Planning for PPC Success in 2011
Dear Reader,
Welcome to Performance Marketing, the monthly newsletter for online marketers looking for results.
Paid search, with its high rates of return, flexibility, and ease of implementation, will continue to be a significant source of revenue for online advertisers in 2011. In 2010, eMarketer estimates U.S. advertisers will spend $12.37 billion on paid search and both search and display will see increases greater than the rise in total US online ad spending, estimated at 13.9%.
We've devoted this issue to helping you prepare for your 2011 paid search campaigns. Read this month's interview with LSF Interactive's Paid Search Manager Peter Levin and check out 18 questions you should ask yourself before launching your next PPC campaign.
Wishing you a healthy, happy and successful 2011!
All the Best,
Daniel Laury
Founder, President and CEO
LSF Interactive
Feature Article
Planning for PPC Success in 2011
Q&A with Peter Levin, Manager, Paid Search, LSF Interactive
What should an advertiser decide first when launching a paid search campaign?
The most important initial factors in designing a paid search campaign are budget and performance goals. Paid search has a lot of flexibility and customization. That's why it's important to have a brainstorming conversation first. Your strategy precipitates from the findings of your conversation.
There are two different numbers we consider. The first is the overall opportunity for traffic for this particular campaign. This is must be weighted against the second number, the desired ROI. This depends on how aggressive the client wants to be. We make this determination based on revenue, cost per lead, or user action like number of video views, etc. If a marketer doesn't know what the ideal ROI is we start with a benchmark to judge what success is and shoot for continual improvement.
How should an advertiser balance volume and ROI?
In general you need to figure out what your business goals are and what you expect from your ad spend. For example a client like Speedo could be in first position for the term “swimwear” with a significant ad spend or they could be in a lower position with a different term and a smaller investment. Your bid and quality score determine where you show up. A more expensive click can drive a more desirable action. You might be willing to spend $2 vs. $1 if you know you'll get a better conversion rate. You also need to consider the cost of goods, desired profit margin, cost of customer acquisition, etc.
What are the next most important factors?
After an ROI benchmark is set, the next most important factors are traditional marketing elements such as the company's value proposition, which we use to tailor the ad copy. We try to tap into all of the historical data and institutional knowledge that clients have about their brands. For example the messaging tactics they've tried in the past, how they compare to the competition, even which websites they read to learn how are people referencing the industry they are in. This gives us good insight into keywords and the market.
What LSF Interactive is really good at is taking a client's knowledge of their business and applying it to the online space. We have the tools to pull competitor keywords and can mine this information. It accelerates the education process we go through with every client -- getting into the nuance of it. There are so many different levels of paid search. Even if a client has some kind of paid search baseline every engagement can be looked at as new.
What are some of the advantages of paid search?
One of the advantages of paid search is that it is fluid and trackable. We can track what was spent on a particular term to the hour and how much revenue it generated. This information can influence the keywords we bid on, position, and time of day for example. Google makes sure there is no guaranteed position but it's easier to influence the issue with paid search than with SEO.
What are the other benefits of paid search?
Paid search is the ground floor in seeing how a site works as a whole. You need to closely track and monitor conversions while you're driving traffic not only to determine ROI but to uncover any issues users may be experiencing. For example, we just launched a campaign for a completely new brand on a site that didn't exist two weeks ago. We are helping them craft who they are and who they want to go after. Because they have no name recognition and no organic history most of the traffic to the site will come through paid search. As a consequence, any issues with site will also be exposed through that.
My team is relied on when site-wide issues come up. Sometimes we can have more insight than the company's internal team. A client may revamp their site and performance changes or the shopping cart is misbehaving and they don't know where to turn. Because of our experience with paid search we've been able to help them find out what is happening and how to resolve it.
How is paid search changing and what's ahead for 2011?
Paid search is a growing medium that's only going to continue to expand in terms of traffic and competition. One shift we'll see in 2011 is in the way companies leverage paid search. Currently advertisers look at paid search as vehicle for immediate return. In general companies are seeing 3 to 5 times back per click and they are making a strong margin.
Some advertisers use paid search as a profit center to fund other campaigns. It's a positive item on the end of month balance sheet. They are reluctant to use other terms that might provide lower revenue. But if you're very aggressive in your ROI it will eventually limit reach and volume potential. It's the classic low hanging fruit. Once you've gotten consumers for best converting terms you must go higher up the tree and think long term.
For example, users searching for the term “Speedo” will convert at a high rate and will be very profitable. They already know the brand and know what they're searching for. Targeting those consumers is like fishing in the same pond vs. growing the pond.
Next year companies will begin to look at customer acquisition and broader goals as well as short-term gain. The potential is there to look at paid search in that way, not necessarily just a profit center but a marketing channel as well and strike for a balance between the two goals. eMarketer predicts branding-oriented online advertising will increase its share of the U.S. total from 36.3% this year to 41.4% by 2014. Paid search advertisers are starting to look at lifetime value and new vs. returning customers. This is a conversation we're beginning to have with our clients.
We take a methodical approach to paid search, getting to know your business, and putting in strategic time before launch. We could launch a campaign in a day or two but we would rather be strategic leaders, think through the factors, balance ROI and volume, and set up campaign that will give our clients good results over the long run.
2010 PPC Planning: 18 Questions
For better results in 2011, answer these 18 questions before launching your next paid search campaign.
1. What is the main purpose of your campaign?
2. What are your goals: conversions or visibility?
3. What does your historical PPC data (if any) suggest?
4. What are your specific budgeting needs and/or goals?
5. What domains is this campaign for?
6. How many distinct products or services do you promote on your website?
7. Will you target all products/services on the site?
8. Are there any keyword areas to avoid or negative keywords?
9. Is your product offering seasonal?
10. What geographic markets will your campaign target?
11. Are there other ways you break up your market, by time zone or by demographics?
12. Who is your target audience?
13. Can each of your target markets use the same landing page and ad text?
14. Who are your top online competitors?
15. What are your core value propositions and unique selling points?
16. What are other current and potential promotions?
17. Which search engine(s) would you like to focus on?
18. What kind of data tracking do you need? Impressions, clicks, and conversions or custom data such as time on site, average pages per visit, and/or bounce rate?
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