I handle pay per click campaigns for most of my customers. The front-end, setting up and tuning the campaign is the most time consuming part of the effort. Finding the right words and then determining which words best convert. After the initial set-up maintenance requires far fewer hours, with much of the time spent adjusting spend for postion. However diligence and attention are important as results should be fed back into the website to improve landing pages and improve organic results for top performing phrases.

It is interesting to see how people charge for this service (most of my clients are hourly). There is an excellent article about PPC management options here

SEM Huntsville campaign management, ppc, SEM Huntsville

I had a meeting at Yahoo this week. The meeting was targeted at companies heavy into affiliate programs. We heard from a number of program managers, but because I am under NDA, can’t disclose all the great stuff they are working on. However, I will say these guys are not sitting around worrying about Microsoft. They are firmly focused on the future and presented an impressive list of products and upgrades. Most  interesting was some of the stuff going on with PPC management and while I can’t be specific, I think I can say that managing PPC on Yahoo is about to get a lot easier.

I know Yahoo isn’t the shinning star of the industry they once were, but these guys get a lot of stuff right. Google has the search traffic and therefore the money and therefore the clout, but judging by Microsoft’s track record, they don’t have the stuff to make Yahoo better.

Don’t get me wrong, I am not a Microsoft ‘hater.’ In fact I was a liaison to Microsoft when I was at Intergraph and spent a fair amount of time on the Redmond campus, they get a lot right. Tons of R&D and top people, but their leadership in office applications doesn’t currently translate to search or internet services.

So did Yahoo make the right decision? If I were a shareholder, I would probably wouldn’t think so. As a Internet marketing guy, I am glad to they didn’t merge this into Microsoft’s AdCenter mess. Yahoo had a business before the MS deal and it still does.

Yahoo has great people, product, and heart.

SEM Huntsville adcenter, ppc, Yahoo

I have blogged about this breaking Adwords campaigns up before, but recent events merit revisiting this approach to PPC management. While employed as a in-house marketing manager, I was faced running campaigns that included some very high-cost phrases (in excess of $10). This select group of phrases appeared to be the only words that were converting. We measured demos, and trips to the contact page as conversions. We received conversions only once out of eight or nine clicks (at $10/click a conversion cost $80 to $90). Moreover at $10/click, I was quickly exhausting my daily budget for few paltry conversions. This was clearly a chicken and egg scenario, I needed leads to get sales, but I needed sales to pay for generating leads.

A typical sale was between $2,500 and $5,000. When you divided new sales revenue by leads over the span of a year, we had an average revenue of $1000/lead. So I felt paying up to $100/lead was reasonable.  However, we had a sales cycle of 3 to 6 months and since every lead doesn’t close, I needed to temper my enthusiasm for getting new leads with the realities of cash flow.   

My first thought was to separate my AdWords campaigns by keyword cost, dividing words into producing and non-producing campaigns. This way I thought I could focus my ad dollars on these high-dollar phrases where they were producing the highest number of leads.

Then something unexpected happened. Prior to dividing my campaigns up, my high-dollar, high-conversion words had been consuming each days ad spend. After placing high-dollar phrases in a standalone campaign with its own budget, lower cost words were able to run for longer periods. Statistics emerged showing that while the lower-cost ($3.50/click) phrases converted at a lower rate, the cost per conversion was half the cost of the high-dollar phrases.

As a result of this exercise, we abandoned the high-cost phrases, reduced our ad spend by half, while increasing our exposure and maintaining constant flow of leads.

I now believe you need to take this a step further and separate campaigns into high, medium, and low (or exposure) campaigns.

High and Medium campaigns are those which convert to leads at a solid rate. Here, you have to look closely at your cost per lead (annual new sales revenue/leads) and your cash flow to determine what you can afford to pay. Phrases whose cost start moving into stratosphere can be abandoned or throttled in separate campaigns so they don’t exhaust ad budgets prematurely.  

The low-cost campaigns provide exposure and build name recognition in exchange for an occasional lead. If phrases in this group become performers be sure to move them in to higher performing campaigns to be sure they have adequate budgets for them perform. These low-cost/ exposure campaigns may also include words that have become too expensive to keep within the top 5 positions on the first page, but might continue to provide exposure and even an occasional click from lower positions or even second page results.

So what position should you shoot for? While I like to stay above the fold in position 3-5, there is certainly and argument to settle for an occasional click with a lower cost from a lower position. – but again, I think it all comes down to cost per conversion and what you can afford to pay for a lead.

SEM Huntsville adcenter, Budgeting, conversions, CPC, leads, ppc, yahoo marketing