4 Reasons Why Your Company is Bad at Paid Search

You may be looking at that title thinking, “Who does this guy think he is? My company does a GREAT job at managing paid search!” Well, the fact that you’re reading this tells me there’s an inkling of doubt in your mind, and that’s okay.

Paid search is an incredibly simple, yet amazingly complex line of work to manage, and companies large and small screw up with it on a regular basis. While there are way more than five reasons you could be getting less than an A+ with your PPC efforts, four is a great click-bait title and will give you a taste of how much better you could be doing.:

So, without further ado, here’s the list:

1. You’re not tracking everything, or you’re not using your data

This is the most common thing I’ll see in a paid search campaign – minimum tracking setup to show you the performance of every aspect of a campaign. It’s great that you have a tracking pixel setup on your site, but are you passing the engine, campaign, ad group, keyword, and ad that generated a lead? If not, you’re burning dollars. While an Excel report you see 1-2 times a month may show that you’re killing it with leads and hitting a solid Cost Per Lead (CPL), the reality is that paid search is built around spending money to make money.

If you can’t pull up a report that shows you all of the above, you have no real way to adjust your campaigns based on ROI. Why is this important? Because some ads, keywords, or landing pages may not appear to perform as well as others on a CPL basis, but they may knock it out of the park from a Return on Investment (ROI) standpoint.

  • Real world example: Working for a travel client, I had multiple campaigns setup, but because of IT restrictions was only able to track campaign level data using landing pages as a proxy. The average CPL for all campaigns floated in the $50-$60 rate, with one campaign in particular generating leads at about $175 a piece. “We have to shut it down!” My client insisted. “Why would we do that when we can’t see the quality of the lead?” I replied. You may be thinking, “Is this guy dumb? It’s a HORRIBLE CPL, of course you shut it down!” Here’s what I didn’t share – those leads were for a premium travel product with average revenue four times higher than their other products. Ultimately I acquiesced to the client (at the end of the day, it was their money), while warning them that a closed loop analysis would likely show a great ROI. Since their customers take an average of 4-6 months to make a buying decision, we lost 4-6 months of leads off of a gut reaction to a single metric that is meaningless when viewed by itself.
  • Result: ROI analysis came back and showed the HORRIBLE, no good, craptastic leads that were bleeding the monthly budget dry were returning an astounding 1,100% ROI, compared to a 350% ROI of other campaigns!
  • Lesson Learned: This client had (and still has) considerable hurdles when it comes to implementing closed loop tracking. This resulted in using limited data to make management decisions. Take a look at your campaign and ask yourself, have you shut off keywords that can deliver an 11X ROI without even knowing it?

2. Your landing pages suck at conversion

 

Your microsites are absolutely beautiful. They follow brand guidelines and have easy navigation to the rest of your site. The stock imagery aligns with your direct mail, print, and other traditional efforts. Legal has signed off after putting a hellish block of legalese in the footer, and your Creative Director has decided to name her first born child after this site.

 

Oh, it also sucks horribly. Your headline is too small, you have too much copy, you summarize nothing, and your hero image of the shiny happy people takes up too much space. Your form doesn’t contrast with anything at all because it has to hit brand standards and your Call to Action (CTA) is weaker than week old decaf coffee.

 

A microsite should be a laser focused message blared through a loudspeaker that says, “FILL OUT THE FORM”. A microsite should not provide a good user experience because a good user experience will see someone getting what they want without having to give you anything in return. In other terms, it is pay to play – you want what we’ve got? Fill out the form and we’ll give it to you.

 

Real world example: Working with a financial services company I found a major dilemma. Financial keyword phrases in the B2B space are expensive. To be competitive (top 3) you’re looking at spending north of $25 per click. Read that again: Twenty five dollars per click.

 

The client microsite wasn’t all too bad, to be honest. It was converting at 11%on average, and they were generating leads for $120 – $130 a pop (CPC of $13 or so).

 

Volume was the issue. Their low ball CPC meant they were sitting at an average position of 8+ and only getting a fraction of the clicks they could.

 

I commissioned a new microsite that follows all of the best practices I’ve learned from running hundreds of A/B tests. I went toe to toe with design on why it would work, even though they breathlessly explained why it was a flaming pile of garbage. Once again, I put my money where my mouth is. “Let’s put it head to head. If it doesn’t outperform yours in two weeks, I was wrong and shouldn’t be running your campaigns.”

 

At this point I’ve thrown out a lot of bombast, but I want to make a side-note about the challenge in allowing designers to dictate how performance pieces should work: They have zero skin in the game. It’s not their neck when they spend $50,000 and return $10,000, it’s the direct marketer. That’s why I’m comfortable throwing out challenges – it’s my job to make money for my clientele, and a challenge is at its core a test. A test speaks for itself, transcends “business politics”, and brings clarity to performance marketing. End side-note.

 

The results: You’re not going to believe this, so I’ve thrown in a screenshot. By swapping out the microsite for one that follows all best practices, my client saw a pretty good conversion rate of 11% shoot up to 28% or one campaign and 31% for another. The CPL stayed flat, even though they’re now bidding $30 per click. This now means instead of a Search Impression share of less than 10%, this company is showing up as an option more than 65%of the time.

 

  1. You don’t work the leads

 

This one kills me because it’s so insanely obious. A consumer goes to Google, types in “your product”, and hits a Search Engine Results Page (SERP). They see your ad among nearly two dozen other natural and paid placements, decide to click on yours. They’re now on a microsite talking about how you have the thing they’re looking for! YES! They are excited – excited enough to put REAL personal information, including the coveted phone number they rarely give out, and press submit. The thank you page is generic and says, “Thank you, we’ll be back to you shortly.”

 

Then?

 

Nothing.

 

The consumer waits. They wait an eternity, which it turns out is about 15 minutes in the online world. You haven’t called. The excitement fades. Guess what they do? They go back to Google and find an alternative. Your smoking hot, hand raiser of a lead is now deader than dead. When you finally give them a call 3-5 days later, they hang up or scoff that you finally mustered up the effort to get ahold of them.

 

There’s a dated, yet extremely useful study from MIT that shows the odds of getting ahold of a prospect submitting information online, especially via search, plummet to almost nothing within the first hour.

 

How long do you have? Less than five minutes. We live in the age of instant gratification, baby! If you can’t tell me the capital of Iceland or what date World War 2 ended I can whip out my phone and have that info in a heartbeat. We’re dealing with people who have the ultimate luxury – they’re not sitting on your figurative car lot, a prisoner of your ability to deliver them what they want.

 

Real world example: A B2C client I currently manage told me when I started working with them on SEO that SEM absolutely did not work! They hired an agency, they got a ton of leads, and their Cost Per Acquisition (CPA) was well north of $1,500! And that’s for a product that nets them just about $500 per sale. It stunk, it was a failure, and they absolutely would never try it again.

 

I insisted that I wanted to audit their account, their CRM, and see what I can find. Now you’re guessing how long it took them to get a hold of someone who went to a search engine and typed in “Family Health Insurance” or “Medicare Advantage Plans”, right?

 

8 days 11 hours on average. That’s 203 hours, on AVERAGE! There were leads that sat for three weeks before some poor sales person tried to ring them.

 

I showed this data to my client, who still insisted paid search doesn’t work. “Give me a $20,000 test budget and let me work with ops to get these calls answered. If it doesn’t work, I’ll refund you all of my management fees in 90 days.”

 

Hint: I didn’t have to refund my fees. Paid search leads are now referred to as “Duffy leads” by this company, and represent over 40% of health insurance policies being underwritten. They enjoy a CPA of just over $160 and love paid search.

 

Question to you – do you know how long it takes to reach out to your prospects? Have you ever run a cohort analysis by age of lead to see the difference in conversion? For my client above, a lead five hours old had a conversion (lead to policy) of 4% or so. A lead answered within 5 minutes had a conversion rate of over 25%.

 

  1. You think a 5{777639131567fd6627ac3058e7cd558811bbe186df77f5a2242a02cd20606852} conversion rate is great

 

While we already discussed the importance of having a great microsite, there is way more moving parts to a search campaign. You have overall campaign setup that drives day parting rules, geographic reach and exclusions, a variety of ad extensions, and where you show up online.

 

Then you get to ad group structure, ad copy, destination URLs and tracking, usage or non-usage of Dynamic Keyword Insertion (DKI), keyword selection (and match type), and negative keyword rules.

 

It keeps going from there, but you get the picture. Here’s the kicker – most campaigns I’ve seen are under the mistaken impression that 3-5% overall conversion is fantastic. My clients believe this because they see a study or two come out every year showing that this is what other clients see – on average.

 

The problem with this line of thinking (as you’ve seen above), is that every paid search campaign is unique. Every single keyword, ad group, and piece of ad copy comes together to either deliver a jalopy or a performance beast.

It very well could be that 5% is an amazing, fantastic number, and that your campaign is scraping up against diminishing returns because it’s optimized so well. More often than not, though, it’s just doing okay.

 

Real world story: Back in 2008 I was working with an agency specializing in education leads. One client in particular was generating an average CPL of $90 against a $325,000 monthly budget. They were a big spender and this was a big, beastly campaign.

 

I took the reins and went to work. Let me tell you – this campaign was setup well, and I could not find anything within the account that really screamed out needing to be fixed. So I started to dig deeper. One thing that was somewhat unique to this client was their geographic footprint and variety of products. They had products ranging from a few thousand dollars for education certificates all the way up to Master’s degrees that ran north of $50,000.

 

This pointed me to do a deep dive analysis of all customers that originated from paid search. What I found was pretty cool – we weren’t bidding on certain keyword groups because they had a less than 3% conversion rate from click to lead, and had a higher CPA than average. What struck me though was the numbers – even though looking at a few performance indicators said this was a bad move, the ROI was solid, and we were excluding a sizeable number of converted customers from happening.

 

The strange thing was how hard it was to convince my client that we needed to let the overall conversion drop, and allow the CPL to increase. “We should be sitting at 3.5% and a CPL of $115.”

 

Lesson learned: A single metric by itself is only a partial story, and there are reasons why a low CPL is bad and a high CPL is fantastic. Every single piece of a campaign must be aligned with the ultimate purpose of a direct marketer – take every dollar in your budget and multiply it as much as possible for the lowest cost possible.

 

Summary

I hope you picked up something new from this content, or at least have a few things to look into with your current search efforts. As someone who has managed tens of millions in spend via search, created countless websites, and run hundreds of A/B and multivariate tests,  I can attest to the fact thatpaid search is something that continues to evolve every day, so executing a winning strategy is key.

If you’ve found that you need some help with any of these areas, please drop me a line for a free no-obligation account review. I offer the following services:

  • Paid search and online media management
  • Search Engine Optimization (SEO)
    • On-page recommendations
    • Content strategy and execution
    • Link outreach/earning management
  • Microsite and CMS development
  • A/B and multivariate testing

E-mail me at steve@digitalguy.xyz or give call/text me at 858-740-9994. You’ll also be receiving some drip e-mails from me with other digital marketing tips, hints, and insights.