Top Paid Search Mistakes—And How to Avoid Them
By Alexander Kesler, president and co-founder, inSegment Inc.
Paid search is one of the top lead and sales
generating techniques for many online marketers.
But, not optimizing your pay-per-click (PPC)
campaigns, not bidding on enough keywords, and not
properly tracking your ROI can hurt your results.
Here's a look at why those mistakes happen and how
to avoid them.
1. The “Set It and Forget It” Mistake – Not
Optimizing PPC Campaigns
Similar to the way a website’s structure and design
must be constantly optimized through testing, so
must PPC advertisements. Many companies make the
mistake of putting together a PPC campaign, turning
it on, and letting it run for a month or more before
checking its performance. This is the surest way to
waste a month’s advertising budget without seeing a
positive return on investment (ROI).
The need for PPC optimization is a result of both
the dynamic nature of the competitive PPC
environment, and the fact that searchers don't
always interpret ad copy the way it is intended to
be interpreted by the writer. If searchers
misunderstand the meaning of an ad’s text, click the
ad, visit the destination site, and immediately
click the back button—the cost of the ad was wasted.
Since no sales will result from these kinds of
visits, they drag down ROI significantly. One can
imagine that if such issues are not resolved
quickly, a great deal of advertising budget can be
wasted, especially if the misfiring ad is allowed to
run for a month or more.
In addition, the dynamic nature of the PPC
environment is such that an ad that ranks first on
one day, may rank last the next day—or anywhere in
between. This is because an ad’s rank is determined
by many factors outside the advertiser’s control,
such as changes in competitors’ bids; changes in
competitors’ relevance or click through rate;
changes in search engine ranking algorithms (i.e.
the way Google calculates Quality Score); or changes
in user behavior.
All of these changes can be caused by various
unpredictable external factors—what the changes
share in common is that they can occur rapidly and
That is why frequent monitoring and optimization is
the only way to guarantee that a PPC campaign
consistently performs well. A/B split testing or
multivariate split testing are forms of such
optimization. The take-away message is that PPC
campaigns need constant attention and active
2. The Lonely-Keywords Mistake—Bidding on only a Few
In PPC campaigns, keywords (also called “search
terms”) are an advertiser’s friend, and the more,
the merrier—with the exception of expensive keywords
which don’t bring in enough sales to pay for
themselves. When building a PPC campaign, it is
paramount to include every possible keyword that a
potential customer might use to find your product.
Every highly-targeted search term (i.e. “corporate
antivirus software trial” vs. “antivirus”) that is
omitted from the campaign, represents a searcher who
might see your ad for a less-targeted search term
instead. Although the user will view the same ad in
both cases, if she clicks the ad that appears for
the generic search term—“antivirus,” in our
example—the click might cost the advertiser hundreds
of times more than if the ad had been displayed for
a highly-targeted term.
This method of cost-minimization is why it’s
important to bid on all of the obscure, lengthy,
multi-word search terms that potential customers
might use. These highly-targeted “long tail” search
terms represent high-value customers who can be
brought to your site inexpensively. A PPC campaign
with too few keywords is unlikely to capture enough
long-tail searches, and hence, the campaign displays
a majority of ads that are expensive when clicked.
Some of the best campaigns out there have many tens
of thousands of keywords, and we have certainly not
seen any successful campaign with less than 300-500
keywords. To minimize the cost per click, the
strongest PPC campaigns will likely have upwards of
one thousand keywords, and may easily have several
thousand. Capturing all of the long-tail search
terms your potential customers might use will ensure
low ad spend and high ROI.
3. The “How Much Did that Sale Cost?” Mistake—Not
Tracking Marginal Advertising ROI
Every company should understand the concept of ROI,
but it is shocking to witness the number of
advertisers who neglect to apply the concept to
their advertising campaigns. The idea is simple, and
can be understood best through example.
If one out of every 10 searchers that clicks one of
your PPC ads buys your product, for you to make a
profit on the sale, the product’s profit margin must
be greater than the cost of all 19 of the clicks
required to find a buyer. This is the reason that
high-competition, high-traffic keywords aren’t
always a good idea. For a software (or any other)
PPC advertising campaign to be profitable, the total
advertising cost required to sell one product must
be less than the profit margin on that product.
To ensure profitability for your PPC campaign,
conversion tracking should be used to monitor the
advertising cost of each sale. Conversion tracking
is one of the most useful features of popular search
engine advertising programs. For example, it is
built directly into Google Adwords, and is
straightforward to implement. Once conversion
tracking is enabled, it will be clear which ads
yield an acceptable ROI and which don't, and the
under-performing ads can be changed or discontinued.
If conversion tracking is not enabled, your company
can actually lose money on its PPC campaign if
marginal ad spend exceeds marginal profit. Don’t let
this happen to you—set up conversion tracking and
monitor it daily.
---Source: i-Merchant newsletter July
13, 2010 (www.chiefmarketer.com). Alexander Kesler (Alexander.firstname.lastname@example.org)
is the president and co-founder of inSegment Inc.,