There’s a lot to know about paid search advertising.
To mark the release of Econsultancy’s newly updated PPC Best Practice Guide, I’ve pulled together a brief intro to KPIs, budgets and resourcing for paid search.
The full guide is more than 350-pages long and includes the basics of setting up a campaign, to more involved cross-channel strategy.
As with all marketing channels, PPC advertising should support clear goals (e.g. to increase donations) and objectives (e.g. increase web traffic to donation page).
Measuring success in meeting your objectives means choosing and tracking key performance indicators (KPIs).
The Econsultancy Best Practice Guide defines three types of KPI; volume, value and quality.
- Volume KPIs relate to the total traffic being driven to your website or through various functions of your website (e.g. email signups), as well as the makeup of that traffic (new or known visitors, mobile or desktop etc.).
- Value KPIs pertain to financial value, such as average order value or perhaps even attributed revenue in-store.
- Quality KPIs make up the rest, measuring how well your site is serving visitors. Though changes may not have been made to the site, if a more relevant audience is targeted, metrics such as conversion rate will improve.
The Best Practice Guide splits PPC budgeting into four main areas.
1. Budgeting strategy
This is top-level budgeting. How much money can you allocate to paid search overall and how does this compare to your other acquisition and retention channels?
You may have a fixed budget with which to prove the efficacy of PPC. Or perhaps budget is aligned to current category targets (hitting sales of different products or visibility of different parts of your site).
Budgets can also be tied to larger offline campaigns (such as TV advertising or in-store promotions), to new opportunities as they arise (such as new markets), or budgets can flex dependent on results (if PPC works, do more!).
Budgeting strategy also dictates which of the search and display networks you advertise across, and for which campaign.
How is your digital marketing budget split between the following channels or disciplines? (From Econsultancy’s 2015 Marketing Budgets Survey)
2. Positioning strategy
A company may decide to target high positions in the sponsored listings for certain keywords. This could be for branding purposes, for example.
However, with each campaign, keyword and keyword group subject to different competition and pricing, a more analytical approach should be more effective in maximising return on investment (ROI).
Many campaign variables are impacted by search position, and vice versa:
- Click-through rate (CTR) and click volume generally decrease with position.
- Click volume does not decrease in a linear fashion with position.
- Conversion rate can vary with position.
- The number of listings above the natural results varies according to the search term and device.
- A bid increase doesn’t necessarily ensure a higher average position on the page.
This chart shows AdWords CTR by position and device (via Forthea).
3. Bidding strategy
Bidding strategy is influenced by budgeting and positioning strategy, but is about optimising as much as possible for returns (balancing cost per click with total spend and conversion).
AdWords can automatically optimise for cost per click (CPC) and Google Conversion Optimiser can be used to optimise cost per acquisition (CPA).
Bid management tools can be used for larger campaigns, and attribution of value in other channels helps to elucidate the full value of PPC spend.
4. Bid adjustments
The final aspect of budgeting is a subset of bid strategy – bid adjustments.
Bid adjustments allow keyword bids to change automatically dependant on factors such as time of day, location and device.
Day-parting (changing bid level by time of day) is often used to increase bidding when conversion rate is at its highest.
Location of physical stores could be one factor that impacts bid adjustments by location.
Device-wise, advertisers should beware of focusing on desktop (which may have the majority of conversions) at the expense of targeting users in the research phase on mobile.
Indeed, Google offers estimations of cross-device conversions within AdWords reporting.
Variation in impressions and conversions by time of day (via PPC Hero).
Agency or in-house?
If you’re new to PPC, you may have to make a decision between taking the plunge on your own, or getting an agency involved to manage it for you.
There are many advantages of each approach. Below I’ve listed some of the stereotypical benefits of both.
- Cheaper hourly rate
- Closer integration
- More transparent
- More company knowledge
- Easier to scale up or down (or indeed stop)
- More expertise and access to tools
- Better relationships with search engines
- Less vulnerable to change (staff leaving)
So, if you haven’t yet begun paid search advertising, hopefully this intro will give you a grounding in the right questions to ask and strategic approach to take.
There are, of course, many more considerations, include more granular tactics. For more information, download the Econsultancy PPC Best Practice Guide, or why not check out our PPC Bid Management Buyer’s Guide.