Can Paid Search Alone Drive Sales-Ready Leads?

Posted on July 25, 2011 by Marta Turek

As an online marketing professional, even in 2011, I still get the sense that marketers of large organizations and business owners alike consider paid search to be the online panacea for lead generation. It is the solution for all corporate ills. It is the advertising engine that will drive registered leads, but not just any leads, sales validated opportunities that will pass through the average sales cycle and just like that, turn into a purchase.

All this from a single interaction with paid search! Miraculous!

Nevermind the Website

Setting up a paid search campaign is quite honestly the simple part, especially if an agency is engaged, this can be done with little engagement from the client. Spending marketing dollars and driving clicks is the easy part of the equation. It is much harder getting the searchers’ attention, motivating them to engage with your offering, and providing information and assets that are unique and actually useful. No… not sales collateral that has been dressed up as a whitepaper, valuable assets that will benefit the searcher.

The theory behind the paid search landing page interaction is that businesses will gain valuable personal/business contact information in exchange for equally valuable content that the searcher will download. Somewhere along the way, some businesses have forgotten to hold up their end of the bargain, driving the conversion by misrepresenting the perceived value of the download on the landing page.

Unless you’re Amazon, a conversion does not necessarily equal money in your pocket. Generating a lead and forwarding the details to sales, while giving the searcher a subpar download is not going to generate meaningful sales conversations.

Paid search is the medium that delivers content to searchers, it is the quality of the content itself that will impact marketing ROI.

Nurture, Nurture, Nuture

Businesses invest these precious dollars into the paid search marketing machine and are then dumbfounded when it spits out leads that require nurturing. We are talking about highly complex sales with ever longer sales cycles that require a formalized sales funnel as well as lead scoring and nurturing methodologies to maximise sales efficiencies and optimally ‘milk’ each lead.

According to MarketingSherpa’s 2011 B2B Marketing Benchmark Report, lengthening sales cycles are one of the top 3 challenges that B2B businesses face today. On average, 60% of B2B organizations experience a sales cycle of longer than 3 months. The length of the sales cycle varies greatly among organisations by business size, industry sector, target market and average deal size.

Paid search, though perfectly capable of driving sales ready leads, will more often than not, deliver a larger quantity of leads that will require nurturing. In order for businesses to maximise their paid search ROI, they need to take accountability for the quality of their online offers and the manner in which they engage prospects after lead acquisition.

Conversions – a function of clicks or impressions?

Posted on May 21, 2011 by Marta Turek

Projecting paid search performance or PPC conversions as a function of impressions is problematic because any performance estimation, is ultimately a function of searcher behaviour.

Definition of an impression, taken from Google AdWords:

Each time someone searches on Google or the Google Network and your AdWords ad displays, it is counted as one “impression.” The “Impr” located on your reporting statistics shows the number of impressions for your ad.

However, when someone searches on Google using Google Instant, ad impressions are measured differently. When someone uses Google Instant, ad impressions are counted in these situations:

The user begins to type a query on Google and clicks anywhere on the page (a search result, an ad, a spell correction, a related search).
The user chooses a particular query by clicking the Search button, pressing Enter or selecting one of the predicted queries.
The user stops typing, and the results are displayed for a minimum of three seconds.

Does an impression mean that someone actually sees the ad?

The answer here is no — just because the ad shows up on the search engine results page, does not mean that it has registered with the searcher.

If someone is using Google Instant and typing in queries, an impression may be counted when the searcher pauses for 3 seconds and then continues typing.

They may then have just glanced at the page and continued to search, potentially changing the search query to something not relevant to the product offering.

Three steps away from action

An impression is three steps away from action – first someone has to register your ad, look at it, decide to click on it and then interact with the landing page.

Without clicking and getting to the landing page, there is 0% chance of a conversion, because the person has to be physically on the landing page in order to take the desired action.

A percentage is only a number, so let us put a face on statistics

Conversion rate, is defined by conversions / clicks
Having a 1% conversion rate, means that for every hundred people that click on the ad, 1 will continue through and convert.

CTR (click through rate) is the ratio of impressions to clicks, defined by clicks / impressions
Having a 3% CTR means that for every hundred people who saw the ad, 3 will click on it

The above estimates hinge on a 100% confidence in the 1% or 3% estimate of a group of 100 people. (in a linear timeframe)

Statistically, that confidence is much lower and never 100%, so any percentage estimates will always vary, because you cannot predict human behaviour.

Using impressions to calculate conversions makes three assumptions:

1.       Searcher will see the ad
2.       Searcher will click on the ad
3.       Searcher will convert on the landing page and take desired action

This is a statistically flawed argument because the confidence that someone will take all three actions is much lower than the assumed 1% conversion rate for someone who does click on the ad.

In fact, using the above averages, there is a 0.03% chance that someone who has not clicked the ad, will convert. Thus, the projections will be unrealistically inflated with no statistical probability that it is even possible to reach the projected conversions when calculated as a function of impressions.

PPC – It’s Relative

Posted on February 14, 2011 by Marta Turek

It has been a while since I have tweeted, networked on LinkedIn, made updates on Facebook or, even, written a blog post. It is this last point that perturbs me most, because as I have said before, blogging every three months more closely resembles a newsletter, than it does a blog. I should either eat my hat or start writing.

No Absolutes in PPC

Sometimes I am asked questions that go something like this:

- If we double our monthly PPC budget what percentage impact will that have on conversions?

- With our current PPC spend what should our performance be and what should our conversion rate be?

Though paid search is heralded for its measurability, one element it does not share with traditional media is its predictability.

Let’s take for example running a full-page ad in a monthly magazine.

The cost is fixed; the reach (number of people reached by single is issue), circulation (number of distributed copies of a magazine) and coverage (percentage of a population group reached by a magazine) are just a handful of magazine metrics that are widely known and shared by the magazines themselves.

Based on historic performance or industry averages, your company will also have a good idea of the return to expect from the magazine advertisement. There are few variable metrics – if you increase budget, ceteris paribus, you can calculate the expected return on investment.

Unpredictable PPC

When launching a new PPC campaign, where little historic data is available it is more difficult to predict the impact of budget increases or provide a forecast of performance.

There are more variable factors in PPC that are in your control, but that also makes the performance outcome more variable. The paid search bidding model also changes the landscape because sudden moves by competitors can also disrupt forecast predictions.

When setting goals and internal benchmarks for your paid search strategy it is important to set your goals based on the relative past performance of your account. Benchmarking against best-in-class numbers may be out of reach for your PPC account in the short term and focusing on absolute numbers will distract from the positive gains you are making.

If you are posting a 1% conversion rate, it may be unrealistic to aim for 5% in the short term (because you read somewhere that this is a good number towards which to aim). Instead, what you should be looking for is a positive trend, this may be slight month-over-month (MoM) but if you are focusing on driving performance then year-over-year (YoY) metrics should show a positive trending improvement.

Your best measure of success in your PPC account is your own YoY data rather than focusing on the 800-pound gorilla in your industry that may have 10 times your budget, can outbid you and dominates the top positions for your keyword basket.

The point is, there is no magic formula to determine how much return a specific budget should yield. It is about how much the budget could yield and this in itself is an iterative process. In PPC, it’s not about good or bad, it’s about better or worse. So if you moved your conversion rate from 0.8% to 1%, you are doing better, which is good.

If you are looking for benchmarks and are willing to spend a little bit of money, start with some quality reports from MarketingSherpa.

Google’s New Third Party Reporting Requirements

Posted on September 2, 2010 by Marta Turek

As a small business, if you are spending advertising dollars online and paying an agency or some other third party provider to manage this service for you, it is only a reasonable assumption that you would know what you are spending and what you are receiving in return for that spend.

Google’s recent announcement of a change to its 3^rd party reporting requirements is a strong indicator that businesses remain ignorant of the information they should be rightfully receiving from 3^rd parties. Though ignorance and information asymmetry may play a role here; simple business common sense also appears to be lacking on the part of the businesses allowing themselves to transact with 3^rd parties who offer close to no reporting transparency.

Google’s New Transparency Rules

To highlight the new requirements, this example has been taken directly from Google’s AdWords Help Center:

For those third parties that don’t provide any reporting today, they should, at a minimum, provide advertisers with monthly data on AdWords costs, clicks, and impressions at the account level.

In July, the AdWords account for Joe’s Plumbing accrues 1,400 clicks on 12,000 impressions for an AdWords cost of $700 (the exact amount charged by AdWords).

Joe’s Plumbing – AdWords report for July 2010
Clicks: 1,400
Impressions: 12,000
Cost: $700

There are no bells and whistles here – the 4 lines above are the absolute basic reporting that 3^rd parties will be required to provide as of February 2011. One’s first reaction should be to baulk at the fact that there are in fact 3^rd parties out there who make a living by literally cheating advertisers out of their money by offering no level of transparency.

Receiving basic AdWords cost data on a monthly basis at an account level only really tells you how much you spent on AdWords in a particular month. The only really useful thing that you can do with this data is make a basic calculation that may have been difficult previously if you were paying your 3^rd party provider a lump sum which was then invested into AdWords at their discretion, following a ‘management fee’.

[Total Monthly Search Marketing Costs] = [Exact Monthly AdWords Cost] + [3^rd Party Management Fee]

Currently, if you are not working with a transparent 3^rd party, the calculation may look like this:

X = ? + ?

You may know what your total monthly search marketing cost is but if you do not know exactly how much the 3^rd party is keeping in their pocket versus actually investing in your AdWords account, then it is difficult to ascertain how effective the actual AdWords investment is.

How ‘nice’ of Google to force 3^rd parties to share this information with their clients, yet, one must ask, what’s in it for Google?

Google’s Magnanimity?

The simple truth is that the barriers to entry into AdWords advertising are extremely low. Anyone can set up a basic account and be spending money on AdWords within 24 hours. On the flip side, you can stop spending money on AdWords just as quickly, as it takes literally minutes to pause an account or shut it down completely. This is a business concern for Google – no business likes to see its customers walk away.

By forcing 3^rd parties to disclose ‘the exact amount charged by AdWords’ Google is trying to create a distinction to the advertiser between the money actually spent on AdWords versus the total payed to the 3^rd party. In this way, if the advertiser is not happy with their return on AdWords they do not immediately discount the medium as ineffective but can do the arithmetic that may indicate to them that the problem lies with their 3^rd party provider.

If the 3^rd party is pocketing a large percentage of the fee, the AdWords system is not to blame for an unsatisfactory return. Thus, the advertiser may opt to change the 3^rd party, while still investing in AdWords. With higher advertiser retention, Google will go singing to the bank, while at the same time be the hero for forcing the ‘bad guys’ to ‘fess up and be transparent with how money is being spent for their clients.

Yahoo! and Microsoft Search Alliance: Preparing for the PPC Transition

Posted on May 25, 2010 by Marta Turek

In the last few weeks as more information has started to trickle its way from Yahoo! and Microsoft about the search alliance, I have started to share some information on this blog to facilitate this knowledge transfer. Ultimately every single advertiser who is managing a PPC account on both Yahoo! and Microsoft should be aware of the impending changes in order to best prepare for them.

I should also correct myself as in a previous post I called the Yahoo! and Microsoft Search Alliance a ‘merger’ when in fact, the new relationship between these two companies cannot technically be called such.

Why It’s Not a Merger

Yahoo and Microsoft will still exist as separate entities and the companies will be working together on some things, while competing on others.

The collaborative efforts will have the following impact:

All advertisers will use Microsoft adCenter to centrally manage their PPC account. Your ads will appear on both properties, the Yahoo and Bing search engines, but this will be managed via Microsoft adCenter.
Microsoft will provide the search algorithm for the organic and paid search results for both companies
The Microsoft team will support standard advertisers, ultimately those smaller advertisers with lesser budgets
Yahoo! will support the premium advertisers, agencies and resellers

Both companies will still compete:

Each company will maintain its own display advertising program
Web properties and products, email and instant messaging will not be affected by the Search Alliance
Both companies will own and innovate their own consumer search experience to compete for searchers and search queries
Both companies will service their respective affiliate search partners and Yahoo! will continue to syndicate its existing search affiliate partnerships

Transition Planning

We know that the transition will be happening, now it a question of when. According to Yahoo! the plan is to transition US accounts before the 2010 holiday season, which translates to roughly November 2010. Should the transition not succeed in this timeframe, it will be left for the start of 2011 to protect the holiday season. We know that the transition period will be initiated in late summer, so you should ensure that all your ducks are in a row by early August to prepare for this.

One can assume that the advertisers spending more money will get priority service and may thus be privy to more options and information. However, even without knowing exact dates, it is important to think about and develop your transition strategy. There are a few options to consider:

- Keep your existing AdCenter account and optimise: you may have an existing account that has a suitable structure, a good click history and simply requires some focused attention as you build the account to handle significantly higher volume and budget.

You should begin optimising this account NOW – start adding ad groups and keyword baskets from your existing Yahoo account. Focused attention now, will result in a higher quality score that will be beneficial in a more competitive and expensive market. (Click costs will go up on AdCenter – this is inevitable, we just don’t know by what percentage, so prepare for this).

- Create new AdCenter account and import from Yahoo / 3^rd party: You may wish to cut your losses, scrap that old AdCenter account and start fresh by setting up a new account and importing either your Google structure or Yahoo structure to the new account. This will ensure that your strategy is more streamlined because you will be working with similar structures – this might not be optimal from a demographic perspective because we’ve learnt that searchers act differently on the various search engines. However, we are all entering the unknown with this search alliance so copying a more optimised and better built out structure in Yahoo to AdCenter, might be a good alternative.

At this stage, there is still a lot that we do not know, but what is important is for advertisers to begin thinking about this PPC transition and planning accordingly. Advertisers should also follow updates closely so as to stay on top of this story as it develops. One handy way of doing this is to set up Google Alerts for relevant search terms so that the pertinent information is delivered at your doorstep so to speak.

Getting the Yahoo! and Microsoft Search Alliance

Posted on May 6, 2010 by Marta Turek

Recently, I wrote about one of the main impacts of the Yahoo! and Microsoft Search Alliance being the transition of Yahoo! Search to the Microsoft adCenter platform. For search marketers this is a fairly significant consequence of the Search Alliance, but for the searcher, the changes will not be as drastic.

So is anything going to change for the searcher? If yes, what? More importantly, when?

Ins & Outs

The short answer is, not really. The searcher is still going to benefit from Yahoo! and Bing, with their individual offerings. Yahoo is not going to suddenly become obsolete and transition completely into Bing.

Quote from the Search Alliance website:

When the Yahoo! and Microsoft Search Alliance is implemented, both companies will continue to have differentiated consumer search experiences. However, Microsoft will manage the technology platforms that deliver the algorithmic (powered by Bing) and paid (powered by adCenter) search results.

What this means is that Yahoo will still look like Yahoo, but the search results will be ‘powered’ and thus syndicated by Bing, much in the same way that Google syndicates its search results to AOL.

Yahoo will try to give its search results a bit of a twist ‘by innovating around the listings it receives from Microsoft by integrating Yahoo! content, shortcuts and tools.’

The really simple answer for consumers is that unless they plan on buying shares in either of these companies, the intricacies of the search alliance will not be that obvious to them. The implications of Microsoft receiving a 10-year licence to certain Yahoo! search technologies thus making Bing and Google the principle ‘big II’ search engines will be interesting to say the least.

On the flip side, the search advertiser who is putting their dollars into Yahoo has a little bit more to worry about. The ramifications are slowly starting to become clear – more on that soon!

Yahoo & Bing Merger – The Pain Awaits

Posted on April 28, 2010 by Marta Turek

In mid-2009, the Yahoo-Bing merger became final and a wave of speculation hit the market about what it meant for the search industry, searcher experience, market competition, SEO & PPC implications etc.

We are now in Q2 of 2010 and the hype has died down, people got used to the merger and the key focus seems to be on Bing market share relative to Google. The irony is that slashing two engines into one was deemed the best strategy to give Google a run for its market share. Currently, market share figures for the US look as follows:

According to results published by Experian® Hitwise® on March 10, 2010 Bing’s share of search increased for a 3^rd straight month, with share of search sitting at 9.7% compared to Google’s 70.95%.

Looking at market share data is fairly rudimentary and no less painful than when there were three major search engines in the ring. What many of us may have forgotten or chosen to block out is the fact that there are far more tangible implications of this merger awaiting us. Bing and Yahoo have 24-months to make the merger complete.

According to the Yahoo website, the split of services will be as follows:

Microsoft will be the provider of web, video and image results to Yahoo!, and the basic list of results provided will be the same as those displayed on Microsoft’s Bing engine. Microsoft will provide the search advertising platform (adCenter) that will be used by both companies, and will manage the search advertising marketplace.

Ultimately this means that Bing has 2 years to roll Yahoo’s Search Marketing program into its own, making Yahoo’s Paid Search obsolete.

Whoa, No More Yahoo Search?

A reality that all advertisers will have to face is that Yahoo Search will merge into Microsoft adCenter. What this means for both advertisers and agencies is that more focus should be placed on Bing to begin understanding the interface better, increase budgets and develop a more advanced Microsoft adCenter strategy.

Currently, the reality for many advertisers is that Microsoft adCenter gets the left over budget, while Google and Yahoo receive the bulk – this will need to change when Bing becomes the 2^nd major paid search marketing platform after Google.

Expecting More from Bing

There are a number of reasons that advertisers and agencies alike may feel a sense of trepidation about the implications of this merger and Bing certainly should consider doing something about it in the near future. Otherwise Google AdWords may simply take the lion’s share of Yahoo Search’s previous budget allocation.

Search Volume: Getting volume out of Bing is sometimes like pulling teeth.

Poorer User Interface: The user interface is not intuitive, nor is it user friendly. In fact, between the big three, it is quite possibly the worst user experience.

adCenter Desktop Tool: The tool does exist but a number of technical issues plague it thus often rendering it useless. This is incredibly frustrating as it becomes virtually impossible to work on large accounts without the possibility of doing bulk uploads. A Microsoft tool riddled with bugs… what a surprise!

Customer Service: Getting anything organized with Bing requires the utmost patience because turnaround times are incredibly long. If it is billing associated, don’t hold your breath.

Ad Sitelinks – Better for You or Google?

Posted on April 6, 2010 by Marta Turek

In late 2009, AdWords launched a new feature designed to ‘increase choice and relevancy in search ads’ by allowing you to provide additional links to deep content on your website.

If you are not yet familiar with sitelinks or you have seen it and wondered how to set up something similar in your AdWords campaign, the reason may lie in the fact that sitelinks is only available ‘for advertisers whose ads meet a certain high quality threshold.’ That is Google talk, in layman’s terms, if you are not spending enough money on your AdWords account, you shall not get access to sitelinks quite yet.

Here is an example of sitelinks in action, for the search phrase ‘hilton hotels’:

You can see the ad sitelinks in the top circled ad which happens to be the official Hilton website. Looking at the SERP result, the Hilton brand covers the most important page real estate with the paid search SERPs as well as the organic SERPs. Given the authority of the Hilton website, there are also organic sitelinks visible in the SERPs, which then bodes the question:

If the search is for a branded phrase, which indicates intent and knowledge of the Hilton brand and the organic SERPs are already strong, is it really necessary to spend more money on PPC sitelinks?

Warning: Proceed with Caution

Sitelinks may do wonders in increasing click-through rate (CTR) on branded and non-branded terms but is it capturing the right type of searcher?

Ad sitelinks will not be a panacea for all advertisers, so if you do implement this feature monitor and test carefully. You cannot simply switch on the ‘on’ button and leave it at that – if you do, you may see expenses increases without a direct correlation in sales increase.

Think about the following 3 factors when implementing site links:

Organic links vs. paid links – the reality is that these new paid search ad sitelinks so closely mimic organic results that searchers may not themselves recognise the difference. This may result in repeat visitors who are perhaps already customers or not in the market to buy, clicking on your paid sitelinks.

Beware of Tire kickers – suddenly you are giving searchers more options to click on your website. Even though this may have an initially positive impact in increasing your CTR, pay careful attention to your cost-per-acquisition. If this number starts to increase, you may have a problem on your hands.

How optimised are your pages – traditionally you have one landing page link in your paid search ad, now you can have up to four. Before you go crazy adding sitelinks to your paid search program, consider very carefully the pages to which you will be driving the searcher. Will they capture the attention of the searcher, do they have a clear path and some type of call-to-action or will these pages ultimately lead to a wasted click?

Your PPC Client Resisting Change?

Posted on March 18, 2010 by Marta Turek

It appears that there are still a number of people out there who implement a paid search campaign in AdWords and then once it is operating at an acceptable level proceed to switch their minds off and forget about it.

Once they have ascertained that the existing CTR is acceptable, CPC is not bad and conversion rates going well, depending on their relative definition of ‘well’, they become opposed to the idea of changing anything, to avoid disrupting this status quo. What this means is that ad copy goes through little revision, if ever, and landing pages, well, let’s just say landing pages are as new as the 90s.

In the game of paid search where incremental changing, testing and analysing are required elements to increase performance, this can be a major setback. How do you deal with a client who simply does not wish to send a ripple through calm waters?

1. Persevere & Educate – It is imperative that you show your client the value of testing in PPC. Present them with white papers, industry citations, case studies that discuss the importance and successes of A/B Testing, of both landing pages and ad copy.

2. PPC Success is Relative – Help your client understand that ‘good’ in paid search is relative. How do you know that your current ‘good’ conversion rate is the best it can possibly be? You don’t. For this simple reason you should at every opportunity push forward the performance of the account.

3. ‘Help me, Help you’ – Every client will have paid search goals that tie into bigger business goals. If the goal for the quarter is to grow or reduce customer acquisition cost, help them see how revised landing pages that obey best practices may be exactly the change required in order to reach those goals & KPIs.

4. Testing is Safe – With technology such as Google Web Optimizer, you do not have to forgo the current ‘good’ landing page. It is as simple as setting up a Google Optimizer test – the winner takes it all. If you see the new design blow the old landing page out of the water, the business case for changing the landing pages becomes a lot more compelling.

5. Make it Easy – Some clients are so busy that the notion of organising new landing pages is a task with which they simply do not wish to deal. If this is what is preventing the recommended changes from moving forward, try to present alternatives. Ask the client whether they would be open to outsourcing landing page designs rather than doing them internally. If this is compelling to them, put together a quote and take this task out of the client’s hands. You can then have more control over the design process and you remove the burden for your client.

Rushing into Paid Search

Posted on March 11, 2010 by Marta Turek

Rushing into PPC Sometimes clients launch into paid search advertising, leaving the decision making to the agency without fully understanding the strategy being implemented. They nod, agree and seem to ‘get it’ so you proceed with the project, implementing structures that have been agreed upon, setting up the appropriate reporting to report on business goals and KPIs, which the client has identified as important. The project starts to move forward and then 2 months later, the client drops the bomb and says:

The current paid search account structure does not fit our internal reporting model
We would like to modify the current goals, our CPA goals have become more aggressive – CPA target is now 50% lower
We wish to change our paid search online strategy, radically

Fools Rush In

The result of any of the above points can easily spell hundreds of hours of wasted work, particularly if it is a large PPC account that uses intricate campaign segmentation and geographic targeting.

This happened because at the start of the project the client just did not ‘get’ paid search. Nor did the client appreciate that PPC advertising goals tie in directly to structure, set up, design of campaigns & ad groups. The client will certainly not be able to grasp the number of wasted hours on a set up that they have practically declared null.

Get on the Same Page

A typical problem of launching projects is that once the client has paid some money upfront or a percentage of the costs, there is an expectation that things will get rolling right away. There is a pressure from the internal sales team to get the project going in order to develop a good business relationship with the client in those first 2 months of operation. This generally means everyone comes out guns blazing, both the agency and the client.

Strategies are discussed. Things are rushed. Tactics are implemented. The client tries to ‘get it’. But doesn’t. Two months later, after putting two and two together, the client demands radical change.

It is critical that at the start of the paid search project, the client is taken through a process of education. Just because a company has been running a PPC campaign for 2 years does not mean that the people now responsible for that campaign know the first thing about PPC.

A safe assumption is that the client knows very little about paid search and even if they think they know about PPC, remember that you are the professional being paid to implement the services. Ascertain, at the start of the project what the level of understanding is and proceed accordingly with the education required. Do not rush into a project because the Chief Marketing Officer is pressuring both you and his internal team to do so. At the end of the day, that internal team reports results to the CMO – those results will be much stronger in two months if you push back a bit, put your foot on the breaks and ease into the project, making critical strategic and tactical decisions only when it is clear that the client fully understands the implications of those decisions.

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