By Tim Giles
In web jargon PPC stands for Pay Per Click. It should also stand for Premature Poultry Counting. As a measure of return on investment it is fundamentally flawed and if viewed in isolation can overlook many rotten eggs putrefying in the nest. It is a useful indicator but it can be undermined by misunderstanding, exaggeration and outright bullshit. Being forewarned is the best way to keep a Google omelette off your face. This article can be found in the June Edition of Marketing Magazine
 As a web marketing professional saying such things is often akin to blasphemy. The online business world is so addicted to the mother's milk of click through revenue that it sits on a knife-edge that has webmasters and marketing managers jumping at shadows. The real question is not how many visitors are landing on your website from Google Adwords, but what percentage of arrivals are hanging around long enough to read your pitch and of them how many are interested enough to take some sort of action. It is the businesses that wallpaper over poor site interest and engagement capacities by paying for traffic volume without a Plan B that find themselves exposed to manipulation. It is often easier to try and find excuses in a flawed delivery system than to face the mirror and take a good hard look at your site.
Looking at PPC in isolation is like judging your Yellow Pages ad without bothering to check whether anyone answers the phone when it rings. An effective PPC campaign is a cumulative factor of good keyword choice, smart bidding, enticing offers and great service once customers arrive on site. Counting chickens or clicks without regard to how a potential online sale is incubated by your website can be very misleading. Your first question should always be to ask if the web strategy is set up to not only maximise delivery of customers to the site but through it to your sales team, irrespective of whether this is virtual or human.
Home Truth # 1: It's the Website Stupid!
Make no mistake click fraud exists. Even Google acknowledges this and has recently settled a class action in the US in a pre-emptive move to head off the bad guys at the pass. They maintain, however that such fraud accounts for only 1% of ad sales. Others in the industry add a zero to that estimate. The point is that it is significant enough a risk for marketers to spend a bit of time thinking through how best to run campaigns. This is not necessarily a bad thing. There is rarely a true set and forget marketing cure all. Risk is inherent in all marketing endeavours. True, a competitor may risk later life carpel tunnel syndrome by clicking on your Google link ad infinitum, but they might also gather all your reply paid envelopes in your direct mail out and tape them to bricks.
Google for their part assure the marketplace that they have systems and checks in place to detect fraud. It is highly likely that the frenetic mouse clicker will be detected and discounted, however how they go about stopping your ad code being wrapped in a link behind a photo of a busty blonde in an Ukrainian porn gallery or some automated bot bouncing around different IP addresses causing mischief is less clear.
To my mind, however the main danger surrounding PPC is misrepresentation and ignorance. Perhaps if the reps pounding the streets for search marketing agencies had gold teeth and wore cheap polyester suits like the cliche of their used car salesmen cousins, businesses would at least kick a few tyres before signing off on trust. US research reveals that over 70% of new arrivals don't get past the home page. Given the prominent role that search engines play in guiding people around online this figure must also reflect a disparity between what a searcher assumes from a link on a results page and the end result once they arrive on site. On the web people test and sample. They dip their toes in the water. They abort or engage on a whim. So that means that most of the people that you are forking out your hard earned dollars to get delivered are probably not going to buy from you. This is nothing earth-shattering, it is a common marketing truth. Most of the people who see your TV ad or drive past your billboard are not going to buy from you either. The art is in working the percentages and choosing the time and the place to fight your battles. This is a question of quality and usefulness not numbers.
The real danger with PPC is in having campaigns run at cross purposes. The main flash point for this is regarding the definition of conversion and the choice of target terms to play. For a search engine marketing company a high converting keyword is one that generates the maximum number of clicks. For a web business a high converting keyword is one that delivers potential customers that they can actually sell to. These are not always the same thing.
Home Truth #2: Agencies will spend 100% of your budget.
I once sat in on a meeting with a client where a search marketing agency proudly boasted their high 'conversion' rate on Google. According to their viewpoint they had over delivered on their referrals and were hankering for an extension with a kick in budget. True they had sparked an increase in traffic and the numbers of eyeballs was in excess of the agreed target, but the vast majority of the arrivals were from overseas. For a company that only serviced metropolitan Sydney this was a huge extravagance. For a spend of over $1500 per month they had only one $50 sale that they could track as having resulted from the campaign. The problem was the keyword choice. To exclude the foreigners meant qualifying the terms targeted with strict location combinations, which in turn reduced the pool of available searchers and by extension the chances of the agency continuing to deliver in such quantity. This is the fatal flaw in leveraging your web marketing too heavily on PPC. Success is about quality not volume. For any given product or service there is only a finite number of people using the web in a position to buy it. The extent of this will depend upon what you are selling and your ability to get it to them. There might very well be tens of thousands of people searching for your key product term worldwide but how many of them are actually living where you can service them? Adjust accordingly.
Home Truth #3: Some kids in the playground don't play nice.
To paraphrase a TISM song from the eighties "Web business is not a jungle, it's a Primary School playground". It is immature, it is bitchy, it is mean. Friendships and alliances can be cast aside on a whim for shiny trinkets and a chance to be popular. Search engine forum discussion threads are full of hard luck stories about naive business owners that have been savaged by the Big Bad Wolves of e-commerce who hide behind their cloaks of anonymity.
"Oh what big fingers you have Grandma!"
"All the better for clicking on your Google Ads all day my dear."
Like all fairy tales there is an underlying universal truth and warning to be heeded. The sky isn't falling but in practice there are a number of ways that you can be bitten with paid links.
- Competitors can click on your ads (or arrange for them to be clicked) to blow your daily budget and remove you from the listings early in the day, or force you to pay through the nose to stay in the game.
- Google AdWords will by default farm your ads out to appear on third party sites as part of its AdSense system. There is a temptation for sites displaying these ads to artificially click or cause them to be clicked to earn a share of the PPC revenue.
- Clumsy and unfocused application of campaigns can result in delivering irrelevant traffic or those not in a position to buy (eg. Generic keywords delivering US customers to a site that can only sell to metro Melbourne)
- Chasing very popular generic terms can get you caught in bidding wars with multinational companies with larger budgets. If you fight outside your weight division chances are you will end up with a bloody nose.
- Aggressive search marketers can use automated tools to engage in tactics such as bid jamming, bid surfing and bid shadowing to ensure that you always pay more than them. Bid jamming involves using bid management software to bid one increment below a chosen competitor, bid surfing places bids at any specified price gaps within the top 5 positions where competition is the least active, and bid shadowing anchors your bid to a set margin above or below a chosen competitor. When two bidders go head to head with these tactics and systems the result can be a PPC bull market.
The best way to reduce the risk of being too exposed to PPC nasties is to pick your battles and set limits. Crunch the numbers and determine an appropriate ROI strategy. At Enedia, we recently helped a client launch a website into the UK market. They sell a number of products at different price points to discrete demographics with a wide variance in margin. The online market for their products and services is highly competitive but erratic. The target keywords were grouped according to each product category and ROI thresholds set accordingly on an individual basis. Emphasis was on the words with the highest potential yield versus spend.
Once this was done the key was to determine when to play and when to when to fold. The aim of the game is not to fight for position for the sake of it, but to maximise lead generation through strong ads and adhere to a strict abort strategy. Once the cost of acquisition reaches a certain point you might as well be ploughing that money into another marketing channel. Of course this does not in itself protect you from click fraud just the potential for blow out. Ultimately the key is strict monitoring and ensuring that both your ads and your site are set up to entice and funnel customers quickly to your engagement areas, whether this be a shopping cart, a media gallery, a booking system or a contact form. If enough customers are being channelled to these areas consistently then the odd dodgy click becomes irrelevant.
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