PPC Fundamentals Most Marketers Get Wrong

Pay-per-click advertising is a popular marketing tactic for many merchants. But according to George Michie, cofounder/CEO of online marketing consultancy The Rimm-Kaufman Group, there are five fundamentals of PPC that most marketers tend to get wrong.

In a session at the New England Mail Order Association conference in Boston, Michie outlined these PPC basics for attendees:

  • There is no “correct position” on the page: Conversion rates are the same regardless of position, as are sales dollars per click. While the volume of traffic is much higher at the top than it is at the bottom, so is the cost per click.

    The key to maximizing sales within an efficiency target is to set bids based on the anticipated value of the traffic. This is calculated from observed data on each ad, the data on similar ads, and anticipated seasonal and promotional effects.

  • Last-touch keyword results are a good proxy for the truth: There is a great deal of hoopla in the industry about buying cycles and many search marketers spend money wastefully on “top of the funnel” generic traffic on the grounds that it generates sales tracked to more specific keywords or trademark search.

    This turns out to be a very small effect. If it looks like a high traffic keyword is performing poorly – it is.

  • Budgeting search is a bad idea – using campaign budgets to limit spend is disastrous: Why spend less than you can profitably spend? Why spend more than you can profitably spend?

    Because the ROI is fast – indeed, it’s backwards! We get the revenue before we pay for the clicks! Budgeting doesn’t make sense. Aim for efficiency and spend as much or as little as the market will bear.

    But if you must do it, using campaign budgets is the wrong way to budget. Instead, lower bids to the point that you’re spending your budget week to week. That way you get more traffic and sales for the same money.

  • Ad copy matters, but don’t spend all your time on this: Improving click-through rates and quality score is important. Write targeted copy with compelling calls to action. Test the control against challengers. Then stop!

    Most PPC marketers spend 75% or more of their time on ad copy. After the initial testing, this should be no more than 5% or 10% of the work. There is far more money to be made by bidding, data analysis, and keyword additions than searching for magic ad copy.

  • There are no bad match-types: Employ a combination of broad match and exact match (same keyword on both match types). Bid 20% to 40% more on the exact matched version than the broad match: Exact matched traffic will convert better and is therefore worth more.

    Road matched traffic is still valuable, just not as valuable. Using negatives smartly on the broad matched campaigns and damping down the broad matched bids will add sales volumes cost effectively.

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