March 2008 - Smarter Search

Search engine marketing expert Dana Todd explains how to increase
the efficiency of your pay-per-click campaigns

By Tom Dellner

It seems odd to consider that a discipline as new as search engine marketing could already have its “good old days.” But with pay-per-click (PPC) costs consistently rising 10 to 20 percent year to year, it’s easy to see why search marketers get nostalgic when thinking back on the nickel-per-click days of 2002.

In the face of steadily rising costs, the only way to maintain ROI is to make your search campaigns work harder for you. Electronic Retailer sat down with one of the industry’s leading PPC experts-Dana Todd, co-founder of the interactive agency SiteLab and past president of the Search Engine Marketing Pro­fessional Organization (SEMPO)-to learn how to search more efficiently and get the most out of your PPC programs.

Before you do anything, you first need to focus close to home. “You’ve got to make sure that you’re the best salesperson possible with the leads you’re given,” says Todd. “Fix your landing pages and your conversion pathways. Ask yourself, ‘Is my sales diplomat doing its job extremely well?’ I can’t emphasize this enough. Until you tighten up these efficiencies, any expenditures of time or money on pay-per-click initiatives will be subject to your own failure to convert that additional traffic.”

So first, implement the processes for the ongoing refinement of your website’s conversion performance. And take heart in knowing that these efforts will pay dividends across each and every advertising program-from banner ads to print, radio and television.

As mentioned above, your first step should be to improve your website’s sales and conversion efficiencies. But don’t put all your search efforts on hold until you’re converting leads at 25 percent. “I see clients who freeze their advertising efforts because they don’t want to waste any money until they’re as efficient as possible,” says Todd. “It’s like the person who refuses to date or go shopping until they’ve lost 20 pounds. You want to install an aggressive ongoing process for improving your landing pages, but then go ahead and start your search campaigns, knowing that your efficiencies are improving every day.”

Dana Todd is co-founder and executive vice president of SiteLab, a full-service interactive agency based in La Jolla, Calif. She is on the board and is past president of SEMPO and was recently named the most influential person in search engine optimization. She can be reached at [email protected].

Turning now to the specifics of your PPC campaigns, the first thing you can do is to eliminate waste. “Identify your non-performers,” urges Todd, “those keywords you’re spending a lot of money on, but which aren’t converting well. Turn them off, or cut their budget. Don’t feel sorry for these keywords or make excuses for them (for example, ‘they’re driving brand’). If you want to keep these words because you truly believe they drive brand, then attach some kind of engagement metric to them and give them their own budget, with their own ROI spreadsheet that has less to do with dollars driven and more to do with time on site. Don’t put them on your main spreadsheet-they’ll blow your buy.”

By turning off non-performing keywords, you may find yourself saving a few hundred bucks. Roll that money back in. Reward the keywords that are performing and let them run.

Google and Yahoo apply something called a “Quality Score” or “Quality Index.” They are closely tied to your ads’ click-through rates. A high click-through rate leads to a high Quality Score, which discounts the amount you’ll need to pay for a high position on the results page. Conversely, with a low click-through rate and Quality Score, you’ll need to pay a lot more per click for that high position. It’s as if the search engine is penalizing you for your ad’s irrelevance to the particular keyword query.

To enhance your click-through rate, you need your ad to stand out, says Todd. “One of the first things you can do is to make sure to repeat the keyword in the copy of the ad itself. Consumers want a reaffirmation of what they’re searching for as they scan the page. Also, the search engines give you a bit of an assist by bolding the keyword match in your ad and even in your URL.” Although this seems like a no-brainer to people who’ve been doing PPC for awhile, Todd still sees veteran and sophisticated advertisers who fail to include the keyword or keyword phrase in their ad copy.

OK, so what if all your competitors are doing this; what else can you do to make your ad stand out? Use numbers (e.g., in describing the terms of a sale), symbols or white space, Todd suggests. You may even want to experiment with the form and shape your copy takes on the page-anything that makes your ad stand out from the rest. “The human eye is attracted to aberrations; the consumer is much more likely to notice an aberration than nice copywriting.”

This may seem basic, but it’s a fundamental that can be lost in the world of paid search. “I see many advertisers get a bit lazy and take the same ad and spread it around among different ad groups,” explains Todd. “They stick in different keywords, but that’s not customizing the ad for the ad group. For example, an advertiser might run two ads: ‘Men’s running shoes: 20% off’ and ‘Ladies’ running shoes: 20% off.’ But maybe you know from experience that women are less price-sensitive and respond more to an offer of multiple widths. Or perhaps you know that men respond to a guarantee of free overnight shipping or an athlete endorsement. By creating a message that’s unique and tailored to each particular ad group (whether the grouping is by gender, geographic location or something else), you’ll start creating a brand promise and you’ll see your click-through rates dramatically improve.”

What if you’re unsure of the product attributes that different ad groups might respond to? Use PPC to find out. Experiment with different ads and pay attention to your click-through rates, making sure you swap out underperforming ads before they hurt your Quality Score. (To gauge performance, keep in mind that the average click-through rate on Google search is two percent.)

Match types allow you to dial in the amount of exposure you want your ad to receive for given keywords. Say, for argument’s sake, you run the campaign for a presidential candidate conveniently named “Uncle Sam.” If you were to buy the keyword “Uncle Sam” on an exact match, your ad would only be shown if someone were to enter a query with the exact words “Uncle Sam.” Your ad would not be shown if someone were to run a query on “Uncle Sam gaffe” or-gulp-”Uncle Sam sex scandal.” Thus, you can keep your ad from being shown to uninterested or even unfriendly eyeballs.

Now say you buy the keyword phrase “political donations.” According to Todd, you may want to put that on an expanded match. Now someone who types in “democratic donations” or “political fundraising donations” will see your ad.

It’s a balancing act: you want your ad to attract as much traffic as possible, but you don’t want overexposure to an unqualified audience; this will do nothing but damage your click-through rate. One technique is to start with a broader, expanded match, then dial back to eliminate waste, using your click-through rate as a guide. (Only do this, warns Todd, if you are willing to pay close attention to your campaign-your ad will quickly slide to the bottom of the page if a bad click-through rate harms your Quality Score.) Another rule of thumb, according to Todd, is to put high-volume keywords or keyword phrases (like “cars,” “used cars” or “airline tickets”-these are called “head words”) on exact match and low-volume keywords (like “underwater basket-weaving accessories”-these are known as “tail words”) on expanded match.

Yet another filtering mechanism is the use of negative words. Take our example of the campaign manager for “Uncle Sam” mentioned above. If you were to set “scandal” as a negative word, then your ad would not be served for the query “Uncle Sam Scandal.” Negative words are just another way, in addition to match type, to control the distribution of your ad.

Geo-targeting can be used to help you tailor your message to a given audience as noted above (perhaps touting weather-proof boots in the Upper Midwest or shoes from a popular designer in major urban areas for a query on “ladies’ shoes”), but it can be used in other ways, too.

“Maybe you’re based in the Southeast and shipping costs to the Pacific Northwest prevent you from being competitive in those areas,” explains Todd. “You could set up your campaign so that your ad is seen only within a six-state radius of your home state.”

“When we structure a new campaign, we often plan to over-spend initially-paying top dollar to ensure that we have the number-one position,” explains Todd. “This position always tends to get the highest click-through rate. Once you get that click history, the search engines recognize your ads as relevant and reward you with a high Quality Score and a discount. Now you can carefully scale back your spend and perhaps even maintain the number-one position [thanks to the discount]-especially if you are working hard to test and refine your ad’s creative to maintain that click-through rate.”

For those companies-business-to- business organizations and others-with ads that tend to convert well during regular business hours, but which perform poorly in the evenings (or vice versa), Todd suggests dayparting-a setting that allows you to turn your ads on and off during certain times of day. “Turning your ads off after business hours has a side benefit in that it can help cut off unwanted international traffic.”

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