The Seven-or-So Habits of Highly Profitable Pay-Per-Click Search Engine Campaigns
By Andrew Goodman, 6/10/2003
Trying to promote other people's websites, as I have done as a consultant for several years now, can be an up-and-down experience. If a spate of clients just happen to be coming out with new sites with unmarketable products or major flaws in the sales process, it's tough to see a light at the end of the Internet marketing tunnel. Suddenly all those stories about the death of e-commerce start to gnaw at you. Then, you get a rash of clients who seem to have a license to print money, and not only that, but they seem to think you had something to do with it... and all is right with the world again.
Lately, we've had some fall-over-in-disbelief success stories with Adwords campaigns. What makes them all the more unexpected is that, while they may be well-thought-out businesses, we are not talking about people with huge amounts of capital. We are not talking about websites that will ever win awards for their beauty. We are talking about sites and businesspeople who know how to get the job done, period. Nothing more and nothing less.
One such project was for a high-end electronics product (usually rented or leased) that I assumed would sell in a tiny trickle due to the exotic, high-priced niche it was aiming at. Anyway, Page Zero associate Scott Perry put together a beautifully organized, carefully-researched keyword campaign, and the client spent a modest $25 on the first day. From that $25 came $9,000 in sales!!
We don't usually strike gold on the first day like that. Sometimes it takes 60-120 days to get it all figured out. 75-80% of our client campaigns are profitable; many have built their entire fledgling businesses around pay-per-click. In the fall, for example, I hope to be able to tell you about my friend and client the diet guru who is bent on becoming the next Dr. Atkins. With his profitable Adwords campaign providing the financial foundation, he's been able to gain the confidence of a celebrity (no, it's not George Foreman) and his agent, and has already helped this slightly rotund individual lose 40 lbs. By fall this might be up to 70 or 80 lbs. The PPC campaign might be considered the baby steps (but they are vital baby steps). Getting mentioned on Oprah is the real goal. :) It's exciting to watch the process unfold, in any case.
The reality, though, is that 20-25% of the campaigns we take on wind up being failures. That's as it should be. (It's only that low because we reject some prospective clients for being too unrealistic or unprepared.) This online marketing thing is a giant laboratory for what customers do and don't want. And you can find out in great detail what they do and don't want by running a trial Adwords campaign and spending about $100 on clicks.
So the small-business-spending-$25-to-make-$9,000-in-a-day kind of thing doesn't happen every day. But it's worth pondering why it does happen. We've seen enough good and bad campaigns to have learned a few things.
Before getting to the list of success factors, a general comment: the fact that we are focusing on paid campaigns (as opposed to SEO-and-hope) seems to weed out uncommitted businesses. Also, if something is performing poorly at the beginning, it embarrasses us as we hate to see nice people losing money. That motivates us to kick the client in the butt if there is something rotten on their website that is preventing sales, etc. In short, then, paying for traffic (as opposed to hoping for the free stuff) makes people think twice about their web venture, and makes them more willing to act on all of the various changes they need to make to really do well. Similarly, sites that used to be addicted to penny bids (formerly available on Overture) often were lazy or simply built on faulty business models. Five and ten cent bid minimums often forced these sites to imagine what life would be like without the close-to-free traffic. Often it wasn't pretty. It takes a lot more effort and thought to make money from 75 cent bids than from one cent bids, obviously.
Here, off the top of my head, are some characteristics that we've seen in successful campaigns:
- They're in a hot industry, or one that is very amenable to very close targeting, with only a handful of web-savvy competitors; or selling products or services that people seem to be in a hurry to get at, or have time limits attached (medical needs, necessities for sudden trips abroad, etc.)
1a. In a competitive industry, they have built in some kind of differentiation that consumers can quickly come to terms with;
- They sell high-markup products;
- They employ advanced strategy & tactics for proper deployment of Adwords, Overture, etc.;
- So very important: they track which buckets of keywords are performing best (ROI tracking back to source and within that source, ad groups or even keywords)
- If direct online sales will be difficult, they create a clear path to an alternative action such as a printed catalog request, a phone number to call for info, or online application form.
- They're using laser-targeted pay-per-click keyword advertising, and owe a lot of their success to Google Adwords, etc., for creating such a brilliant, efficient, flexible direct-marketing channel.
- They neither under-spend nor overspend on their online promotions. With the help of (4), of course.
You'll notice some surprising things absent from this list. Usability and path-to-purchase issues are not to be taken lightly, but many success stories we've seen have pretty ordinary-looking websites. Some even have a few fairly serious problems on the website, such as an insecure-looking order form. So what's going on? In my opinion, there is just some "stuff" that customers need or want so urgently that they'll take the effort to navigate around some of the ugliness and klunkiness that is bound to crop up in most small business sites. The electronics site mentioned above takes all of its orders by phone, so it's not even particularly easy to track sales back to keywords - they just know that sales are coming from their PPC campaign and that sales are strong. Why are they having so much success with an online search engine ad campaign? Basically, they're cashing in on the extreme targeting available in their niche, and the fact that their demographic either really needs the product quickly, or are just really status-conscious and therefore not price-sensitive. This is a product that only came on the market three years ago (and came off the market a year after launch only to return a year after that). Opportunists thrive in the online space.
I still stand by the wise words of Seth Godin (from The Bootstrapper's Bible): if you've tried everything and you can't make a business idea work, then maybe it's just a bad idea. Find something that's worked for someone else, figure out how you can make it work too, and try that. Sounds simple, but having the opportunity to see small-biz successes and failures come and go week in and week out can really hammer that point home!
Here's one thing that all of the successful folks have in common. They don't lie awake nights fretting about the keywords in their meta tags. And they don't spend hours staring at Webtrends to see what percentage of people viewed their site using Internet Explorer 5.5. Rather, they do their best to understand who the customer is; they let the marketplace dictate their priorities; they induce a prospective customer to tell them which problems they need solved or needs they need filled - yesterday - and secondly get them to name a fair (often high) price for having the need fulfilled. And then they go out and figure out a way to fulfill it! Having a good website and a way of driving traffic to it are necessary, but far from sufficient, conditions for online profitability. The real magic is "out there" - inside of your customers' hearts and minds.
Andrew Goodman is Editor-at-Large of Traffick.com and the author of "Winning Results with Google Adwords".