Over the years of joining new companies and talking to new clients I have been amazed about the level of expectations that is had of Paid Search. Right in the middle of some chats – I’ve had moments of “wait, I think we need to take a few steps back and educate these guys on what will actually make Paid Search work for this business!”.
Sure - they know that PPC is about driving quality clicks to their websites and that there needs to be a high relevancy between the keywords, ad copy & landing page – but to ensure you get the most efficient CPA and highest conversion rates there are several factors that need to be understood.
1. More money doesn’t always equal more revenue
It is true that Paid Search doesn’t come cheap. In most companies you find Paid Search spend to be about 50-60% of total marketing budget. But there is a points of diminishing return with all paid search activity. Once the Paid Search spend reaches a certain % spend, by spending more, all you will be doing is inflating CPCs and increasing your CPA without getting much back in return. What needs to be done at this stage is find new areas of opportunity or divert the spend to another channel that has the opportunity of increased spend.
2. It doesn’t work in a silo
Following on from knowing what percentage of budget that should be going towards Paid search, in the best Paid Search activities I’ve helped run, the rest of our budget is always being put towards other channels that complement the Paid Search activity. Customers searching for your products are either in the top, middle or bottom funnel stage of purchase and you have to ensure that you have channels serving your customers at each stage of the funnel for maximum customer conversion rate. Paid Search doesn’t necessarily work for all stages
3. It can’t create demand
Another important thing to remember that Paid Search doesn’t do is create demand. Paid search is mostly not the channel to use at the first stage of introducing a product to your consumers. You have to create demand through outdoor campaigns or digital campaigns. Paid Search uses what I like call a pull strategy. As in consumers need to already feel like they have a need for you and want to pull you to them by searching for your products – which you satisfy with your ads and products on their site. But the push strategy needs to come first where you have told them of the opportunity you have to offer them if the search for your product.
4. It is competitive
Why do CPCs spike higher than what we’ve set it to? Because there are new competitors coming into the space every day. When a product starts increasing in demand new businesses that want to enter the market space, no matter how new/unknown, by entering the space will affect what Google starts charging you. Sure, we never want to actually hit our Max CPCs, but that upper range can be reached and the more competitive the market space becomes the more likely that high CPC is reached. Competition is also something that changes seasonally – so knowing when your consumers come in and out of the market makes it easier to be more prepared as to when CPCs will go up and knowing how to explain it to your marketing director or client.
5. Assuming that showing in organic search results means you don’t need to bid on keywords
Now one may think that if after months of hard work ensuring that your SEO ads are showing for your key terms that you should stop paying for Paid Search – well you COULD be wrong. Yes – it isn’t a clear cut it is or it is not needed. At this point testing is important. In some cases, you will find that you don’t lose revenue by not bidding, but sometimes you do. A key component of ensuring you are getting the best out of Paid Search campaigns is testing. Testing is what makes sure your consumers don’t suffer from ad copy fatigue, knowing how low a bid you can go without losing your desired position or whether having a double SEO and PPC integrated strategy works towards extra revenue. Building your Paid Search campaign is only just one part of gaining revenue through your website – testing is what ensures growth.
There are probably other factors not mentioned here – but ensuring your clients know at least these five - to make sure that the Paid Search account will keep going further once you’ve build it, will make for much easier conversations towards asking for more budget, saying no to budget, getting insight to other channels to ensure integrated strategy and a less panicked client when those CPCs start to spike. Now doesn’t that sound like the sweet relationship we all wish for?