How Hard Should You Press The Gas Pedal In #Paid #Search?

The following post contains a number of metaphors strained to the breaking point; viewer discretion is advised.

An enduring truth in the paid search business is that paid search managers and marketing teams spend far more time thinking about tactical minutia than they do thinking about what are far and away the most important questions to the business:

“What is the ultimate objective of paid search for our company? And how do we measure success against that goal?”

If the goals and measurement have been thoroughly fleshed out, considered and analyzed, then it makes sense that attention be focused on the “how to” questions — but often, it seems that applying scrutiny to the goals themselves leads to changed success metrics that have far more impact on performance than any number of geeky tactical maneuvers.

Every company can articulate their goals, but sometimes scratching deeper reveals shaky rationale supporting them.

For companies that budget search spend, marketers need to ask:

• “Who determines the budget and what criteria do they use?”
• “Are these criteria the same or different than those used to determine the budgets of other marketing programs online and off?”
• “At that budget, do you expect a profitable ROI? Breakeven? Investment for long term growth? Brand exposure?”
• “Does the budget rise and fall with market opportunity or is it rigid quarter-to-quarter?”
• “How do you measure and think about the “R” in ROI?”

For companies that set efficiency targets for non-brand search and allow the advertising spend to rise and fall with opportunity, a different set of questions should follow:

• “Great! What’s the basis of that ROI constraint?”
• “How does that ROI relate to business profits? Screamingly profitable? Breakeven? Investment?”
• “How does the marginal ROI compare to your average ROI?”
• “Does your “R” factor in all relevant success metrics like cross-device, offline spillover, registries, email sign ups, catalog requests, etc.?”
• “Over what time frame do you think about getting the return: the first interaction with a customer, or is some notion of lifetime-value folded in?”

Much of this boils down to how aggressively a company can drive marketing without wrecking.
Google recently launched an initiative to help advertisers think more carefully about performance marketing objectives and asked me to do some evangelizing with them.

Maximizing Profit Vs. ROI

 Nicholas says that “the best way to increase profits from your digital marketing investments is to make profits your main KPI. It seems self-evident, but very few advertisers are actually doing this.”
His point is that too often companies take as their goal maximizing ROI — a ratio — rather than maximizing profit — which is what you put in the bank at the end of the month. Increasing bids may decrease ROI as a ratio, but may drive enough additional volume to more than make up the difference.

He is right, of course. Picking only the lowest hanging fruit yields great per-piece profitability, but not much total profit. If the goal is profit maximization, then the proper approach is to first pick the lowest hanging fruit (of course) but to also pick the fruit higher up the tree as long as the value of the fruit picked is greater than the time/cost of picking it.

Let’s look at the math of diminishing marginal returns and we’ll see this clearly. As spend levels increase, efficiency inevitably decreases because we buy wisely, grabbing the most efficient opportunities first leaving less-efficient opportunities left over to choose next.

Threshold 1 on the graph represents Observed ROI Maximization. Threshold 2 represents Observed Profitability Maximization. Threshold 3 represents Return Maximization at Breakeven Profits, and Threshold 4 Represents Return Maximization at Some Investment.

Putting The Pedal To The Metal

To switch metaphors, just for fun, Nicholas sees some advertisers putting the car in drive but hardly putting any pressure on the gas pedal. They’re content to idle forward and “save money” on gas, but they don’t see the opportunity-loss associated with going so slowly.

He advocates for moving from 1 to 2:

Moving from ROI ratio maximization to short term profit maximization is an unmistakable, indeed unquestionable win.

However, many advertisers already go well beyond that. Most of our clients spend at least to observed breakeven (position 3 on the graph) on non-brand search.

The marginal ROI (slope) is negative moving from 2 to 3, but the loss is justified on the grounds that the portfolio comes in at breakeven. This allows the company to generate the maximum observed return from search at a breakeven investment overall.

But how do marketers justify going beyond position 3? At that point, not only is each conversion coming at a loss on the margin, but the collective whole is underwater, as well.

How can that ever make sense? To many smart marketers it does, and the reasons for that perspective involve some combination of the following arguments:

• We don’t see all the conversions driven by paid search. There are cross-device effects, there is spillover to brick and mortar, people drop cookies reducing the observable conversions. Factoring in this hidden value makes the additional investment wise.
• The graph above only accounts for short-term ROI. The lifetime value of the consumers engaged is more than enough to justify additional investment.
• Growing the customer base is valuable in and of itself. It leads to more customers to market to via email, direct mail, re-marketing display ads, social media, etc. This increases the natural lifetime value of a customer.
• Growth gives additional clout with vendors. Volume discounts and co-op marketing dollars go to the companies that sell more product. Publishers can charge more for advertising on site. Insurance companies can spread risk over a larger base. Bigger is better.
• Broader awareness creates more buzz, more PR, more word-of-mouth marketing, more in-bound links and social mentions. One of the most under-appreciated components of customer lifetime value is the propensity of happy customers to spread the word to their friends, which is vastly more powerful given the connective tissue of social media, Pinterest boards, etc.
• There is brand value to prominence on the SERP, and visits to website and apps. Engagement and awareness has value even if hard to measure.
• The media buyers get to spend like drunken sailors, I should be able to, as well!

Okay, I haven’t heard anyone use the last argument explicitly, but they’ve kinda hinted at it, and vastly different ROI expectations between marketing channels is a bit hard to understand.

How Far Should You Go?

Nicholas at Google is certainly right that pushing from 1 to 2 is certain to be rational. Whether moving from 2 to 3 or even into 4 makes sense may depend on the shape of the curve.

If the marginal ROI drops like a rock, it could be that the channel is effectively maxed out, either because you’re at the top of everything that matters to your brand, or your competitors are being so much more aggressive it doesn’t make sense to chase them.

However, if bidding more aggressively generates material incremental returns, consider the extent to which the arguments for 4 apply to your brand. What’s the lifetime value of a customer for you? How significant could untracked spillover be? What is the Word-of-Mouth value of a customer?

To this last point — if the answer is, “I have no idea,” consider doing this down and dirty analysis:

1. Do a survey of 100 random converting new customers on your website who reached the site through a brand search or direct navigation and who had no prior interaction with other marketing channels as best you can tell.
2. Ask them: “Why did you come to our site that day?”
3. Tally up the fraction of these new customers who say something like ‘a friend/relative suggested I go to your site.’ Call that X. You might be startled at how large X is.
4. What fraction of all customers are new customers coming in via brand search or direct load? Call that Y.
5. Multiply X and Y and call that Z. Might Z represent the number of additional customers brought in by WOM of other customers? Would that materially increase the direct lifetime value a customer?

Hacky, yes — but sometime hacks are valuable enlightenment.

Whether 2 is right for you, or something more like 3 or 4, will depend on many factors. Ultimately, more aggressive advertising, into the world of untraceable effects, needs to result in a healthier P & L. If it doesn’t, maybe easing off the pedal is right.

Hope this is helpful fodder for discussion.

Drive carefully.

Stock image used with permission of Shutterstock.com

13 Reasons Branded PPC Campaigns Are Beneficial For B2B Brands

Branded PPC campaigns are a difficult concept to swallow for many marketers. Why would someone pay for a branded term they already (and will always) rank first for in organic search?
In the B2B world, paying for terms surrounding your brand can yield numerous benefits. Here are the top 13 reasons you should consider building a branded campaign for your B2B brand.

1. Domination In SERPs

Having multiple listings on one search engine results page (SERP) is a way to deliver a wider range of brand messaging to searchers. It also creates more opportunities for searchers to click through to your website.

By appearing in both organic and paid listings, you will be the prominent player in your space. Paying for keyword listings is also the only way you can guarantee yourself that first spot.

2. Control Your Brand Messaging

One of the downfalls of organic listings is that certain guidelines need to be followed to keep in best practices with current SEO trends. Since keyword targeting is a must for organic listings, you are limited in how you can deliver your brand messaging.

With paid search, you can craft your brand messaging to grab the attention of searchers and drive them to your site.

3. Fight Against Competitor Bids On Branded Terms

An effective PPC tactic that has been used for a while now has been bidding on competitor branded terms.

If a competitor is bidding on your branded terms, the best way to fight back is to bump them down a peg by buying your own branded terms. After all, your bids will be much lower and quality scores much higher, whereas competitors have to shell out a lot of dough to compete for your terms.

4. Branded Terms Are Cheap

Some of the cheapest keywords you’ll ever bid on are those of your own brand. Bidding on your own brand usually costs pennies per click. These dirt-cheap clicks will also generate high click-through rates (CTRs) and quality scores.

5. Build Account Equity

Aside from being cheap, having high CTRs and earning high quality scores, this level of performance will also help build account equity.

Although account history doesn’t directly affect ongoing quality score, it has long been speculated that maintaining an account over time that follows best practices, gets good quality scores and achieves high CTRs does have an effect on the success of your future campaigns.

(A few things I have noticed that may be related to account history are keywords starting out with higher or lower quality scores, and quicker approval on ads.)

6. Accelerate Buying Decisions From Current Prospects

Users searching for your brand already have some level of familiarity with your brand and products, whether it’s from a colleague, tradeshow, direct mailing piece or other channel. These users may be anywhere from the beginning to the end of the sales cycle.

By bidding on branded terms, you have the ability to send these prospects to a landing page to get your company messaging, thought leadership material and other assets in front of them to move them further down the sales cycle. An organic listing just sends them to your site, with little control of what content you want to put in front of them.

7. Paid Traffic Can Convert More Effectively Than Earned Traffic

PPC landing pages are usually optimized to drive users to complete a conversion action. Because of this, conversion rates tend to be higher on these landing pages than on regular website pages.

As mentioned in my previous point, people who click on ads for branded terms are already in the sales cycle, and well-optimized PPC landing pages can accelerate that buying decision.

8. Competing In SERPs With Affiliates & Distributors

One of the biggest challenges in search for B2B marketers is having to compete with your own affiliates and distributors.

Your affiliates and distributors want to use your brand equity to their advantage, so they will often bid on your branded terms — especially for product-related branded terms.

If your sales culture has a strong interest in making sales in-house instead of relying on distributors, creating a branded campaign is imperative.

9. Test Out New Brand Messaging

If you plan on creating advertisements and other collateral to promote through other channels, branded PPC campaigns offer a cost-effective way to test new brand messaging.

For pennies per click, you’ll be able to determine if a new brand message is effective before spending thousands of dollars blindly sending it out through other marketing channels.

10. Promote New Products Or Services

Every time a new product or service is created, you have to add new content on your site, create collateral and thought leadership, and use multiple marketing channels to promote the materials. It takes a while to gain momentum through those channels. Ranking in organic search for keywords around the new product or service may take anywhere from several weeks to several months.
Paid search offers an opportunity to rank first in search immediately for both branded and non-branded terms around the new product.

11. User Attention Is Drawn To Ads

Google likes to make money, and AdWords is one of their primary drivers of revenue. With that in mind, they are constantly testing new ways to make ads appear in SERPs.

Example of a branded SERP with both paid and earned listings.

In the past, they have highlighted the ads with a yellow, blue and pink background color to make them stand out above organic listings. Their latest tactic seems to be making them blend in with organic listings. Either way, Google will constantly be testing new designs to drive more ad clicks, because that’s how they make their money.

12. Damage Control

Let’s hope this is never necessary, but if your company makes a big “oops” and becomes the target of negative press coverage, a branded PPC campaign is one solution to push that negative press down the SERPs.

Looking at the example below, you can see that Feedly, a company that recently became the target of a cyber attack and does not currently run a branded PPC campaign, is dominated in SERPs with negative press. This negative press has taken the top position in the SERP, and includes attention-grabbing elements like the thumbnail, timestamps and border.

Example of negative press effecting brand image in search

13. Retaining Traffic After A Search Engine Penalty

One of the most devastating things that can happen to your brand in digital marketing channels is the inability to appear for your own branded terms as a result of a penalty from search engines. Recovering from a manual or algorithmic penalty can take several months before rankings are restored.

A branded and non-branded PPC campaign is one solution to retain search traffic until you recover from the penalty.

 (Stock image via Shutterstock.com. Used under license.)

How Content Quality Analysis Works With SEO

What Is Co-Occurrence Analysis?

In the world of keywords, this refers to an analysis of what words appear most commonly on a page. Imagine you create a page on women’s shoes. You can then analyze the content on the page to see what words are most common. For example, the results of the analysis for your page might look like this table here:

The “Occurrences” column tabulates the number of times the “Word” listed in the column to the left of it appears on the page.

Notice how you don’t see any instances of words like “the,” “and,” and “it” in the list. These are examples of what we call “stop words.” Usually, these words are not of value to this kind of analysis since they are in most cases ignored by search engines.

There are rare exceptions, such as with proper names like “The Office” (a TV show) and “The Home Depot” (the full proper name of this company), but it is not a factor in this analysis.

The Searchmetrics Study

As a next step, you can do this same analysis across all of the pages in the top 10 or more search results for a given search query to see what types of words people use. Searchmetrics did something similar to this in their recent study. In fact, they looked at 15,000 queries involving more than 350,000 URLs. Let’s look at the results of the test:

The Y-axis shows a score for the usage of the relevant keywords. The X-axis shows the ranking position in search engine results pages (SERPs), ranging from position 1 to position 30.
Remember, this has been run across 15,000 different SERPs. Based on this, you see a strong correlation between higher usage of the relevant terms and ranking position. The 0.34 score indicates a strong correlation.

Are We Really Back To Keyword Density?

No, not at all. This is quite different. This is not about one single phrase being repeated over and over again on the web page. It is much more sophisticated than all of that.

In the past days of search engines, this type of analysis was done in a very simplistic way. Simple repetition of a single keyword phrase over and over again was all that was required to get a page to rank highly for something. This led to lots of keyword stuffing by spammers.
Here is a partial snapshot extracted from Searchmetrics Content Optimization tools that shows the kinds of words found in a co-occurrence analysis:

You can see words like “view” and “sale” in this partial screen shot, and if you look at the rest of the report (not shown here) you see other words such as “price,” “cart” and “shipping.” If an e-commerce page does not have such words, then it might lower the chances that the page being analyzed is actually a place where you can buy women’s shoes.

Pages that have an unnatural mix of words may be detected using this type of analysis and judged to be of lower quality or relevance. Searchmetrics also tested the correlation of keyword relevance in 2013, and it looked like a factor in that test as well, but not quite as strongly as it did in this 2014 test.
A search engine will probably do this at a much more sophisticated level than shown here. Below are a few things they might do differently:

1. Extend it to look at certain key phrases.
2. Lower a page’s quality and relevance scores if it does not include a reasonable mix of synonyms. This would be one method for distinguishing pages that are written in bulk or machine-generated.
3. Look at the anchor text in incoming links and include them in the analysis. A similar analysis could be used to determine poor anchor text mix to a web page. Most web pages may not have enough links for this type of analysis, but the home page of many sites might.
4. Too high a mix of “the right words or phrases” could also be judged as a problem.
5. This type of analysis could be solidified even further by picking out a hand-curated set of trusted seed sites. Since we know they are quality sites, they can be given more weight in the analysis to reduce the chances of bad results.

What Does This Mean?

The goal of the search engines is to recognize well-designed web pages that offer a high-quality user experience. That should be your first goal, as well. However, this is a difficult art form to learn, so expect to invest some time in getting it right. Start by recruiting really talented writers to create content that fits the user intention.

Then study the sites that rank well for the terms of interest to you. Go study their approach and learn from what they are doing. You can learn about page structure, key elements to include on the page, and an approach to providing a user experience that works.

Searchmetrics can do this automatically for your keywords and delivers a report of terms and phrases that should definitely be used and phrases that are highly relevant for your topic. And if you can, take advantage of user testing services.

You can try a service like Usertesting.com, or just ask some people you know to take an impartial look at your pages and critique them. The most important lesson from this is that you need to be very holistic in your approach to putting content on your pages and create the best possible experience there. This will be an investment of time, but it will help you both with conversion and user satisfaction.

We can’t say with any certainty that it’s an SEO ranking factor, but the Searchmetrics data shows a very strong correlation between this type of thinking and higher rankings, and that’s good enough for me to know it’s important, regardless of whether or not it’s a ranking factor or not!