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Archive for May, 2015

Troubleshooting Your AdWords Account

Posted by Bob Dumouchel in adwords expert

Friday, May 29th, 2015

ThinkingYour phone rings and the person on the other end, typically your boss, tells you that expectations are not being met and that conversions, orders, or leads have dropped; They want to know what’s wrong. As a marketing professional, at some point you are going to get this call and what you do next can make a big difference in your career. So let’s explore how we can deal with this as it applies to the search campaigns in your AdWords account.

First thing is to keep your cool and get as much information as you can about the situation. Ask open ended questions like:

  1. Have you done any research on this issue that might help me get to the bottom of this problem?
  2. Are there any external events that might be impacting these results?
  3. Has anything on the site been changed recently?
  4. What current data are they monitoring that shows the problem?

Drops in performance can happen at any point in the process. The longer the sales cycle, the more difficult researching this becomes. To give this some real world flavor, we are going to use an example of a Plumber. Here are the steps in the process flow:

  1. Prospect has a want/need.
  2. Prospect creates a search query and enters it into Google.
  3. Google produces a SERP (Search Engine Results Page) with paid and organic results.
  4. Prospect clicks on one or more of the links on the SERP.
  5. Prospect lands on your site and the page loads.
  6. Prospect goes through a selection process and contacts the businesses on their short list.
  7. Prospect contacts the business through either the phone or web-form.
  8. Customer Service proposes services and sets an appointment.
  9. Service provider goes to customer location and delivers service.
  10. Customer Reviews
  11. Customer may become an evangelist with either a positive or negative referral.

Let’s discuss these in detail

  1. Prospect has a want/need.

The prospect having a want/need is something that is above the pay-grade of AdWords on the search side of the account because search responds to demand, it does not create it. Other types of marketing such as image ads in Display can help create want/need but that is outside the scope of this article. This does not mean that the want/need factor does not count because it certainly does. What you examine here are the factors that create this that may have changed. In the past, we helped a snow removal service with their advertising and there was nothing like a good snow storm to create demand. The question you ask yourself at this point in the process is did the demand change. Is the business going in a slow season like a Tutor business in summer? A great resource here is Google Trends with the customer’s primary keyword. Check the pattern to make sure that the problem is not just a normal seasonal change.

  1. Prospect creates a search query

The search process starts with a need and how the audience translates that to a search. The one constant here is that you can never overestimate the creativity of a person with a blank search box. How the person performs this process is as complex as language itself. Part of the magic of AdWords is the ability to match to the keywords in the search query. One thing that many overlook is that the keyword is not the same as what the person searched for. This stage is where the person creates the search query and it matches to the keyword but it is not the keyword. Review your search query reports to see that the searches you’re getting are relevant.

  1. Google produces a SERP (Search Engine Results Page) with paid and organic results.

Okay, there is more than a little magic involved in this process but let’s keep the conversation simple for right now. If the SERP changes, and it does all the time, that can and does impact the result. What is created here is the impression and it’s the first level of data that we have to examine for a drop or change in this attribute. If people stop searching for your product of service you will first see this in the impression level and you will have to deal with it there. The simple truth here is you cannot get a click if there was no impression.

  1. Prospect clicks on one or more of the links on the SERP.

The click is the next thing to examine and this is normally thought about in the context of the CTR (Click through Rate). If this drops there are lots of possible factors to consider:

  1. Did the SERP results change resulting in fewer clicks?
  2. Did the ad copy change resulting in fewer clicks?
  3. Did the mix of the keyword impressions change?
  4. Did the ad position degrade?

The SERP environment can greatly impact the CTR because of things you did or things others did. A change in ad copy might result in a lower CTR but this can also happen if your competitor put an offer in the market that is better than yours. Another common item is the entry of a new competitor that bids to the top of the page pushing your ad to the side. This can also happen when your competitor adjusts their bids. When the traffic falls from the top to the side, the CTR can drop by a factor of 10x. Make sure that one thing you check for is a shift in volume from the top to side positions (Segment in the AdWords data).

  1. Prospect lands on your site and the page loads.

Some people are surprised by this but just because they clicked on the ad does not mean they saw the page. Page load speed can be a big factor here and if the page takes too long to load, people will click the back button and go on to the next provider. To isolate this, you want to look at the AdWords clicks and the Analytics page views. A big difference between these two numbers is an early warning indicator of a page load problem. This factor should also be part of your normal account audit function.

  1. Prospect goes through a selection process and contacts the businesses on their short list.

Let’s start by stating the obvious – the experience the visitor has with your content has more to do with the response rate more than any other factor. There is almost always a compromise on the web content because people can visit for many different reasons. The more reasons they visit for, the more difficult it becomes to have a great conversation with them. A shift in the mix of the search queries can certainly move the needle in unpredictable ways. The questions you need to ask here:

  1. Did the message change?
  2. Did the competitive pages change?
  3. Did the keyword mix change?

You have to remember that the page experience is in the context of a bigger web experience so you may have changed nothing but your competitor might have. Most people selecting a product or service will view several others and then go through a process of selecting the ones that they will interact with. If the decision is low pressure, they may shop for some time going through a short list process but others will go directly to the response because purchase pressure is high. Using our example Plumber, a person with water gushing on their floor will be highly responsive while a person seeking bids for a remodel project will be a much deeper shopper and more influenced by the design elements.

  1. Prospect contacts the business through either the phone or web-form.

In investigating drops in sales, this area has come up more than once. Have the forms been tested to ensure that they go to the right person and is that right person responding in a timely manner? When both forms of response are available, sometimes you need to bring the data back together. We recently had a situation where the client was watching and responding to the online conversions and they raised an alert when that performance dropped. Our investigation found that the phone volume had increased and the types of conversions had simply changed from one type to another.

  1. Customer Service proposes services and sets an appointment.

Sales leads are not fine wines and they age poorly and we have found situations where they sit for days or even weeks. The other thing we have observed in this area are customer service challenges. In one case, we had phone tracking and could not explain the drop in appointments until we listened to about 25 calls. We then had to notify that client that they had a rude customer service rep and a group of really good leads was destroyed by bad phone skills.

  1. Service provider goes to customer location and delivers service.

This step in the process contains more than a little risk and that is the point of delivery. It is also very difficult for the marketing area to reach into this and get any valid data but it is certainly an important step in the process.

  1. Customer Reviews

Reviews are something that can help detect product or service delivery challenges. If the business gets regular reviews then paying attention to the trend of these becomes important. Bad reviews can cause the entire flow to dry up for those that follow reviews. Yelp can be especially problematic and very difficult to deal with. You have to be on guard to reviews of both your location and your competitors because in most cases, both of these are part of the customer experience. One thing you want to do is keep your eye on the traffic volume from these sources so you do not get surprised by changes in your market.

  1. Customer may become an evangelist, aka Brand Advocate, with either a positive or negative referral

This one would be very difficult to detect but a bad review may belong to an evangelist and if it does, the impact can go way beyond the review website. An Evangelist is a customer, client, or trusted adviser that will recommend your business to a friend. Not all customers are evangelists because many will never reach the level of recommending your business. In the community, there are connector personalities and this is a normal attribute for an evangelist. As you can see, everything has to go right for a referral to happen. If you have an evangelist that goes negative on you, the damage can be extensive.

Managing Your Marketing Ecosystem

Posted by Bob Dumouchel in adwords expert

Friday, May 29th, 2015

Suspect-to-Evangelist-Pyramid

“A referral happens when the evangelist’s friend has a need that the evangelist believes that your product or service will service their friend’s need.”

This article might not be for you!

If your business model leans more towards the transactional side, clients and evangelists are not in your model and all your resources should be focused on the prospect to customer action. If your business model is transactional, this article does not fit your business. Transactional businesses normally have a product or service that is only sold once. Things like debt relief or diet pills lean toward this model.

A good marketing eco-system moves people or businesses through various stages of relationship with the business. People flow in both directions based on the on-going experience they have with the business. The job of a marketer is to move the most people in a positive direction in the flow. While often represented as a pyramid, the shape of the data is actually more like the form above. It has a steep angle as it moves up the statuses with a bubble at the end in the most mature companies. Time is like gravity in this process as the status tends to drop if the relationship is not constantly refreshed.

Many business executives will tell you that most of their business comes from referrals. The challenge is that the executive is only looking at one point along the path and typically that is when the order is registered and the prospect becomes a customer. If you follow this farther back, you will find that all business ultimately came from prospects or suspects.

Please note that nowhere in that statement is there anything about the vendor (that’s you) in the process. That’s because while you have to earn the referral, you do not cause the event. It is the need of the friend that starts the process. There are things you can do to influence that but it is very difficult to create need.

It’s about moving people through the communication system

Each stage in the process can be thought of as a segment classification with a barrier to the next class. That barrier is the customer experience and that is within your control. So let’s take this problem apart and discuss the barrier between each classification.

Suspects – People that might do business with you

The first class, and by far the largest, are the suspects. These are people that we suspect could do business with us but so far that’s it. Many times, the problem with this class is the size and the related expense of communicating with that class. The first thing a business has to consider is do they have the budget they need to talk to this class. If they do, the primary barrier to being a prospect is awareness of the product or service. This is especially difficult when you are dealing with a new innovation where people are not aware of the problem or the product. With a well-defined product or service, creating awareness is largely an educational process to a very large group of people. As awareness becomes interest, the person morphs from a suspect to a prospect. So this barrier is the combination of awareness and interest.

Prospects – People who have some indication they might do business with you

Prospects are created by data that indicates that the person is more likely to be a good fit for your product or service.  Creating prospects using data is quick and easy but moving them from prospects to customers is not. This is because as a marketer, you need to transform the qualification of interest into desire and ultimately action. This is where most businesses spend the majority of their marketing resources and their measurement of choice is the ever popular first sale.

Leads aka Sales Pipeline – People that have proactively indicated an interest in your product or service

A prospect or suspect that has proactively reached out to the business is a lead for the time period that it is being followed up on by the sales team. The proactive outreach normally takes the form of a sales lead form completion, phone call inquiry, or other valued event. If the lead goes cold, then the person returns to be a prospect with special history.

The subsystem of leads is often called the “Sales Pipeline” but our position is that the pipeline runs from suspect to evangelist.  Thinking only of this one section of the system results in a myopic view of the process. Since this status starts with expression of interest and ends with a sale, it is an area of focus for many plans but it is no more or less important than the management of the other stages.

Customers – People that have done business with you within one business cycle

Customers happen when a suspect or prospect purchases a product or service. Sounds simple enough but trust me when I tell you it only looks simple.  A customer is not a lifetime status and the customer can easily drop back to being a prospect if they fail to reorder when expected. This is also the time when many organizations stop marketing and that is a huge mistake. The other big mistake made with this classification is thinking of customer as a permanent status. While you can establish any rule you want for the classification, the typical customer status should only hold until the next expected purchase and this is driven by the normal sales cycle of the product or service. If you are not aging the customers out of this status, then you will not see what is truly happening in the business.

Clients – Customers who will continue to do business with you even if you do something wrong

Clients are someone who will continue to do business with you even when you are not the low cost provider. They will also forgive you when you do something stupid because they trust you. Moving a customer to a client requires that you build trust and loyalty.  Normally this transformation happens over time and can be difficult to observe. Most businesses that measure this do so a few times a year.

Evangelists aka Brand Advocates – Customers, Clients, or trusted advisors that recommend your business when their friend has a need

Evangelists are the very lofty goal of the eco-system but they are exceptionally difficult to create because it requires a client with a specific set of social skills and experiences. I subscribe to the concept of the social connector as described in the book, Tipping Point by Malcolm Gladwell. In every social network, there are people that value the process of connecting others and it is this trait that turns a client into an evangelist. To some degree, there are clues in social media as to who these people might be but there are also lots of posers. The data you want to look at is their connection level and the activity of those connections. Evangelists are a temporary status and can change from product to product. This means that an Evangelist for product A may be a silent client for product B. Mavens (trusted expert) can also become Evangelists if the need of the person is a very specific product. These evangelists are driven by their desire to pass technical information.

It is important to note that not all evangelists are customers or clients. It is entirely possible to create an evangelist that is a trusted adviser to the prospect. Common examples of this are CPAs or Attorneys that often recommend items to their clients when they see a need. In some cases, campaigns with the goal of communicating to potential evangelist segments make good business sense.

Negative Flow

Referrals can be positive or negative based on the experience they are communicating.  Negative flow can happen when you create an evangelist with a negative experience and they distribute that. Many studies show that the typical negative experience will get distributed to 12 people, while a positive experience will reach one. This is not what you want to hear but referrals do work both ways. If the person involved is an evangelist, great care should be taken.

Time is like Gravity

Time pulls the person to lower levels within the classification. An example of this is a customer that does not repurchase and drops back to prospect status.  The reason this is important to understand is that while we might want to earn a level and stay there, that is not how it works.

Paying for Referrals

One common idea about referrals is to pay for more of them. This idea almost never works but it often looks like it does. The reason it can look like it works is that when the referral happens and an incentive is available, it is often claimed. It is likely that an incentive to some customers will result in an action but you have to ask yourself how powerful the referral will be if it was motivated by money. Are you in fact paying for what will happen naturally? I would contend that in many cases, paying for referrals does not create a referral but they do create a marketplace for them.

Moving People through the System

From To How
Suspect Prospect Active: Create awareness that serves a want or needPassive: Find data that indicates a product want or need fit
Prospect Customer Create desire to service a want or need
Customer Client Create a trust relationship
Client Evangelist Have a trust relationship with social connector and get lucky enough that they become aware of a friend’s want or need that is served by your product or service
CustomerClientEvangelist Prospect More than one business cycle without a business interaction.

 

In the marketing plan for the business, each of these areas needs a campaign to serve these movements. Each stage of this process

Glossary:

The Market: Everyone

Suspects: Someone who could do business with you.

Prospects: Someone who has demonstrated some interest in your product/service.

Customers: Someone who has purchased your product or service.

Clients: A customer that will continue to do business even if you do something wrong.

Evangelist: A person that tells others about you. Can be a customer, client, or other trusted adviser. This is also known as a Brand Advocate in some circles.

Mavens:  a trusted expert in a particular field, who seeks to pass knowledge on to others.

Social Connectors:  people in a community who know large numbers of people and who are in the habit of making introductions.

How to Create a Winning Search Campaign Strategy

Posted by Bob Dumouchel in adwords expert

Friday, May 29th, 2015

chess - protectingOne of the building blocks of a digital marketing strategy are the PPC Search Campaigns. In this article, we are going to discuss the components and trade-offs that we consider as we build an account strategy document. Regardless of the sophistication of your marketing plan, documenting and then measuring to the plan is one of the fundamentals.  Included with this is a sample of the form we use to record and present our strategies to our clients.

I would like to warn the reader in advance that this is a long article because the topic is complex and the issues are nuanced. If you are looking for a simple answer to your marketing plan, this is not your article. Many people want marketing to be fast, free, and easy and it is none of these.

In a search strategy, many of the elements of the plan are connected to each other so moving one will either directly or indirectly move other values. A simple example of this is that moving the CPA $ Target will very directly change the CPA Unit Target because budget divided by CPA$ = Conversions. Other relationships are softer such as the balance between quality and quantity.

Documenting your Business Persona

Developing a plan requires that we understand the balance decisions the business has made because the plan has to fit the business and it is not one size fits all. We will discuss each attribute in detail but first you need to understand what a balance decision is. In making marketing decisions, we have to understand the priorities of the business and we represent this in the marketing attribute. These are designed to be items that are routinely connected to each other with decisions that exist not in a yes and no format but rather in a scale from one side to the other. For example, many times in marketing we face the compromise of quality and quantity.  As the quality of the keywords goes up, the quantity goes down. These relationships are elastic not mechanical so moving one side does not always move the other equally so there is always room for improvement or leverage in the relationship. Let’s explore each attribute and remember that there is no right or wrong answers here.

 

Attribute Score Attribute
Quantity Keywords 1–2–3–4–5–6–7–8–9 Keywords Quality
Transaction Volume 1–2–3–4–5–6–7–8–9 Cost Savings
Formal  Image 1–2–3–4–5–6–7–8–9 Personal Service
Conservative 1–2–3–4–5–6–7–8–9 Experimental
Control 1–2–3–4–5–6–7–8–9 Growth
Relationship 1–2–3–4–5–6–7–8–9 Transaction
Monitor Competitors 1–2–3–4–5–6–7–8–9 Self-Improvement
Aggressive 1–2–3–4–5–6–7–8–9 Passive
Male 1–2–3–4–5–6–7–8–9 Female
Direct Response 1–2–3–4–5–6–7–8–9 Brand
Center of Attention 1–2–3–4–5–6–7–8–9 Observer
Professional 1–2–3–4–5–6–7–8–9 Fun & Friendly
Revenue Growth 1–2–3–4–5–6–7–8–9 Cut Costs
CPA 1–2–3–4–5–6–7–8–9 Budget

 

Quantity Keywords vs. Keywords Quality

Quality and Quantity are often in conflict and in the area of keywords it is very pronounced. What we find in most cases is that keywords exists in layers of match to the business and the farther away from the business the keyword gets, the weaker the performance but the higher the volume. A simple example of this is the word plumber for a plumbing business. Let’s look at what that data might look like:

 

Keyword Monthly Searches
plumber 90500
plumbers near me 8100
joe the plumber 8100
plumber salary 6600
plumbers merchants 6600
plumbers putty 5400
local plumbers 5400
plumbers supply 5400
plumbers tape 4400
plumbers crack 3600
the plumber 2900
how to become a plumber 2900
mr plumber 2400
plumbers mate 2400
plumber singapore 1900

 

This pattern is common with the broad keyword having a high volume of traffic compared to the more specific searches. The thing for the plumber is that some of these more specific words are better or worse depending on the business we are talking about. For example, a plumbing business would hate plumber salary and this would be a common negative but a school that teaches plumbing is going to love that search. The general rule here is that the more specific the keyword (higher quality) the lower the quantity will be. The higher the volume, the more in love or in hate the business is likely to be with that word.

 

Transaction Volume vs. Cost Savings

Another version of the quality and quantity issue this is related to money rather than keywords. Almost every business will want as much transaction volume as they can get but at some point the transactions start to become too expensive. This value is controlled within the system with the keyword model and cost per click but it is also influenced by other things such as Ad Copy. The advertisement can be written to call the person to action or to filter to the better traffic – what we call a filter ad. An example of this was a computer consultant that did large scale projects. His target word was “Computer Consultant” but that keyword included traffic that did not fit his business and he was getting calls for very small projects. By changing the ad to include a qualifier of “Projects starting as low $10k” this dropped the volume but increased the cost per click because the quality score was impacted by the lower click through rate.

Formal Image vs. Personal Service

This impacts the website or landing page design much more than the search campaign but it can help focus the messaging and keywords. As a business becomes more formal in their communications they lose the personal touch. Examples of this are often related to the size or image size of the business. Many small businesses want to be seen as big businesses and many large ones want to be seen as providing a personal touch. The personal messaging would be a site like ours where we list the individual people that will be serving your account while a company like IBM would never do that. IBM’s advantage is in the dependability that the formal image creates in the market place and there is an old saying in the computer industry that nobody ever got fired for recommending IBM. On the other side IBM is not where you go for raw innovation.

Conservative vs. Experimental

Conservative in this content means that the persona leans toward things they can depend on. These are tried and true approaches that create dependable responses. What they do not do is create surprise or large leverage because everyone knows about them. They have been studied and written on and to some degree this connects to the lifecycle of a product with mature products being conservative (proven products) but new products being experimental. To some degree, this is an evaluation of risk aversion.

Control vs. Growth

There are many ways to manage your marketing and again this is a growth versus dependability balance. Growth at all costs can bankrupt the business but you can also save yourself out of business as well.

Relationship vs. Transaction

This is one of the big ones and it goes to the model of the marketing plan and there is not a right or wrong on this. On one end of the spectrum is the relationship sale where the business invests in building and culturing the relationship. This results in a higher cost in most cases but the benefit for the business is in the repeated business. These businesses might lose money on the first order but they make it up in the lifetime value of the customer. On the transactional side, you have businesses that sell a customer one time and move on and in those cases the transactional cost is crucial to surviving as a business. When a business is more on the relationship side of the marketing plan, there will be more investment in brand building and less in late stage search.

Monitor Competitors vs. Self-Improvement

This persona attribute goes to the way businesses look at competition. On the monitor side, they spend resources monitoring and responding to their competitors and over the years we have had clients that were almost obsessive on this attribute. The monitor attribute watches and reacts to competitor movement. On the other side is self-improvement meaning that the business focuses on and competes with itself and works to be better today than it was yesterday with little attention to competitors. This does not mean that they are not watching but it indicates the degree of reaction.

Aggressive vs. Passive

Some businesses really rock the boat and have very aggressive planning in their marketing while others are more laid back with a calm persona that some customers like. The draw back with the aggressive mode is that it alienates some percentage of the audience.

Male vs. Female

While it might not be PC the fact is that gender matters in marketing. While never true for all members of any group, the genders do react differently to different things. This attribute setting is the best guess of the business as to how their customer base breaks down by gender. In the past, we worked with a company in the computer industry and the starting assumption was that the industry was dominated by men. However when we actually studied their customer base we found that the decision makers were largely women. This surprised the business and the assumption is that while the industry was 80% male the product was more accepted by women resulting in 65% of their customers being women. Like all things in marketing, you have to be very careful about things that you think you know.

Direct Response vs. Brand

Direct response is the investment in creating transactions while the other side is the longer term investment in brand building. Branding is more faith based than direct measurable response and different people value this in different ways. The idea of this attribute is to express that balance.

Center of Attention vs. Observer

The internet like any other social interaction have a range of players and in marketing you have to decide where on that spectrum you want your business. I will be the first to admit that most of us like being the center of attention but I would point out that trying too hard to be the center of attention can come off poorly.

Professional vs. Fun & Friendly

Marketing is about painting an image of your business and the decision of where on the spectrum you want to be is important. Here the decision has great impact on the creative elements of the plan and helps guide them on the type of image they are paint. For professional think large formal businesses like IBM and think GoDaddy or Carls where the creative is much more creative.

Revenue Growth vs. Cut Costs

It is said that there are two classic ways to manage revenue. You either push revenue growth or you cut costs and the reality is that you do both. The question here is not are these important but rather how you balance these areas. Pushing revenue growth at all costs is a model that you see in a business like Amazon. The cost cutting pressure often comes from the financial side of the business, think from the office of the CFO.

CPA (Cost per Acquisition) vs. Budget

This loosely translates into how much cash or credit do you have available and how fast you want to grow. At the CPA end of the spectrum, the budget can increase as much as needed as long as it meets the target CPA. The budget side indicates that cash is not unlimited and that growth is constrained by this.  Some businesses operate on a budget basis and that is the ruling attribute. It is normal for organizations like Non-Profits and Government agencies to be bound by an absolute budget bringing them all the way to this side. For-profit businesses with a CPA target that is stand-alone profitable generally have no consideration for a budget. The middle of the range comes in cases where the transaction is not profitable immediately and in this situation, the balance is driven by the available cash to fund growth.

Summary of Attributes

This part of the strategy is to get you thinking about the high level items that drive the low level decisions that we will go through next. There is no right or wrong answers because what you are trying to get your mind around of the attributes of how you want to play the game.

Search Campaign Form

Below is a form that we use internally to record the basic strategy that our AdWords Experts use to apply to each account. This forms the guidelines for the account which is then modified based on the AdWords Expert’s experience. While we someday hope to be able to automate this process, that is likely well in to the future because AdWords only looks simple. The reality is that language is complicated especially when it get to trying to express the intent of the searcher. Keywords do not exist in a black and white world but rather in a universe of grays. It is this interpretation of the meaning of language based on the audience profile that makes AdWords an art not a science. A simple way to think about this is the statement:

What I said is not what you heard and not what I meant.

When we fall into the trap of talking about data as if it were accurate, please realize that all marketing data are clues and not facts. As a clue, data events need additional clues to increase our confidence in what they say and experience to understand what they mean.

 

The detailed discussion of each element is in the comments column of the form. After completing the strategy, the comments are normally removed and replaces with any special consideration of that item.

Search Network – Google

  Value Comments
Campaign Description Plumber LA The description of the campaign. The guideline for this is to use a campaign name that instantly tells the person at a very high level what to expect in this campaign.
Budget $5,000 The starting budget is always a complicated discussion. This is your starting bet in the AdWords system and it needs to be large enough to prove the channel works for your business but small enough that you contain the risk to an acceptable level. In most cases, we want a business plan for a minimum of 10 planned conversions per month over a 4 month test period. At this level, we find that the account will normally continue performing when you turn up the budget from test to production.
Budget Constrained Type $$$ This indicates the type of budget we are working with. The symbols we use here a “$$$” or “CPA”. The $$$ means that the account is constrained by the budget with a fixed dollar amount budget. The CPA indicates that the budget can be increased if it is making its CPA goal.

Targets

CPA $ $50 From the CPA calculation
CPA Unit 100 CPA unit is simply the budget divided by the CPA and it represents the unit volume that is in the plan. If this number is less than 10, you need to rethink the plan because of the low level of dependability of the numbers.
CPC Target $1.20 From the CPA calculation
Conversion Rate 2% From the CPA Calculation
CTR – Top 1% The CTR (Click Through Rate) is important because of its impact on the Quality Score. Your actual bid in simple terms is your bid times your quality score and the biggest factor in your quality score is the CTR. In the olden days when Google was more transparent than today, they would disable keywords with low CTRs but today they just charge you more. The top position has a much better CTR than the side, which is why we separate these items.
CTR– Side .5% The CTR – Side is the minimum level that we want from ads on the side of the SERP. The drop from the top to side positions is often 10x or more but it is drops too low your traffic starts to be come at risk and the quality scores will suffer.
Quality Score >3 Quality score is the other form of money in the AdWords system and managing it carefully is critical. This setting tells the AdWords Expert that any score 3 or lower requires some form of action. Quality score is a simple as SEO, Cold Fusion, and taxes (meaning not simple at ALL!!!). Google tells us that keyword relevancy, ad copy, and landing page experience are the major parts of QS but it is not that simple.Typically, when a keyword hits this limit we isolate the keyword and try ad copy that more closely fits the keyword. If that does not work, we will work with the SEO/Web Designer to try and improve the landing page match to the keyword. If both of those fail, we will normally remove the keyword and add it as a negative to the account. This negative typically will go into a negative list separate from the master list so we know that the keyword was a QS problem not a normal negative.
KW Max Spend The Keyword Maximum Spend with Zero Conversions is the point at which we give up on a keyword. Our normal rule here is what we call the Rule of 4. Simply stated if the keyword fails to convert after 4 expected conversions then kill the keyword. In our example, we have $1.00 Cost Per Click (CPC) and a 2% conversion rate. Based on this, we expect a conversion for every $50 spent. This means that our rule of 4 would give us $200 for this setting.
Position Converters 2 Position targets can, and typically are, more complex than this simple example. What we are doing is clustering keywords into defined classes and then targeting a position for that keyword class. In this example, we have two keyword classes. One for words that convert within the CPA target and one for words that do not convert within the CPA target. When we perform a bid review, we change bids based on this target position. If the position is too high, then we increase the bids the percentage given on the bid. If you have multiple conversion types or different margin classes, this position discussion can get complicated in a hurry.
Position All Others 5 Another keyword class – see discussion above
Untracked Conversion % 50% A conversion is a measured step that creates value for the business. The common examples of this are orders, leads, subscriptions, or reading certain content. The problem is that not everything can be measured and not everything in marketing is a do this create that relationship. The untracked conversions are the ones that happen outside the measurement ability of the AdWords system.Our example here is for a plumber and it is a great conversion if the person goes to the website, picks up the phone, and calls. The problem is that AdWords cannot track that but it did contribute to the call. This is an important factor when you calculating the target CPC and other things impacted by the conversion rate. We have seen many client situations where the untracked conversions applied to different keywords and knowing this number has kept keywords active and aggressively bid even through the data said they should be killed.
Conversion Types Appointment Defines the types of conversions being targeted by the campaign. It is common to have multiple types of conversion with different values for the business so again this can complicate the bidding and position strategies within the account. For example, it is common to have a very different value for a lead and order within the same account.
Landing Pages Yes Indicates if there are specific landing pages to map keyword or ad groups to. In the comment section of the form, we normally include the full URLs and the common description of the page. Staying with our plumber example a landing page might exist for Water Heaters because these conversions have a high value.
CMS Content Management System indicates what system we are working with for the page content. This can impact our quality scores and other specialized considerations.
Primary Website In this section, we list the primary and any specialized websites that might exist.

Keywords

Primary Keywords Plumber Includes in the comment section a description of the primary keywords. In our example of a plumber, this would read Plumber. We know that this will result in thousands of keywords but this is the strategy so we just need know the big things.
Primary Negatives Plumber Everyone knows their keywords but many do not really think about their negatives and this is critical to the strategy. If you remove poor match searches from your account, you reduce the impressions but keep the clicks this drive up the CTR and the QS and this improves the value of your money. In the case of our example, we have a negative keyword list for that specific industry so we just use that list.
 
Keyword Classes Keyword Classes are broad groups of keywords that are either important as a positive or negative keyword set based on the type of business. In our example, this is a plumber so things like DIY traffic are a negative however if the Plumber had a parts business the DIY traffic might be great for them.
DIY Negative DIY (Do it yourself) traffic are people searching for how to information and for a service provider like a plumber, this is normally bad traffic. But that is not true in all keywords. For example, a consumer searching for how to install water heaters might change from DIY to a service need if the project goes sideways on them. While we would generally be negative on these keywords, there could be some business value in them. It would certainly not as valuable as “Water Heater Installation” or “Plumber to Install Water Heater” but there could be some value.
Instructional Negative This class includes things like schools, course, books, etc… While this is great traffic for some, generally a service provider does not want this traffic.
Location Yes This is an extension of primary keywords and indicates if they should be extended by the location name. For any local service business like a Plumber, this is a critical extension of the keyword because things like Plumber and the city name are the money words. Because these are so critical to local service providers, you need to research the local area to see if there is any slang terms being used. For example, in our area in central California our major city is San Luis Obispo but locals call it SLO (pronounced Slow). The location name of SLO is not on any city list but it is very important to a service provider like a Plumber.
Service Yes Service keywords are extensions of a base word and are often called service qualifiers. Examples of this are words like install, repair, or service and when based on a product such as a garbage disposal the keyword goes form product to service.
Product Maybe Products are an interesting class of keywords that are often not good for some businesses but this is language so you have to think past the simple concept of good and bad. A plumber for example might like the search for Water Heater but not like Water Faucet. The logic here is that a greater percentage of Water Heater searches will engage professional installation services because of the risks and complexity of the installation. However a large number of home owners might attempt the installation of a faucet.
Competitor Name/Brand No This is a class of keywords that some people like and others do not and it depends on your perspective. For a Plumber, an example of this would be a word like Roto-Rooter. Because this is a trademark you will not be able to use this within the ad copy so your quality score will suffer and you will have to bid a lot more for your position. On the other hand, any business that comes from that could be considered a competitive win, which is my favorite type of deal. If you use this class of keywords, you will at some point get a letter from a lawyer telling you to cease and desist so there is risk in this one. We are not a legal resource so when a client says they want to do this we tell them they will have no problem in the AdWords system but that they should talk to their lawyer to understand the risk in court. Our experience in the past has been that when the letter comes and you remove the keyword, the problem typically goes away.
Early Stage No Early stage keywords are searches that you expect early in the purchase cycle. These include extensions with words like “review”. Staying with our Plumber example a search for “Tankless Water Heater Reviews” is early stage and “Tankless Water Heater Quote” is a late stage keyword.

Networks

Bing Network No This indicates if we want to chase additional volume in the Microsoft AdCenter aka Bing. The Bing network uses most of the same strategies, but the results are not identical. Our typical approach to this is to buy all the traffic we can in Google before we open Bing.  When you open this network, you double the account management time for approximately half the additional volume. This is why we almost always start with Google and do Bing only if there is no additional volume in Google.
Search Partners Yes Search partners are other search engines that get their ads from Google. This setting is one of those where Google always wins because you can turn off the search partners if they perform lower than Google but you cannot turn off Google and run a search partner only setting.
Remarketing Yes Search is by far the most expensive type of traffic and the majority of it arrives at the site and does not react the way we want. Remarketing is a strategy for bringing back visitors for a second time at a lower cost. When they conducted the initial qualified search they proved they were someone we were interested in and remarketing is a good way to work on bringing a qualified audience back.
Display Network No This is another feature that is not part of the search campaign but sometimes can be useful. This simply lets the AdWords Expert know to watch out for interactions from the Display Network. Both Display and Remarketing can be useful because they create a list of sites that the audience is going to and that can help get more creative in the keyword model.
Mobile Yes Mobile traffic is an option and it is good for some things and not so good for other things. If the mobile setting is yes, then we need to make sure that we examine the landing pages in large and small screen sizes.
Time Schedule Yes Indicates if the time setting is something other than 24/7. When it is something other than 24/7, the comment section of the form has a description of the schedule and the logic behind having this setting. There are many considerations in the time schedule and we could write an article on this alone.
Geo-Target Yes This is almost always yes unless the campaign is Global in scope. The comment section will contain a brief narrative describing the target. When thinking about the geo-target, we have to remember that the larger the target the lower the response is likely to be and the wider the compromises are. With most businesses, the farther you get from their location the weaker the response tends to be. This is not universally true but it is generally correct.If you have a geo-target, then you should make sure that you have either a filter or a segment in Google Analytics. It makes no sense for a plumber to have out of location traffic in the data that they consider when they measure their business.
Geo-Target Bidding No Geo-bidding is common and since our example is a plumber we will discuss how this applies to that specific situation. Plumbers are local service providers and the farther from their base location, the lower the response tends to be. This setting lets us address this by bidding more in their home city and less in the adjoining ones. It is also common to have a list of 10-12 cities that they operate in and in conversation with them; we often discover that certain cities are just better leads. This could be because of income differences or many other factors but the reality is some locations just fit the business better. Bidding more in those or less in others is often a good idea.

Extensions

Advertising extensions are generally speaking a good idea but not in all cases. In general, they make the ad larger and larger ads normally get more clicks. The draw back to these are when the extension becomes a distraction to the traffic or simply do not work. For example, if you have a simple site and you want to deliver a specific message, site links taking the person somewhere else in the site can be a problem. It is important to realize that on extensions, the settings are more like a suggestion not a rule. Extensions appear when you have them set up and Google thinks it’s a good idea.
·         Site Link Yes Site links are ad extensions to the ads that can send traffic to up to 4 locations within the site. Normally, the consideration here is that the location pointed to has to be worth paying for the traffic and normally we want a different part of the marketing message in the link. This is not to be confused with the site links on an organic listing, which comes from webmaster tools not AdWords.
·         Location No Location extensions add a physical location to the ad and for a retail store this could be a great idea. However our example client is a Plumber and they rarely want someone to show up at their offices since their services are provided on-site. This does not mean that this is always no for on-site services because it can improve response to your ad. People like their service providers to be local and this extension screams “WE ARE LOCAL”.
·         Phone Yes If you want the phone to ring, this is a great extension because that is exactly what this does. For most businesses, this is a good idea except for e-commerce sites that want everything to go through the site.
·         Call Out Yes Much like the site link extensions except the intent here is to call out features or benefits. These extend the size of the ad and generally are a good idea unless the call out becomes a distraction to the ad copy.
·         Reviews Yes This is one that many overlook or skip because they do not have the reference needed to make it work. The intent of this link is not to connect to reviews like Yelp or Google+ but to connect to articles that review your business. These connections need to have a link to your website so you do not send qualified traffic down a dead end. One common recommendation here is a connection to your BBB ranking but think carefully about that. It is very possible to set up traffic to the BBB that you pay for but that does not respond to your specific business offer. In most cases, this would be a good idea but you need to make sure it fits for your business.

Site Analytics

·         Google Analytics Yes Running a website without Google Analytics should be a crime unless you have some other tool to take its place. This indicates to the AdWords Expert that they should be looking for extended data about the traffic in Google Analytics.
·         Ecommerce Tracking No E-commerce tracking is a great idea for anyone who is selling a product online. Since our example in this case is a Plumber and they rarely sell products, this will typically be no, unless they sell parts. If the site is an e-commerce site, then this integration should be in place
·         Google Analytics Goal Tracking Yes Goal tracking is a really good idea for almost every business. In our example case of a Plumber, if they have a response form then goal tracking should be yes. Goal tracking, unlike conversion tracking, will track all types of traffic allowing you to see goals in direct, organic, referral, and AdWords.
·         Conversion Tracking Yes If you have a measurable conversion then this should be yes. If you do not have a measurable conversion, you need to explore things of value that you can measure. This goes to the simple management 1.01 rule that states “Measure and it shall improve”.
·         Google Analytics Filters Yes This lets the AdWords Expert know that filters exist in the Google Analytics data so they understand what they are seeing. Filters are great but they are also very difficult to remember. This keeps the fact they exist in front of the person managing the account.
·         Bounce Design No A bounce is where a person visits one page on your site and then leaves. Depending on the design of your site, this may or may not be a bad thing. A site designed for bounce are typically what we call “My way or the Highway Pages.” They are typically squeeze pages designed to get one response, normally an order, and if they do not go that way, they leave. We are not big fans of this design approach but we do know that in some cases it is the best design.
·         Bounce Rate N/A The target bounce rate is the level at which the AdWords Expert should become concerned with this factor. Assuming that the pages are designed to engage the audience, sometimes the bounce rate is an important measure. One type of bounce that some people fail to consider is the positive response bounce. A visitor comes to your site, picks up the phone, and then calls the business. Technically this is a bounce but it is also one of the goals of the campaign so it is a good thing not a bad thing.
·         Length Per Visit 2 minutes Length of time on the site is often an important measure of traffic quality and if it is, then that is recorded here.
·         Pages Per Visit N/A Pages per visit is another measurement of traffic quality. This goal depends on the website design as visiting additional pages is sometime not in the design spec.

 

 

 

 

CPA Calculation

This form provides a step by step process to get from the conversion value to the bidding range for the strategy. It is important to understand this flow and where the challenges in your assumptions exist. The discussion here is a simple example of the value created, which becomes a more interesting discussion if your business value is over the lifetime of the customer. This simple transaction model does not work for all businesses and in reality it works for very few but it is good place to start.

It Varies

We have worked with hundreds of clients and helped guide them through this process and one of the common statements to many of the items is that “It Varies.” Of course it varies but what we are looking for is the average not a specific transactional amount. If it varies too much and you can separate the traffic, then it is best to have a separate strategy for each class of transaction. Keeping with our Plumber example, a Water Heater is a large ticket item compared to a simple service call. Since the traffic can be separated by keyword, a separate campaign strategy may be in order.

 

Items Type Remarks
Description of Conversion Value Sale It is common to have more than one type of conversion and this is where we record the type and any extended definition the AdWords Expert might need. The common types are sales, leads, subscriptions, reading specific content, or spending a minimum amount of time on the site.
Average Order or Conversion Value $200 Here is the first tough question. For businesses with a long track record, they will typically know their average order but for newer businesses, it is more of a challenge. One common answer that you just cannot accept is that it varies. For our Plumber this number is typically the average service ticket value.
Gross Profit % 50% The average gross profit of the transaction gives us the dollar amount of the next line.
Gross Profit $ $100 Average Order * Gross Profit%
Lead Percentage 100% Lead percentage is the percentage of leads that become orders. This factor accounts for the lost leads in this process. In business, this is often called a close ratio and is expressed as one in three. If the process does not have this step, then the percentage is expressed as 100% to pass the amount through this part of the process.
Lead Value $100 Gross Profit$ * Lead Percentage
Marketing Cost Allocation % 50% This is the tough one and the question is: How much of the gross profit would you spend to generate the business. This conversation is difficult because the initial answer is as little as possible but that is before they realize that the higher this number is, the more aggressive you can be in the market and the more volume they will do. Another way to go after this same item is to ask them “How much do you think your competitor would pay to get this order away from you?”There are lots of examples where this number is greater than 100% and they happen often in subscription sales models or others where the lifetime value of the customer is the true driver of the market.
Target CPA $50 Gross Profit $ * Marketing Cost Allocation %
Conversion Rate 20% Conversions / ClicksThis is often an estimate unless the client has history to base this on. This number can vary widely from client to client but you will find that most competitors experience the same rate. We also find that specific types of sites often have similar ranges. For example, over the years we have found that most e-commerce site will range from 2%-5%. Our example is a plumber and we do lots of these so we know that the combined response rate from a good keyword set will be in the range of about 20% including both online and phone call responses.
Target CPC $10.00 CPA * Conversion Rate – This factor is simple math and you can think about it a few ways but the result is the same. I often think of the conversion rate as a ratio so a 2% conversion rate means that I will get one conversion for each 50 visitors. Regardless of how you chose to remember this, the end result is the same.
Auction Discount 20% Default 20% – The simple way to think about your bid is that you pay one penny more than the advertiser behind you. This means that what you actually pay is almost always less than what you bid and we call this difference the auction discount. While this percentage can vary, 20% is a typical number. If you did not add this back to your bid then you would be bidding too low for your plan.
Target Bid $12.00 CPC + Auction Discount (cpc * 1.20)  – The target bid ads back the auction discount.
Max Bid $24.00 2x Target Bid – The maximum bid is normally 2 times the target bid because the target is an average and to hit the average you need some bids above this. This gives you more room to operate on the account. The max bid is normally reserved only for words that perform or in the early days the ones we think are most likely to create results.

 

Positional Strategy – Search Network Google

This form is used to record the positional strategy and its connection to the bid decisions. The data should be comfortable by now but a few things are not as they might appear on the surface. The date range at the bottom is not the date range of the keyword class of converters. Converters means that they have converted at a CPA less than the target CPA. Because conversions can be very low volume events this is not as easy as it first seems. For example a converter might have one conversion at $40 in spend but currently is up to $85 and it is still within the target. This is why you label these keywords rather than filtering them. The $85 CPA in this case could convert on the next click instantly changing the CPA to $42.50. For low volume conversion keywords, you have to let the CPA grow to 2-3 times the target CPA before you demote the keyword to the “Others” class.

 

High volume keywords are simpler to handle but again you have to accept some CPA’s above your target because the $50 CPA is an average so at the keyword level a $100 CPA is acceptable assuming you have some other converters that keep your average below the $50 target.

 

The column heading of GT (Greater Than) or LT (Less Than) are numbers used in the filter to isolate the keywords that need adjustment. The Action column indicates Inc (Increase the Bid) or Dec (Decrease the Bid) and the percentage. The net effect of applying this is that the bids will work their way into the position targets. Again this is a very simple example and the class definitions can certainly be more complex than the examples given here.

 

Keyword Class:  Converters

Position Goal: 2
Target CPA $50
Max CPC: $24
Max Bid: $30
Date Range: Since last bid adjustment
GT LT Action
1.0 1.7 Decrease 2%
1.8 2.2 Target
2.3 5.0 Increase 3%
4.1 INF Increase 8%

 

Keyword Class: Others – Unproven

Position Goal: 5
Target CPA $50
Max CPC: $2.00
Max Bid: $3.50
Date Range: Since last bid adjustment
GT LT Action
1 3.9 Decrease 2%
4.0 6.0 Target
6.1 8.0 Increase 3%
8.1 INF Increase 8%

 

In closing, I would like to point out that this is a simple strategy and the complexity can increase quickly when you introduce more variables. Next month, we will write on how to audit your strategy to make sure it is structurally sound and reaching the goals you set for it.

After posting this article the formatting lost lots so if you need a more usable form for your strategy please email me and I will send it to you in Microsoft Word format. bob@smsrd.com