…and actionable ways to remedy the problems

Running PPC (pay-per-click) campaigns certainly isn’t a bulletproof, set-it-and-forget it, easy-as-pie way to hit your marketing goals. Though, for most businesses, search should absolutely be part of the digital marketing mix. Why? When potential customers hit the search engines explicitly stating their problems, you have to make sure your business/product/service presents itself as a solution.

If you’re not actively running a paid search campaign yet, start here. If you are actively running a paid search campaign, skip ahead.

Before you launch into a search marketing campaign, you should start by determining the potential return on investment on your program. How could I possibly know that ahead of spending my money? Google offers a free keyword planner tool for marketers planning search campaigns. This tool will help you forecast how much you’d have to be willing to spend to enter into the search ad auction. [Want to learn the basics of paid search? Check out this PPC 101 webinar!]. From there, we can apply a series of simple math to determine Return on investment.

Say you are running a hotel for dogs business and are interested in attracting more pet owners to bring their dogs into your hotel.

The keyword tool tells us that there are people looking for these services:

Google Keyword Tool

We are interested specifically in the CPC (how much we would need pay each time someone clicked on our ad). In this case, $2.50 [for simple math’s sake ;)].

Then, we have to define a couple of things to help with our return on investment analysis:
Conversion rate: percentage of people completing a desired action on our site.
Conversion rate = # of desired actions/# of visits

In this example, conversion rate would be people inquiring about the dog hotel, and looking to book a stay for their pet.

Now, for the ROI analysis. Walk through this table:
ROI Analysis

Is this a strong enough return to invest in search ads? There’s a 50% marketing cost too book this appointment. Yikes!

What if you knew that the average customer in this business booked four stays per year at $300 each? Once we acquire them the first time at $150 each, we spend $0 on each rebooking (clients love us! YAY!). Now the marketing cost is $150/$1200 or 12%. Much more palpable.

So, could search work for your business? Use the keyword planner and the ROI process shown above to vet the channel.

If there’s potential for a return according to this analysis but your actual campaigns are generating disappointing results, let’s talk about potential problem areas in your campaigns.

#1: You’re leaking money on display campaigns you didn’t know you were running

Wait, what? When advertisers create paid search campaigns, many of the default settings work to Google’s benefit vs. your own. When you build a new campaign in AdWords, the default campaign type is “Search network with Display select.

Search Network with Display Select Standard

Search campaigns capture prospective customers when they are actively seeking you/your solution out. Raising their hand saying “I need what you have!” Your willingness to pay to capture that user should be stronger than your willingness to pay for someone who stumbles upon your ad. Display ads present your ad on a network of websites (based on content relevancy) so people really aren’t necessarily seeking out your solution. Display ads often have a significantly lower conversion rate and therefore mess up the entire ROI equation above.

Remedy – Always separate your search and display campaigns to control CPC bids and maximize results.

#2: You’re giving Google too much credit to manage your budget

Another one of those pesky default settings at campaign creation! Google wants you to give them a daily budget to work with and get as many clicks as they can for your keyword terms.

Daily Budget with Maximize Clicks

At the surface, sounds great, right? Well, what if “dog hotel near me” costs $4.00 per click and “boarding my dog” costs $2.00 per click, but historical data shows that the former converts at 10% and the latter at 1%? Google would want to push you budget into “boarding my dog” keywords because it can get more clicks for your budget. This isn’t the best move for your business! You care more about return and high value engagement than eyeballs on your site.

Remedy – Select “manual CPC bidding” instead, so that you can control how to invest your budget based on results you actually care about.

#3: You’re wasting money in areas you can’t serve

When you set up your campaigns, you have many options for how to geographically target your ads. Often, it is quickest and easiest to target at the national, state, or metro area level. However, there are better ways to target your ads.

If my dog hotel is located in St. Paul, Minnesota, I might want to attract pet owners across the Minneapolis-St. Paul metro area. But check out the Minneapolis-St. Paul metro area according to Google:

Map of Minneapolis - St. Paul Metro Area

It stretches nearly to the Canadian border! That means that a dog owner would need to drive for more than five hours to reach our location. Chances are slim.

Remedy – A better solution is to target specific cities that you are able to and frequently serve. Or, use radius-based targeting around your physical location. Want to get really smart? Use concentric radiuses with dimension-based bid adjustments around each rung. Essentially – bid less for searchers farther from you or more for searchers closer to your location.

Here’s a peek at a dimension-based bid adjustment strategy we’re using for a retail client:

Map Based on Store Location

As searchers move away from the store location, we’re willing to spend only percentages per click of what we’re willing to spend for someone who is in the neighborhood.

#4: You’re consuming your budget on far too broad or unrelated keyword searches

Some advertisers want to make sure they are found on Google no matter what the searcher is looking for. In the dog hotel business, an example train of thought might be a keyword like “pet care.” If someone is searching for pet care, they may be interested in a dog hotel. Sure. But they might also be interested in how to groom their pet, the best food for their pet, when to or where to vet their pet. There’s a 10% chance that the searcher who types in “pet care” is looking for an overnight care solution for their pet, but the other 90% of searches, if you were spending money on the clicks, would be a waste of your budget.

When we took over an account for a health care company supporting many dentists on a national scale, we found that nearly 30% of their budget was spent on the one-word search phrase “dentist.” While this might seem relevant, it is a very top-of-funnel categorical search. How much more likely would someone be ready to take action when searching “severe mouth pain dentist near me” than “dentist?” A LOT.

You can diagnose this problem by looking at your search query report and see where you are spending your money.

Search Query Report

Remedy – First and foremost, think about where buyers are within their decision-making process.

Purchase Funnel

There will be a high volume of searches that happen early in the process (needs, categorical searches) but without knowledge of search intent on keyword phrases, these are dangerous areas to invest a large sum of your budget. Try to spend your money as people are gathering information in your category, considering alternatives, and are ready to make a decision. In the case of highly limited advertising budgets, start at the bottom of the funnel and work your way up.

The analysis of your search query reports will point out keywords that consume budget but don’t lead to desired actions [high spend, but low/no conversions]. Turn those search phrases into negative keywords in your account. Optimization activities, as in the dental clinic example above, allow you to put your budget to higher likelihood to convert search phrases and lead to more form fill-outs, phone calls, or e-commerce (for example).

#5: You aren’t actively managing your account

Often, companies reach out to us because they see diminishing results from their paid search campaigns. Less leads than they used to receive. Declining results from e-commerce. A decrease in quality traffic. Whatever the case may be, there a few telltale areas of your account to help diagnose mismanagement or lack of management within your campaigns.

Impression Share

This is a metric that shows what percentage of targeted keyword searches you actually appear for on the SERP (search engine results page). You’ll want to achieve at least 80% impression share for your core campaigns and ad groups. Here’s how to determine what your impression share at the campaign or ad group level:

Managing Your Account

If you aren’t showing up for your desired search terms, you definitely aren’t going to attract a click on your ad!

Average Position

When Google changed the way it presented results on the SERP in February 2016, advertisers began fighting for those top ad spots on the page more aggressively. Instead of eight ad spots “above the proverbial fold” on the search results page, there are now only four. Here’s an example of what the SERP looks like for “dog hotels in lowertown st. paul”:
Search Results for Dog Hotels in Lowertown St. Paul

Those top four ad spots are highly coveted because they account for 60% of the real estate on this search page. The only other result to appear here is a local search result. The first ad spot is position one; the last ad before the map is position four. Your average position is a measure of your position averaged out over the number of impressions your ad has received. If your average position is worse than four, your impressions are fairly weak because you’re only appearing at the bottom of the page. A solid average position is 2.7 or better. Adjust your bids to try to hit your sweet spot.

Click Through Rate

For a search network campaign, a click through rate of less than 1% on categorical or informational searches indicates a poor position on the SERP, inclusion of inappropriate keywords in your account, or uninteresting ads. Refer back to reason #4 regarding keywords. Refer to the previous point on average position. Check out Perry Marshall’s advice on writing more compelling ads [link to this slide share: http://www.slideshare.net/aptvue/bsr-swissarmyknife]. It’s an oldie but a goodie—some great tips on how to make your ads pop and increase click through rate.

Change History

More of a diagnostic measure than anything, a change history report can help you determine how frequently your account and campaigns are being adjusted. There are ways to automate certain elements of account management and many things that must be manually managed as well. To see how often your campaigns are being touched and optimized, download a change history report. Here’s where you’ll find it:

Change History

Optimization should be happening at a weekly cadence, at minimum. Talk to your internal resources or agency about the importance of making frequent changes. If they are unwilling to manage your account frequently, find a partner who will. *cough* Three Deep *cough*. ;)

So, what now?

If you’ve done the research and the math and decided that paid search campaigns should work for your business but they just aren’t producing the results you desire, look at the problem areas that we outlined to try to remedy some of the potential issues. Unfortunately, there’s not a “silver bullet” in search campaign optimization – it takes ongoing effort to stay competitive and keep the medium working well for your business. With an ever-evolving marketplace, you’ve got to be willing to pivot as you go. If you’re intrigued with what you’ve read but have zero desire to look under the hood of your PPC campaigns, let us do the dirty work! We’d be happy to give your campaigns a free scan and let you know where we find the biggest weaknesses opportunities.

Happy Optimizing!

-Carie 

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