Two of the main advantages that PPC has over other forms of advertising are transparency and control.
You can see exactly where you are advertising, and control the amount that you pay per conversion with great precision. If you know your conversion rate then you can adjust your cost per click to get any CPA that you want.
When advertisers use Google’s Display Network, it’s inevitable that many apply the same logic to it. They have a target CPA, they know the conversion rate, and so they set the bids accordingly.
But is this the right way to go about it? Many advertisers advertise using banner networks, and it appears that the psychology is very different outside the AdWords environment.
Advert testing is critical to the continuous improvement of an Adwords campaign. It’s a reasonable bet that many of your competitors are testing new adverts, and hence improving their click through rates and conversion volumes over time.
Where do you think those clicks and sales are coming from?
In many ways, effective Adwords account management is a balancing act. Whether you’re trying to balance sales volumes with the cost per sale or trying to write a compelling advert whilst trying to stand out from your competitors, you’re often pulled in opposite directions.
I am often approached to appraise accounts for advertisers, and one of the most common problems that I see is also perhaps one of the most understandable, it’s the result of failing to find the balance between relevancy and optimisability.
Pay-per-click has a lot of things going for it as a marketing medium. Your adverts are only displayed to people that are actively looking for your product or service, and you can determine exactly what you are willing to pay for these clicks at a keyword level.
It’s not surprising then, that a lot of paid search advertisers have in the past viewed the Display Network with a degree of scepticism. After all, your adverts aren’t displayed to people actively looking for your product, and because the clicks generated come from hundreds or even thousands of different websites, it’s difficult to tailor your bids.
For many advertisers, the Display Network is very much a poor relation, and it’s remarkable how many don’t use it all.
A few months ago, Google released a couple of new alternatives to the 'maximum cost-per-click' bids on Adwords, called Preferred Bidding and Budget Optimiser.
Preferred Bidding allows you to specify how much you'd like to pay for each click on average, and Adwords will adjust your bids accordingly. Budget Optimiser takes your daily budget and tries to generate as many clicks as possible for your money.
But is this really what you want to be doing? Both of these options are set at campaign level, and neither looks at the conversion rate of individual keywords or Adgroups, or indeed the value of a conversion.
As the owner of a search marketing agency, I am constantly trying to find ways of increasing the awareness of search within the marketing community.
For too long now search marketing agencies have hidden their knowledge behind a wall of technical jargon in an attempt to keep ownership of these techniques, but this practice is holding back the growth of our industry.