Everyone is doing paid search. How do I know? In their quarterly earnings report this week, Google showed a 17% increase to income and beat revenue forecasts by 3% ($6.5B vs. $6.3B net rev). Paid search clicks alone grew by 18% (analysts estimated 16%) in Q1 compared with the same period a year ago! Paid search, 65% dominated by Google, continues to gain adopters and share of marketing dollars. Revenue comes from advertisers, Google is paid for each ad click, and growth to both numbers simply means more and more folks are running paid search campaigns.
Everyone else is spending money on PPC… so where do you start?
This is the first in a three-part strategy series that will outline what it takes to spend marketing dollars intelligently on your Pay Per Click (PPC) channel. In preparing for this series, I sought out the business acumen of successful entrepreneurs (both real and fictional) and chose to follow Tony Montana’s infamous and proven three-step approach:
Step 1. First you get the money – Tony Montana spent his way to building the right network and to finding his target audience. The same rule applies to PPC marketing: spend, learn, refine.
Step 2. Then you get the power – Be empowered by the data acquired in Step 1 and scale your online marketing strategy.
Step 3. Then you get the… customers – Customer acquisition is the name of the game. Here’s how to stay ahead of your competitors to ensure you keep attracting new customers.
Before we start, let’s go over a short glossary of commonly used terms in online marketing:
PPC – Pay-per-click marketing, also known as “paid search” marketing – an advertising channel on search engines where businesses/individuals may bid on keywords used in searches
SEM – Search Engine Marketing, commonly used to describe both PPC and SEO but also often used synonymously with PPC marketing
SEO – Search Engine Optimization – the practice of “optimizing” website pages
1. First You Get The Money
Customer acquisition costs money. Whether you write a check for a billboard, pay for a radio spot or invest in online marketing, advertising costs money. The good news is, PPC marketing is one of THE most accountable and measurable forms of marketing. So start spending. Create a budget you’re comfortable with, spend money to buy test traffic and take copious notes on what works and what doesn’t for your business.
Tip: Don’t count on immediate financial success from your initial PPC test. Consider your test buy as a necessary education cost and remember that early learnings will pay dividends in the future.
Acquiring a customer on a major search engine (Google, Bing, Yahoo) typically follows these steps:
- Consumer searches on Google/Bing/Yahoo and sees search results with ads
- Consumer clicks on ad
- Consumer sees your site. Consumer decides in seconds (or less) if the click was worthwhile and if he/she should stick around
Let’s break this down further.
A. Consumer searches on Google/Bing/Yahoo and sees search results with ads
How? Cast a net of keywords and phrases, aka “keyword research”. The size of the net is entirely up to you.
We’ll use two fictional golf equipment businesses to illustrate points A through C.
The first golf business specializes in men’s left handed golf clubs. As the owner of this business, you wouldn’t want to cast too wide of a net and attract unqualified customers looking for other types of golf equipment. If this is you, start with a small list of keywords and phrases that only attract your customer.
Sample keywords may include:
- Left handed golf clubs
- Men’s left handed golf clubs
- Left hand golf clubs
- Men’s left hand golf clubs
- Lefty golf clubs
Conversely, if you are Mr. Pro Golf Shop with an online golf shop that sells everything from kid’s golf socks to senior flex wedges, you’ll need to be more strategic about generating a broader list of keywords and phrases.
Should you generate keywords based on every piece of equipment you sell?
Absolutely not! Start with top-selling and high-margin items. Top sellers won’t have trouble generating search traffic volume and should provide results quickly. High margin items will allow you to run longer tests while enabling you to recoup your advertising dollars once sales are made.
Sample keywords may include:
- Callaway irons
- Beginner golf clubs
- Senior flex wedges
Goal: In either scenario, your primary objective is to find keywords that will drive qualified traffic with the highest potential to generate conversions (sales, sign ups, etc) to your site.
B. Consumer clicks on ad
How? Hook consumers in with your ad copy, aka “ad testing and optimization”. How attractive you make your ad is (again) entirely up to you.
Using the same golf example as above, if your goal is to mainly attract consumers looking for men’s left handed golf clubs, make your ad very specific and unclickable to everyone but your target consumer.
Tip: Always start with more than one version of your ad. The risk of running only one ad is that the success or failure of your entire Paid Search test rests on one single ad.
If you are Mr. Golf Pro Shop, you want ads that appeal to the masses and your ads may look like the following:
A common mistake made by many new PPC marketers is to disregard the keyword-ad relationship. If your list of keywords is specific and thematic, make sure that is also communicated in your ad copy.
Goal: Always be qualifying. The objective is to spend money intelligently, and given that you’re paying for each ad click, make sure your ads attract users most likely to convert on your site.
C. Consumer sees your site. Consumer decides in seconds (or less) if the click was worthwhile and if he/she should stick around.
You invited the potential customer to click on your ad and visit your online store. Do you have control over what happens next? Yes, but not until the consumer has left your site. What matters most is what happened between the time he/she clicked on your ad to the time his/her exit took place.
- Consumer searches for the phrase “left handed golf clubs” in Google/Bing/Yahoo
- Consumer sees your ad (in position #1) for “Left Handed Golf Club!” and clicks
- Consumer should see a landing page that shows a selection of… yes, left handed golf clubs. Anything else (like the home page of your site, a sign up page, etc.) may cause the user to immediately “bounce”.
Let’s go over three varying examples of landing page user experiences:
Bad: consumer immediately hits the back button or closes the window/tab. This is what search engines consider a “bounce”. The signal here is that the content on the page which the consumer first saw (also called the “landing page”) was not relevant to what they initially searched for on the search engine.
The landing page from the #1 ad is shown below. I expected to see left handed golf clubs, but instead, I am given options of categories that do not include any left handed golf clubs. BOUNCE.
Good: consumer stays on your site and browses around with a relatively good “pageviews per visit” or “time on site”. The signal here is that the content on the landing page was relevant enough to keep the consumer interested for a few more clicks and/or a few more seconds/minutes of browsing.
The landing page from ad #2 is shown below. Again, I expected to see left handed golf clubs, and yet again, I was shown a page full of content not directly relevant to my search term. The only reason I would let this slide as a “good” experience is because it presents three major brands (along with a deal) on the landing page, which may convince me to invest a few more clicks to find what I’m looking for.
Great: consumer completes a desired transaction (purchase, sign up, download, etc.), which is called a “conversion”. The signal here is that you provided the consumer with exactly what he/she was expecting to see when he/she clicked on your ad.
The landing page from ad #3 is shown below. Finally, a page that with content relevant to my original search!
Goal: Provide a high-quality and relevant user experience on your landing page. Don’t expect the user to navigate through ANY additional pages to find what they’re looking for. It is far too easy to hit the back button.
Conclusion: Get the money, spend the money
Paid per click marketing is not about blindly paying Google to drive clicks to your site. It is about knowing how much to pay for each click and understanding which type of consumer you ought to be paying to attract. It is also about listening to signals provided by clicks that result in both bounces AND your desired conversion goals to make the necessary changes to your keyword lists, ads and landing pages.
Everyone might be doing paid search, but very few do it well. Per Google, the average Adwords click through rate is 2%, meaning only two clicks occur for every one hundred ad impressions. Don’t expect immediate success from your test but expect to walk away with education. The single most important goal in this first step is to find the formula of keywords, ads and user experience that works for your business.
- Test – Invest time into generating a list of keywords and ad variations
- Learn – Test, stop, measure signals from your consumers
- Refine – Modify what doesn’t work, repeat steps 1 & 2
Stay tuned for Part 2 on how to “get the power”.
How KISSmetrics Can Help
About The Author: Jacob Shin is the Director of Online Marketing & Customer Acquisition at Savings.com where he focuses on high volume paid search strategy and conversion optimization for US and UK based traffic. Connect with Jacob.