by Beth Morgan, VP of Operations
During the Web 1.0 boom it was all about the eyeballs. Content was king, and publishers scrambled to fill the Web with information and amusement that would lure people in. Now that we’re seeing the second rise of the Web, content is still king. But it turns out that, as has been common all throughout history, people are less interested in what someone else tells them than in what they and their friends are thinking and doing. Giving people the power to produce their own content and customize their own experiences, essentially democratizing the Web, has brought over 100 million new users to the Internet in the U.S. alone.
Which brings us to the most uniquely people-powered advertising vehicle the world has ever seen: paid search.
Pay-per-click is different from every other mode of advertising out there because the publisher only makes money if someone finds the ad relevant and interesting and clicks on it. The amount that the advertiser bids for each click does figure in to how often an ad runs and where it is placed, but an even bigger factor is how tempting and clickable an ad is. The people are in control! If you as an advertiser fail to interest your target market, they will not click on your ad—and even if you’re willing to pay a small ransom on every click, the engines might choose to not run it all.
So what does this mean for advertisers? Essentially it means that you must re-adjust the way you strategically think about your paid search campaigns, because things you’ve learned about how marketing works might not be true for search. Some examples:
1) Your ad might not appear when you look for it. With traditional pay-per-eyeball advertising—TV, print, banner ads, etc—you agree to pay a set amount to advertise at pre-determined times and places for a set length of time. If you pick up a magazine or look at a website during that time frame, you will see your ad.
With paid search, though, the engines are unlikely to run your ad with every search, especially when you first launch a campaign. They are constantly running their mix of advertisers through a massive algorithm to determine, essentially, who earns them the most money. Proven advertisers are going to be given more credit than new ones.
They’ll mix your terms in slowly, and then more and more if your ads are successful.
2) You might not WANT your ad to show up every time you look for it. Think about it: are you running ads because you want people to see your neat-o copy, or because you want to sell stuff in a cost-efficient manner? Paid search gives you great real-time data about how your ads are performing, which allows you to get rid of keywords that just aren’t working for you. You may think a certain keyword is absolutely vital to your business, but if those Empowered People don’t agree and don’t click on your ad, the price that Google charges you to keep your keyword in a high position may be more than it’s worth.
3) Decide ahead of time what you’re willing to pay. Budgeting for traditional marketing is easy: you get X dollars to spend, you buy X dollars worth of placements, and then you look at the stats to see if it was cost-effective. Costs in paid search, though, are both variable and hard to estimate ahead of time. You could have $100,000 set aside for search, but if no one searches your terms or clicks your ads, you might end up spending only $2,000. Google can project approximate cost per clicks before you actually launch your campaign. Use this figure with your average conversion rate to project a cost per action (CPA). Does this number comply with your marginal profit and loss expectations? Realize throughout this process that projections in a market-based environment are imprecise.
4) Write the best ad for each of your market spaces. If people are clicking on your ad, you’re hitting the right market. Because pay-per-eyeball advertising is so expensive, it is vital to examine where and when ads are running to find the places and the times that yield the best results. Day-parting is a savvy way to make sure your ads are hitting your target when they are present and paying attention.
With paid search, though, people declare themselves as potential customers not by visiting a website or listening to a radio program, but by actively searching for a term relating to your product. If they’re really interested they’ll click on your ad and visit your site. This means that unless you have conversion data that shows visitors convert differently at different times of the day (which might very well be true), day parting isn’t a vital part of search strategy. You think your customers don’t wake up before 9am? Then they won’t be searching and clicking before 9am. Once again, the people decide when your ads run.
5) Rigorous and regular ad copy testing MUST be a part of your program. When I was traveling through Europe in college, my group would frequently be met at train stations by hordes of people from competing hostels, waving brochures and pictures to try to lure us back to their establishments. Paid search is pretty much just like that. At the very moment a searcher declares their interest in something, they are met with dozens of contenders clamoring to satisfy that need. Since Google and Yahoo both give better placement (and often a lower price) to ads that get more clicks, it behooves every advertiser to experiment to find out what will work best. Headline, call to action, benefits statement, even display URL—the smallest things can have a big effect. You also want to track results right through to conversion—ads that produce big clicks don’t always convert the best, and that’s the ultimate goal.
So as you can see, with paid search your potential customer is in a unique position to determine when and where your ad runs and even how much it costs. It’s a dynamic and powerful system, but also far less predictable than other forms of advertising. Figure out how to please your customer better than the competitors, and you will be rewarded with a brilliantly cost-effective marketing channel.