Microsoft.  Instead, look at your converting keywords over the last 60-90 days, and import only those.  AdCenter ad lengths are the same as Google’s so you can even import the same ads if you want.  Unless you really want to spend some time reading the help guides, I’d stay away from the param settings for now.  I’ll explain those in another post.

Finally, make sure you don’t import your Google bids into MSN, otherwise I can almost guarantee you’ll skyrocket in top position.  Use bids 30-50% lower than Google to see how you do, and adjust accordingly.

So should you advertise on Bing?  Yes. Yes you should.

It’s not uncommon for me to meet people who are interested in getting started with paid search, but have no idea how to get started.  That’s usually why they come to me in the first place.   More often than not, there is one question that trumps all others right out of the gate:  How much can I afford to pay?  It’s one of the toughest questions in search marketing, and it usually comes from a conversation that goes something like this:

I can spend $500 each month on advertising on Google and other search engines. But, what do I set my bids at? Where do I start?  How do I know what I can afford to pay for a sale?

If you’re like most people who have asked themselves this question, your answer is probably similar to theirs:  Less than what I’m paying now.

I’ve determined that the easiest way to answer this question from the beginning is to start at the end and consider how much profit we want from PPC, and using that to determine how much we’re willing to pay for a sale or conversion (typically referred to as a Cost Per Acquisition, or CPA).  So grab a pencil and some paper, or open an Excel window, and prepare to think about your goals.

Things to think about:

We need to consider a few things before figuring out what a reasonable CPA is:

• How much margin is gained from each sale?
• How often does your site convert visitors to buyers?
• Is your margin the same amount regardless of product or quantity, or does it vary per transaction?

Once you have considered this information–even in just ballpark terms–then you can begin working backwards to find out what you can afford to pay per sale and then determine your ideal cost per click.

First of all, how much of your margin are you willing to reinvest into the business in the form of future PPC advertising? This answer is based solely on your objectives and intentions, so there’s no way I–or anyone else–can tell you what this number should be.  As a starting point, you may want to consider this number in terms of a percentage. This will allow you to adjust your budgets over time so it’s easy to calculate modifications when you make changes in your pricing or cost structure. As an example, let’s assumes an advertiser is willing to invest 30% of her margin into PPC advertising to determine her ideal cost per conversion.  (I keep emphasizing PPC advertising because if you consider all advertising you will have a lot more volume from higher CPAs than you intentioned, and this will lead to a lot more money spent than you planned, and leave your original goals useless.)

EXAMPLE:  A website sells a product for $299.99, with a cost of goods sold of $194. This means the sale has a margin of $105.99. If she reinvests 30% of her margin, she would have $31.80, which would be your acceptable CPA.

Ta da! Now this advertiser knows how much she’s willing to spend for this $300 sale, roughly 10% of the sale total, or $30-32.

Determining Costs per Click

Once you know how much you can afford to pay on a sale, then you need to know how often you can sell a product to someone who comes to the site. This is where your site conversion rate comes in. If you don’t know this number already, simply take the number of sales (S) you receive on your site and divide it by the number if unique visitors (UV) over a given length of time, usually a month. Multiply this number by 100 and you have your conversion rate in percentage form.  As a formula, this would look like:

Conv Rate =(S / UV) * 100

To continue our example, we’ll assume that our advertiser has made 20 sales from 1000 visitors, which would be a conversion rate of 2% [2%=(20 / 1000)*100].  After you know your site’s conversion rate and your acceptable cost per conversion/sale, then you have the information to figure out what you can afford to pay per click to get those visitors to your site. Take your conversion rate in decimal form, (the conversion number you have prior to multiplying it by 100), and multiply it by your acceptable CPA.  In our case 2% is the same as 0.02, so the formula would look like this:

0.02*$31.80=Max CPC

Our advertiser has determined that her max CPC to meet her CPA is $0.64 per click. Voila!

WAIT! Don’t set bids to be $0.64! That would be too easy. Remember that your bidded CPC is rarely the same as your actual CPC, so you can go as much as 20-40% higher than your acceptable CPC to get close to $0.64 being your actual CPC.  In this case that would make the bidded CPC somewhere around $0.75-0.80.

DOUBLE WAIT!  There’s one other problem: This method doesn’t take into account competitive factors, ad copy changes, or landing page conversion rates, which all can have huge impacts on your costs per click AND your PPC conversion rates. So what do you do then?  Well, the honest answer is you test everything.  First of all, given the products/services you sell, is $0.64-0.80 a high CPC or a low CPC?  If you’re selling insurance you’re not going to be able to play ball with the big leaguers (unless you follow my advice on how to compete with bigger advertisers), and if you’re selling buggy whips, then your ads may be crammed in position 1, which is usually a good sign that you’re over-paying.  So test, and re-test again to see which of the variables, or combination of variables, gives you the best outcome.  You can always go lower and get cheaper CPCs and CPAs, but if you want to max out what you’re willing to pay to maximize volume, then this is how to get a good start.

Big news just came out from the Google Adwords blog.  Now you can import your established goals in Google Analytics over to your Adwords account.  This means that you won’t need to separate Adwords conversion code anymore.

The blog post specifies this is ideal for using the Google conversion optimizer, which gives Google control of your keyword bids in order to make sure your conversions come in at a specified CPA.  (Before this can be activated a campaign needs to have 30 conversions within a 30 day time span).  I’m not a big fan of this approach, but if you do it just make sure you take out any of your own branded names out as keywords so Google can’t charge you for those conversions.  More on this in a later post…

The only question that is not answered is the gap that comes from 1st click and last click recording. In Adwords, the conversion gets back-dated to the original date of the click (1st click), and not the date of the sale.  Google Analytics, however, marks the conversion the day it happened (last click), and not the date of the original paid visit.  This is often why reports from the two systems sometimes don’t add up.

I have some Googlers looking into this for me, and will update the post as I learn more.

The original purpose of day-parting was to let advertisers turn their ads off when they don’t want ads within a campaign to be seen. This could be due to call center hours, or perhaps a drop in the conversion rate. Here’s a better idea: Use day-parting across multiple mirrored campaigns to make sure you get exposure at different parts of the day. Let’s walk through it step-by-step:

1) Go into Google’s reporting interface and run an hourly report regardless of date for a sufficient time period at the campaign level, preferably for a single campaign. Be sure to check the boxes labeled “impression share”A sufficient time period is usually at least 30 days, but possibly up to 90, depending on your conversion volumes. Make your report screen look like this:

2) Export to Excel, and sort by hour of day. You should have 24 entries, ranging from 0-23. You need to look for a couple things:

• At what hours of the day is your impression share lowest?
• At what hours of the day is your conversion rate the highest?

Your impression share is what percentage of search queries are you getting for the keywords within the given campaign. Low numbers mean you’re losing out on opportunities. High numbers mean you show up often.

3) For example’s sake, let’s say that our busiest hours are 6:00-7:00am, 12:00-2:00pm, and 5:00-7:00pm on weekdays. For these hours we’d set our ad scheduling to look like this:

The above example is an extreme where you only run the ads during these peak times. However, if you’re using advanced day-parting also allows you to change your max bids during these different periods within a day. So if you know the 12-2 hour is where you’re going to make all your money, you can dictate that those bids automatically be raised any percentage over the Max CPC at the keyword level that you’re comfortable with. During the other hours of the day you can run the ads at a lower percentage than the max CPC, so you don’t get charged as much per click. Keep in mind that your average position will decline.

This seems pretty thorough as-is, so why use mirrored campaigns? For some really competitive keywords, you may not even last through these small peak hours to get the exposure you’re looking for. In those cases you need more than one campaign with different daily budget caps to make sure your traffic is getting spread across the times that you want, and not whenever Google thinks its best.

Expect to spend 2-3 hours of research per campaign in reports before deciding which hours are best suited for your campaign. Due to that time requirement, I’d recommend doing this on only your top 1 or 2 campaigns, and only if you see your daily budget being maxed out constantly, but can’t afford to raise it. Another good sign is when Google suggest that you should at least double your daily budget to get max exposure.

Remember, the goal is not to get more impressions or clicks for the sake of getting traffic, but instead to maximize conversions at peak times of the day. If you execute this tactic and you’re not seeing an overall increase in sales within a month or so, don’t bother with the extra management. Kill the test and go back to what you were doing originally.