Paid search (pay-per-click) advertising is big. And it’s getting bigger. Its bigger than radio advertising, outdoor advertising and cinema advertising. By 2016 paid search advertising is expected to grow 75% and become a $61.1 billion industry. Check out this infographic:

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Source: The Future of Paid Search Infographic

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The position preference in AdWords allowed you to target a specific range of ad positions for your keywords. This means you could set a bid price and target positions 3 to 5 for instance for a particular keyword. I have found this feature to be somewhat useful because experimenting with ad position is a fundamental part of optimizing your search campaign.  Also, targeting a range allowed me to categorize words and better understand performance based on position. And being able to position preference helped set a particular goal and optimize accordingly.

However, Google economists (who study this stuff for a living) feel that this feature is not that very helpful in optimizing a campaign. So, this feature is getting a boot.  Here is the announcement:

More specifically, you can expect to see the following changes in your account:

As of today, April 5th, position preference can no longer be enabled for campaigns through either the AdWords web interface or the API. Campaigns already using position preference will still have it enabled, but if you turn position preference off in one of your campaigns, you won’t be able to turn it back on.

Starting in early May, we’ll begin disabling position preference for any campaigns still using it.

After you disable position preference (either manually or when the feature is retired starting in early May), the manual maximum CPC bids for those campaigns will be the bids position preference used most recently. Position preference tries to raise or lower your bids to target the positions you specify. So using the most recent position preference bid as your manual maximum CPC should minimize disruption to your traffic.

So, bye bye position preference.  You were nice but apparently did not deliver the goods!

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If you’re getting started on understanding Google AdWords then you’re probably wondering how it ranks the ads. It’s a great question and needs a detailed explanation. For starters bidding high enough on a keyword does not guarantee a high placement on search results. The bid price is one of many elements that are factored when determining the display order. This means simply having the budget to spend isn’t going to guarantee the traffic and/or visibility you’re seeking. When it comes to paid search engine ranking, it’s all about ad relevancy.

AdWords is based on an auction pricing system. So, the advertiser bids on a price point for a range of rankings for a particular keyword. For example, for the keyword “Arizona Vacation” the price range could be $0.45-$0.55 for placement on slots 1-2, $0.25-$0.45 for placement within 3-7, etc. Hence to be considered for the first two rankings you would have to bid at least $0.45 for that particular keyword. The story doesn’t end there, however.

In order to deliver the search user a better experience, Google has implemented a quality score. The quality score guards against irrelevant search results on keywords by evaluating the relevancy of the ad under consideration for a given keyword. The final ranking on a paid search is then the quality score times the bid price. (Ranking = Quality Score x Bid Price.)

Google does not disclose all that is involved in the calculation of the quality score, but it does state that consideration is given to the relevancy of the text in the advertisement and the click-through rate of the advertisement, as well as the relevancy of the landing page, etc. As you can see, the goal is to drive relevant ads for keywords for the best possible user experience. After all, a poor user experience will result in loss of credibility in the search engine. It is also beneficial for the advertiser, since this system helps to create relevant traffic.

So really in order to boost your ranking on paid search you need to make sure you have an adequate budget but you also need to make sure your ad copy and your destination website is relevant to the words you are bidding on. At the end of the day it’s all about relevancy and the user experience. Google wouldn’t be Google if it didn’t deliver a relevant search result for each query.  So, if you want to boost your position focus on improving your quality score and then up your bid a bid. If you do it right you’ll be surprised at the results.

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It’s been crazy busy around here the past few weeks and for good reason. The whole thing came to a head over the past few days.  Because in the last two days I launched all 21 videos for Sabdamala.com to hundreds of prospects.  So, in the last 48 hours I had to coordinate a free and paid membership section of the website, create email newsletters with explicit offers and update a plethora of documents.  All of this was a huge task indeed. I’m glad to have it all done and behind me!

In the midst of this process a friend of my asked me what I was doing to drive traffic to my website and hence develop this market. This friend is fairly new to Internet Marketing and hence he wanted to hear about the fundamental tools I had used. I decided to write this up to not only answer his question but also make it available to anyone else who might be interested.

So, here is the list of tools I used to drive traffic, build a email newsletter database and eventually drove revenue:

1. Google AdWords (Pay-per-Click) – I needed quick instant traffic so I turned to Google’s AdWords program. Since the search volume on my top keywords is not very high I decided to only use the content network. The content network allowed me to gain exposure via relevant websites and also helped to drive relevant traffic. At first I let Google find the sites for me, but over time I started to be selective about the sites and also included some of my own.

2. Facebook PPC – Unlike MySpace, Facebook has a superb ad business model that allows small businesses to reach its 400 million plus members. My market is fairly small in the greater scheme of things.  However, with the right descriptor phrases I was able to find over 15,000 FB members within my geo-target. I created two ads with differing ad text and eventually settled one one (based on performance).  I was able to drive a lot of traffic this way with only a $5 per day budget.

3. Affiliate Marketing Partners – From the very beginning it was my goal to develop a group of very strong affiliate partners. I was able to identify two very strong partners with exceptional websites. These partners included my ad on their websites and also sent out emails on my behalf. Currently I am tracking the traffic from these sites and will be sharing revenue with them as it comes.  I have learned that having affiliate partners who believe in your product is very important if you’re seeking to drive traffic to your website.

4. Association Marketing – This is a bit unique to my market but there are 15-20 associations that I was able tap into in order to get the message out to my market. These are regional associations that serve this particular market at the local level. I personally emailed association leaders seeking their support. The response wasn’t as enthusiastic as I’d expected, but that was due more to the newness of the relationship than anything else. In the end support from these associations helped drive awareness and acceptance.

5. Traditional media – Internet marketers love to focus on the latest online tools and services and oftentimes forget about the power of traditional media. By sending out press releases and providing radio interviews I was able to obtain a fair amount of exposure in my target market. I was also able to enhance the credibility of my business once articles appeared on traditional media outlets. This reputation building helped to assure customers of the product and service.

With all this great traffic coming to the website I needed something to create a dialogue with visitors. If you think about it this is the most important part of the whole process. You need to have a specific strategy on utilizing this traffic. If you don’t then you’re making a fundamentally bad mistake.There are lots of things you can do with this traffic.  And I ended up asking them to join my email newsletter.

After capturing their email addresses I communicated the value they would receive and why the needed to subscribe if they wanted to benefit from my services. Once I had their email address I communicated with them on a weekly basis. I set up an account with Constant Contact to facilitate this process. I found that about 20% of visitors were leaving their email addresses. In a few short weeks had a database of over 400 prospects. All of a sudden I now had a database to market to and that is where I was able to walk prospects through a purchase cycle!

The rest as they say is history.

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Following up on my earlier post “Optimizing Your Pay-per-Click (PPC) Campaign – Part 1″, today I will focus on placement bidding, landing page targeting by keyword and managing the content network. In case you missed the original post I discussed geo-targeting, the search query report and, effective day-parting.

Placement Bidding – The natural inclination of every marketer is to shoot for the highest position on any given keyword. The answer is never that simple and this strategy can be very expensive. While there are words for which you do want to rank in the top slot, there are instances when ranking in the third or fourth slot actually makes more sense. I’ll be honest though, the slot that is best for your keyword is not easy to identify. It can take lots of testing and close analysis to determine the most profitable position. At the end of the day the ROI at the keyword level should determine the best position for that particular word.

Whenever I start a PPC campaign I start by bidding for the mid-low positions. This would be potions four and below. The reason I do this is because I don’t to waste money right away. Plus I want to learn as I move up in position (which is cheaper) than when you move down in position (which is more expensive). I allow three to four days of data collection before making adjustments to the bid price. Words that receive high impressions and good CTR (greater than 2%) I start bidding higher and moving up in position. Then I closely monitor the ROI and keep track of any sweet spots I identity.

Once I have found spots that work for certain words then I utilize the placement bidding option in AdWords to lock in the position. Placement bidding automatically adjusts your bid price so you maintain the position. The default option in AdWords is that your bid price stays the same and your position changes accordingly. So, by choosing placement bidding you’re locking in your position (within a certain bid price range of course).

I’ve found that placement bidding can be a powerful tool in lowering the cost of keywords and maintaining a strong ROI.

Landing Page Targeting by Keyword – Grouping a similar set of keywords into the right ad group is a fundamental part of a successful campaign. This helps to improve your quality score both at the keyword level and the ad level. However despite your best efforts there will always be a few words that do not quite match the theme of the adgroup and hence it does not make sense to diver all words to the same landing page.

Or, sometimes what I’ve found is that a particular word outperforms all the other words and you want to send some words to a different landing page to improve performance. Furthermore, there are instances when a particular keyword will appear in the search query report and you want to improve conversions for this particular word. This will of course necessitate using a different landing page than the one for the adgroup.

What I’m saying is that regardless of how well the keywords are grouped together in an adgroup there are always instances when you might be interested in diverting traffic for one word to a particular land page.  I have found this to be very helpful in improving ROI. For example, for a particular hospitality client I was working for, I found that the word “romantic” was a common search query. However, the word was grouped with other similar words and was going to the same landing page. I wanted to see if I could improve conversion for only queries with “romantic” and so diverted this to a different landing page. I found that doing so dramatically improved ROI for this word. This discovery resulted in creating a romantic specific offers and its own targeted landing page.

Managing the Content Network – When setting up a new campaign one of the first things I recommend you do is create two campaigns for the same set of words. Set one campaign for the search network and the other for the content network. There are many reasons for this but the primary reason is this deliniation will help you better manage the ROI of your campaigns.

For instance, over time you will see that the ads that work on the search network may not work on the content network and vice versa. Additionally, the content network is cheaper than the search network, so being able to control the bid price for each is very important in delivering high performing PPC campaigns. Finally, while you mange position on search networks you’re managing content websites on the content networks. The tactics you employ to improve performance is different for these two metrics.

In the long term you will see that the content network has lower CTR, high impression but is cheaper. The ads you deliver here will be different than on the search networks. Search traffic on the other hand will have higher CTR and lower impressions and will tend to be more expensive. This is not to say that the search network is not profitable, it is. The only difference is that you need to manage it differently than the content network in order to see a good ROI. Lumping the two together makes it very difficult to mange effectively and consequently result in lower  ROI on both networks.

As I mentioned in Part 1 of this series, I’ve identified seven factors that make a strong PPC campaign. These are: geo-targeting, the search query report, effective day-parting, placement bidding, landing page targeting by keyword, managing the content network and, effective keyword discovery, research and utilization.

I will discuss keyword discovery, research and utilization in the next post. Stay tuned.

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photo credit: ActiveSteve

photo credit: Las Valley 702

photo credit: Marc_Smith

If you run a pay-per-click (PPC) campaign then you need to constantly optimize it’s performance. You’re paying for clicks so you can’t afford to begin a campaign and let it run without keeping a very close eye on its performance. Just being satisfied with the traffic is not going to deliver the ROI that you can gain from an effective PPC campaign. Don’t get me wrong, traffic can be a good measure, but targeted, relevant traffic that converts into sales and delivers a strong ROI should be your ultimate goal.

When it comes to PPC there are seven critical elements you need to pay close attention to in order to deliver high ROI. In this post I will focus on three of the seven: geo-targeting, the search query report and effective day-parting. I will cover placement bidding, landing page targeting by keyword and managing the content network in a subsequent post. Finally, in my last post I will discuss effective keyword discovery, research and utilization.

Geo-targeting -  Whether you have an established business or one that is just coming up, you need to first evaluate where your most profitable customers are located. Do not make any assumptions and take a peek at your sales history, product performance to determine the major markets for your products.  Rank your geographic markets and set your PPC geo-target to the most profitable locations.

Google’s AdWords allows you to set multiple geo-targets. In my experience it is best to set one geo-target per campaign. This means you can closely monitor the performance of each market and turn off campaigns by markets. Effective geo-targeting requires testing so keep testing markets until you have a strong mix. As you monitor performance do not rely only on the metrics provided on the AdWords screen. It is very important to run a geographic report for each campaign every two weeks. When you do this you will discover additional performance metrics that will help improve performance. For example, if your geo-traget is regional in nature (entire Phoenix Metro area for example), then this report will break down campaign performance by  city (Scottsdale, Chandler, Tempe etc.) This breakdown allows you to further break down your market and focus on the more profitable areas.

Search Query Report – In my experience I have found the search query report to be one of the most useful performance reports. The reason for this is because this report provides the exact search term visitors uses to arrive at your website. Even though the keyword report tells you which phrase or keyword converted, you still do not know the exact phrase that was the source of your conversion. For example, they keyword report might indicate that the phrase “phoenix hotel” was the converting phrase, but the search query report might show that “pet friend phoenix hotel” was in fact the phrase the visitor typed to arrive at your website.

This additional information helps you understand that not only was the visitor looking for a phoenix hotel but they were specifically looking for a pet friendly hotel.  This additional information can help you improve the ad text you use, the offers you include in promotions and also expand your keyword mix.

Effective Day Parting -  Google AdWords allows you to turn your campaign on and off during different times of the day. One of the easiest ways to optimize performance is to keep your campaigns active only during the most profitable times of day. If you are just starting with your PPC campaign then I recommend taking a look at the traffic patterns on your website (via your web analytics) to set an initial day parting schedule. However, finding the most profitable times requires constant testing.

While testing your day parting times, one thing to keep in mind is, even though you have set it up so the daily budget is evenly distributed through out the day, this is never the case. I recommend running an hourly (regardless of date) campaign report to determine how your money is being spent on any given day.  I generally look at the time at which 80% of the budget is spent and compare this against the conversions during this time.  This analysis helps to determine whether or not to split the day parting even further.

Next I will discuss placement bidding, landing page targeting by keyword and managing the content network.

When you’re setting up a  pay-per-click campaign you have many choices on where and how you’d like your ads to appear. Many people (due to budget limitations) opt-out of Google’s content network (these are sites which have agreed to display Google Ads). However, research is showing that this could be a mistake. The numbers are in and apparently the content network tends to deliver better results than the search results. Take a look a this article from AdAge:

In a study Google conducted last year, ads in its content network, which reaches about 80% of internet users in the U.S., was more cost-effective for advertisers than search. Among advertisers that use both, the cost of reaching a consumer who ultimately clicks on an ad cost 2.6% less on Google’s content network than in Google’s search results.

Google came up with the data by following 25,000 advertisers representing 1 billion clicks and 70 million click-through conversions for 12 months ending in November 2008. In total, 51.6% of Google advertisers got better returns from the content network than search. Search still drove the majority of total clicks, but nearly 20% of all clicks came from ads on the content network among advertisers included in Google’s study, proving that it too can be an important driver of leads and sales for marketers. (Of course, a click is just a click and doesn’t necessarily mean a consumer took the action an advertiser wanted, be it to fill out a survey or buy a product.)

The AdWords blog has the full white paper for download.

Recently I was asked if there was any recourse for a business whose name was being used by a competitor in Google AdWords. Basically, this particular business was concerned that a Google search for their business name returned their competitor in the number two paid listing. Certainly not a very good thing for driving traffic to your site and business. So what can businesses do to combat this issue?

The only real way to address this is if your name is trademarked. Google AdWord recognizes trademarks and will not allow competitors to bid on trademarked names. They have procedures in place for companies to file any such violations. If “Your Product/Business Name” is trademarked then you can certainly pursue this course by filing a compliant with Google.

If you do not have a trademarked name then Google allows bidding on competitors names just like any keyword. That means the onus is on you to protect your business name. One way to combat this is to price the competitor out of the market by bidding 10-20 times higher than them. It could prove useful as a marketing strategy too, because having a paid placement appear alongside an organic result can be a powerful incentive in driving traffic. Another way to combat this is through a “gentleman’s agreement” of sorts. Ask your competitor to stop the practice and promise them that you won’t buy their name as keywords either. This may or may not work.

Other than that, there is little recourse. Of course you can take solace in the fact that over 70% of users do not click on paid listings but prefer organic results. Most people also look at the URL before they click through and so if they were trying to reach you they don’t see the point in clicking just because the title says your name but your URL doesn’t. So, in the long run it may not be hurting your business in any significant way.

One way to NOT address this issue is by clicking on the ad as a way of draining your competitors AdWord budget. Not only is this unethical but you will be committing click fraud. If your competitor finds out (which they very well could, by looking at their server log files) and reports it to Google, you can say good by to any organic or paid listings on Google for some time to come.