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5 Pay Per Click Advertising Principles Every Business Should Know

For the unfamiliar, Pay Per Click Advertising (point to Services URL on Method Savvy) can be a strange discipline. Part art, part science, PPC is a nuanced marketing activity that if executed correct can generate a significant amount of website traffic, new leads and sales. However if your company doesn’t have experience with PPC, or even worse has had a bad PPC experience, Pay Per Click Advertising can seem like a waste of time and a colossal waste of money.

On the surface PPC providers make it way too easy to over spend on advertising. Which is unfortunate, because a well-run PPC program can be a terrific source of pre-qualified prospect traffic and sales leads. While there’s no arguing that PPC is a deep and sometimes complex discipline, if you know the following 5 principles you’ll be well on the way to better utilizing Pay Per Click Advertising as an effective part of your integrated marketing mix.

Site notes:

1. I admit that those of you with more extensive PPC experience may have a different perspective of the principles outlined below. But that’s OK, and I encourage you to use the comments section to share your thoughts. I’d love to hear your points of view and I’ll even update this post to include the best recommendations.

2. For the purposes of keeping this post simple, I’m focused on Google AdWords, Facebook and other popular PPC platforms. There are many good ones out there, but covering them all would make for one very long blog post.

1. Relevancy Is Rewarded

All advertising is about making and delivering on promises that are relevant to your target audience. If you’re advertising meat to vegetarians you’re spamming and unthoughtful, but if you’re advertising strollers to new parents you’re being a smart marketer.

Most modern PPC providers (e.g. Google AdWords, Bing, Facebook, LinkedIn, etc.) reward advertisers who run ads that are relevant to the target audience with lower costs. The calculation differs between providers, but in general terms if your ads have a high Click Through Rate (e.g. better performance) not only will the PPC providers charge you less per click but they’ll show your ads more often.

Takeaway: Focus on making your advertisements as relevant and targeted to your audience as possible. You’ll not only lower costs but will get more traffic because of it.

2. On Google AdWords, Split Your Search & Display Advertising Campaigns

Without getting overly in the weeds, and as an example, on Google’s AdWords (http://adwords.google.com) platform you have a wide range of options for advertising. You can run text ads, banner ads, animated banner ads, video ads and more across different “advertising networks.” The two major ad networks are Search and Display.

Search allows you to run text ads on Google’s flagship Google.com search engine as well as with their search partners. The Display Network allows you to run text and banner ads on websites that Google has partnerships with. When you set up the PPC campaign in AdWords you have the option to select the “Networks and Devices” your ads will appear on. Repeat after me: only choose one – Google Search or the Display Network.

Why? There’s a variety of reasons including:

  • What resonates with users on Search is often different from what resonates on the Display Network.
  • Splitting up the networks gives you more granular control over your daily budget spends.
  • Targeting parameters differ greatly between the two. Search is keyword and intent driven, whereas Display is contextual.

Takeaway: Do yourself and your wallet a favor. Split your Search Network and Display Network advertising into separate campaigns.

3. Experiment and Test… Repeatedly

The beautiful thing about Pay Per Click Advertising is that, well, you only pay when someone actually clicks on your ad. So there’s little downside to experimenting with a different headlines, ad copy, images or even audience targeting. Worst that happens is that you don’t get the performance (in terms of number of clicks and click through rate) as you were expecting, learn some good lessons and you can move on to the next test.

I could write a book about what goes into a proper testing strategy, but to try and boil it down to a simple explanation:

  • Its easiest to only test one element at a time. For instance, does Headline A work better than Headline B.
  • Set up your test to have a “control” variable – that is a constant and unchanged version of the ad, say the original you had running previously – and a “variant” – that is a different version of the ad that has one element changed, like the Headline.
  • Don’t pull the plug on a test too quickly. You need to have a statistically relevant sample size (e.g. a large enough number of people to see both ads) in order to know if one truly performs better than another. Otherwise you may end up selecting the wrong version as the winner. A good, quick explanation of how to calculate Statistical Significance is available on Occam’s Razor (http://www.kaushik.net/avinash/excellent-analytics-tip1-statistical-significance/)

Takeaway: Iterative experimentation allows you to quickly learn what works and what doesn’t so that you can spend more resources on the marketing and advertising that is effective.

4. Group Your Ads For Better Results

One trick to improve relevancy, increase your click through rate and lower your cost per click is to use Ad Groups to better segment your target audience. For instance, on Google AdWords, if you’re running a Search Network campaign strive to use ad groups to increase keyword relevancy of your ads. What I mean is that Search is an intent-driven experience for users. If someone searches for “Bike Stores” you can be reasonably sure that they’re interested in stores that sell bikes in their area. So if your ad talks about your bike store (note the keyword usage) and why your store is great then you’ve just increased your likelihood of getting a click.

Similarly, if a user searches for “bike shops” or “bicycle stores” your ad is likely still relevant to them. So you can include those in the ad group. However if the user searches for “bike repairs” then their search is showing their interest in a more specific subject and you will likely get a better result by running an ad for Bike Repairs to the user.

Takeaway: Group together your ads in order to further improve audience relevancy and ad performance

5. Conversions Are More Important Than Clicks

The goal of a Pay Per Click Advertising program is never really to generate more clicks. Its about getting more conversions – whether you define that as sales leads, purchases, email list signups or something else altogether.

With this in mind, its critical that you set up your analytics systems in order to properly track conversion. If you’re using Google Analytics this can be done by using tracking codes (http://www.google.com/support/analytics/bin/answer.py?answer=55578) or setting up conversion tracking (http://www.google.com/support/googleanalytics/bin/answer.py?answer=55535). However your analytics system may require a different set up. Regardless, in order to truly measure the effectiveness and value of a PPC campaign you need to understand how it’s impacting the bottom-line.

Takeaway: By focusing on conversions you can best understand how the PPC campaign impacts your bottom line.

 

Posted in Business, Marketing, Pay Per Click