How To Optimize Pay Per Click Advertising & Control Costs

January 27th, 2010

Every client I talk to who’s using Pay Per Click (PPC) as part of their online marketing mix voices some level of concern about cost and ROI, and for good reason. With PPC, there seems to be a thousand different ways to spend too much money for not enough return. Have you ever experienced any of these headaches?

Setting the wrong daily budget, only to have it spent within a few short hours
Having all your clicks come from the “content network“ with few or no conversions
Suspected click fraud
Lower than expected conversion rates
Struggling to bid the correct amounts for the various “match types”
Lots of competitors bidding for the same ad space
Suspecting that your PPC ads are bringing in unqualified (disqualified) traffic
Building out your keyword list through keyword research, then not having time to optimize it
And the list could go on!

Please don’t throw up your hands and pause your campaigns–there’s hope! Believe it or not, the PPC game can be optimized and won. You can get good ROI and good Return on Ad Spend (ROAS) with the right skills and tools.

Since giving advice on all the above challenges would be better suited to a book or an eBook, not a blog post, I’ll instead focus on an aspect of the PPC optimization game I don’t think gets enough attention: the various skill sets needed to optimize PPC campaigns and spending. The skills needed to correct ALL of the above list of problems fall into two distinct buckets: I’ll call one “Campaign Optimization” and the other “Conversion Rate Optimization.” They are two very important sides of the same coin, but it’s arguable that no agency/consultant soliciting you today can be successful at both, because the skill sets are so different and there is so much work that often needs to be done on both sides.

PPC Campaign Optimization

A lot of the “low hanging fruit” in PPC cost control can be quickly accomplished via Campaign Optimization. When I talk about this particular skill set, I’m basically talking about the practitioners who do keyword research, bidding, account administration, budgeting, geo-targeting, ad types, reporting, match types, and more. All the things that live in the administration side of AdWords or Yahoo’s or Bing’s advertising systems.

While online marketers used to be able to handle PPC in their “spare time,” it’s gotten so much more robust (and complicated) in recent years. I would never, as an online marketer, try to run PPC campaigns while also juggling the management of a website, other marketing channels, SEO, etc. Most online marketers outsource this skill set to a PPC agency or consultant, and I agree with the practice. PPC administration is very specialized now, and it’s best left to the professionals. The downside, though, is that online marketers have to know enough about PPC campaign administration to keep their vendors honest. For example, is your PPC agency actively doing match type keyword traps? Or, does that sound like a foreign language?

While Campaign Optimization is a good way to get some quick improvements and cost savings, it takes dedicated effort, especially the constant testing, tweaking, and keyword list building that a successful PPC program needs. Also, every campaign optimization done will only be successful if the traffic you pay for converts, so let’s talk about the other half of the story…

Conversion Rate Optimization (CRO)

While it’s the job of your campaign optimizer to bring in the most qualified traffic for the lowest price, your website has to convert in order to realize the return on your ad spend. The better you convert, the more money you have to bid on keywords, the more qualified traffic you can get, the more traffic you’ll convert, the more marketing budget you’ll have, etc. It’s a glorious marketing cycle when it’s working!

The Conversion Rate Optimization skill set should be able to segment and analyze your PPC traffic and conversion rate, recommend effective landing page tests, suggest better ad copy, and help you optimize your conversion funnel specifically for PPC traffic. An understanding of the paid search segment, and the user intent of different keyword queries, is essential. Another key skill is understanding your Unique Value Proposition, and how that UVP can span from PPC ads, to landing pages, to conversion. Finally, a CRO practitioner should have a firm grasp on persuasive copywriting, and how to apply it to both PPC ads and websites.

Is There Overlap Between the Skill Sets?

You may be asking this question soon after you start thinking about separating the skill sets into two distinct categories: Is there overlap? Should there be? We believe there can and should be a bit of overlap in the areas of analytics, ad copy, and keywords. And there would need to be cooperation for executing landing page tests that are valid.

Let’s say you’ve hired a PPC agency to handle that aspect of your online marketing. And, you’ve also engaged a Conversion Rate Optimization firm [hint: FutureNow ] to optimize your online marketing for conversion rate. I would expect to work with your PPC agency if I need data, if I want to test different ad copy, if I want to test landing pages, and if I feel there are keywords that are ineffective or under-exploited.

A good working relationship between the two specialties could add up to lower advertising costs via increased conversion rates. And both of those “wins” will compound over time just like a good interest rate on a savings account.

In Conversion Rates, Improving Conversion, Media Optimization, Optimization Tactics, PPC Advertising, ROI Marketing, Search Engine Marketing, Website Optimization

Add Your Comments

Comments (43)

ipotpal
January 27th, 2010
12:19 pm

Very graet article for Marketing
THanks for sharing!
Pavel Iliev
Michaleen
January 27th, 2010
12:51 pm

Nice article. What are your thoughts on using CRO to improve the quality of leads?
Malko
January 27th, 2010
1:58 pm

Great article and it really helped me to understand the concept of pay per click and also to learn a lot about Marketing.
How To Optimize Pay Per Click Advertising & Control Costs … | Toronto SEO | Toronto SMO | Toronto SEM | PPC Services
January 27th, 2010
2:48 pm

[...] How To Optimize Pay Per Click Advertising & Control Costs … [...]
lincoln air conditioning compressor
January 27th, 2010
4:40 pm

Really wonderful piece of information and I appreciate it that you share something so useful with the readers of this blog.i never about it before and you say we can say some what a awesome way i am fully satisfied about that topic thanks for that post really by heart.
Jake at Home
January 27th, 2010
11:23 pm

Speaking of bid limits, the first few minutes my new yahoo ppc account the max bid was set the same as the daily budget, before the hugh bid clicks got reported back from the network, they had exceeded the daily limit by like x5, which triggered auto rebills on my credit card 3 days in a row to reach their ‘anticipated week’s budget’ got a refund for the daily lmit overshoot.
Wordpress Development
January 28th, 2010
12:56 am

We know it very well that PPCs are a great mean for instant response for something. But, such an important analysis can definitely show the correct direction to this rapidly increasing phenomena…

Great Info… Keep Rocking Guyz…
CBOTmetals
January 28th, 2010
3:53 am

so good article! i’m using Google Adwords now. Do you think that Landing page will be effect to the Search result on sponsor links?
Andrew@BloggingGuide
January 28th, 2010
5:21 am

I just hope that there are really professional and reliable PPC agency and Conversion Rate Optimization firm around. I hope you can write an article on how to chooose for the best of both agency or firm.
Brendan Regan
January 28th, 2010
12:07 pm

@Michaleen: good idea! we’ll work on this topic, so stay tuned.

@CBOTmetals: not sure I understand your questions, so perhaps try and rephrase and maybe we can help

@Andrew: yes, there are a few trustworthy agencies, but lots of charlatans. we’ll work up a post about this topic soon, stay tuned!
zorgin
January 28th, 2010
4:48 pm

I definitely feel that landing page copy is crucial to achieving higher conversion rates. Many people feel that you can write just anything and expect a return and it’s just not true. Good content here, thanks! Will return to read more
Tempe Homes by Steve Trang
January 29th, 2010
12:11 am

There’s no question that the game is getting harder. I was able to consistently get quality scores of 10. Now I’m around 7. Definitely need to use these tips.
Malk
January 29th, 2010
6:19 am

great post, and great tips to folow these. these will certainly improve earning using pay per click.
Diet Advice
January 29th, 2010
9:54 am

Very good advice about PPC.

It has become an increasingly complicated affair. In the past I could juggle a few PPC campaigns alongside managing a website and planning other projects but now with the increased competition and the technical know-how that is needed to compete in PPC today, it is probably better to outsource.

I found your advice both informative and realistic.

Many Thanks

Darren
First2Search Website Promotion
January 29th, 2010
1:26 pm

This is great advice. PPC campaigns can be difficult to manage, especially at first. I know a lot of people that have wasted a decent amount of money doing it the wrong way.
Mike Geary scam
January 29th, 2010
3:15 pm

The difficulty in the process of optimization of PPC campaigns lies in the fact that you need to do some considerable ad spend to be able to collect information that will allow you to start improving conversion rates and ROI. Of you are not willing to risk some money before reaching equilibrium point, you are better off with other promotional methods.
xbox repair guide
January 30th, 2010
7:41 am

I think one of the best way to control costs and increase profit is to go for SEO and target traffic which comes from Search Engines because they are the ones who are always looking for something concrete(some sort of service) when they use search engines.
King Down Comforter
January 30th, 2010
6:57 pm

I’ve been able to turn a $2 per click bid into eventually .40…

Just takes time and money.
Best brokerage firms
January 30th, 2010
7:30 pm

It’s amazing how much time each aspect of successful website takes. SEO, PPC, design, content, backlinks and so on. Thank got it’s not too boring! Thanks for the article Brendan.
VIP Credit Cards
January 30th, 2010
7:32 pm

I spent over $600 on “Yahoo partner networks” PPC campaign and got 1 sale. Lost all respect for yahoo after that.
Tim
January 31st, 2010
8:21 am

I’ve been really shy about stepping into the world of CPC. This article has given me a lot to think about though. Once I get a better footing under me maybe I will finally give it a try.
Ethical SEO Company
January 31st, 2010
12:47 pm

One of the central most issues we see with PPC campaigns is people often forget to separate their ad groups into national and local campaigns with varying budgets. Often times a national campaign can drain a SMB’s budget in a matter of days if not optimized properly, so the local campaign gets the heavier influence while the national is put on a lower budget. However, some companies require a national presence, which is why your SOW should be aimed more intensively on keyword research and conversion rate optimization rather than implementing local endeavors.
Donald
January 31st, 2010
6:03 pm

Great post, thanks for that. I agree, 2 different specialties. Interested to find out who takes the lead when you would collaborate with another agency, while working for a client. Your initiatives means more time 9and cost) for the other agency, who might have some strategies in mind that you don’t agree with. Can a PPC and a CRO specialized agency have a workable relationship that is till in interest of the client?
consumerdebtlaw
February 1st, 2010
6:07 pm

I’ve had hundreds of clicks come from the “content network“ with no conversions so I set the campaign to search only. More so, debt relief related keywords are very expensive. Most of the debt settlement companies that take peoples money and do nothing in return are always on top of the search results. It’s hard to compete with scammers.
Reverse phone search usa
February 2nd, 2010
2:41 am

Generally the conversions from Content network are low but if you can use the power of Search Engines then probably it will be better.
soeren
February 2nd, 2010
3:00 am

why is seo so important? don’t understand this aspekt?
okay, for firms I can understand, why shall it be important. but for private poeple?
thx for your contribution. It helps me a lot of my unknown knowledge
Alberta Business Plans
February 2nd, 2010
10:35 am

Often times a national campaign can drain a SMB’s budget in a matter of days if not optimized properly, so the local campaign gets the heavier influence while the national is put on a lower budget. Thanks for the touch.
jason
February 2nd, 2010
4:38 pm

We have been throwing away thousands in PPC, I am going to go back right now and optimize these keywords.Thanks
Kent Wedding Photographer
February 2nd, 2010
5:29 pm

PPC schemes are unrealistic unless you are prepared to spend quite a bit in the first place. It’s a very fast way to waste money. Good to read articles like this with clarity.
Adam Silver
February 3rd, 2010
5:47 am

I prefer writing my own content and generating revenue through Adsense. It is kind of the reverse of relying on AdWords for income, and with all of the problems you listed this seems like a good choice. It takes a bit more effort, but it is certainly more rewarding in the long-run.
Can Conversion Rate Optimization Improve Lead Quality? | Conversion Rate Optimization & Marketing Blog | FutureNow, Inc
February 3rd, 2010
7:51 am

[...] was a question posed in the comments section of my last post on Pay Per Click optimization that I thought I’d try to address: “What are your thoughts on using CRO to improve the [...]
Pariloto
February 4th, 2010
1:56 am

I think that the best way to optimize PPC campaigns is to replace them with SEO investments.. It may sound crazy but SEO gives better results than any PPC campaign.. at least in my case.
Surinder Sharma
February 4th, 2010
5:10 am

In this blog really share a wonderful information about PPC.
I know many people waste huge amount of money without any profit and returns.. In this blog you explain very well how handle PPC campaign.
Predictii Gratuite
February 4th, 2010
6:28 am

Thanks for sharing this information. I found it very informative and it really helped me to understand the concept of pay per click
Conturix
February 6th, 2010
1:51 am

Nice information. Thanks for sharing it. To success in PPC you just need to be patience and put a big effort on it. Now on average I got about $10 per day.
eko puspo c
February 8th, 2010
8:48 am

thanks for this information..this is very helpfull for me,, now i understand about the secret of PPC advertising…nice info guys
Gratis programmer
February 8th, 2010
1:36 pm

PPC is good if you know how to use it wight.. using a PPC without a good statistics tool to analyze how the traffic is going through your site after they click is a waste… combine the two, and you can’t really fail. Change your ads often…always have several ads competing at each other, and remove the ones that does not work – and do it all over again… almost failsafe
Werner Gottschlich
February 8th, 2010
2:39 pm

Great Article for all PPC User although I am not very convinced of PPC Campaigns because more than 30% of all Clicks are scam and you lose much money.
warez
February 9th, 2010
8:14 am

i was searching for such article, and found your site… great man.. thanks a lot
FRWC Royal Trader
February 10th, 2010
4:06 am

@Jake at Home
Ask Yahoo to change your billing from automated to manual, this way you will be able to add funds manually.
IT Support - Aylesbury
February 12th, 2010
10:52 am

Great info and very well written. Click fraud is a big problem but lets hope that raised awareness helps.
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February 22nd, 2010
3:03 pm

[...] by noreply@blogger.com (Charlie) Look at the original post. Thanks to [...]
Tv Show
February 23rd, 2010
11:51 pm

Thank you for the article, your article is very good for me. makes me so aware of the PPC. good job.