Pear Analytics

The two main forms of search engine marketing includes search engine optimization, or optimizing the organic listings, or pay-per-click (PPC) advertising.  But which will benefit your business in the long run?

Many small businesses come to us with the ultimatum that they have X dollars to spend, and will either choose to spend it on SEO or PPC, but not both.  The fact is, they should consider spending in both areas.  Here is why:

• The PPC ads can provide instant traffic, and simple campaigns can be set up in a matter of hours.  SEO will take weeks to set up, and months to achieve noticeable results.
• Setting up your PPC campaign will provide some of the necessary keyword research to start your SEO campaign anyway (although the targets will likely be different, it’s a good starting point).
• The PPC campaign click-throughs and conversion rates can provide some intelligence back to the SEO campaign; however, be aware that PPC visitors will behave differently than an organic visitor.
• The SEO campaign will force you to develop more keyword-rich content, driving more long-tail searches.  The PPC campaign will force you to create well-designed landing pages that you can A/B test for best results.

So why then is SEO more beneficial to my business in the long run?

It essentially comes down to the cost, and what stays with you after the cash is spent.  Check out the graphic below.  You can see the slow, gradual increase in performance of the SEO campaign, while the PPC campaign is more “instant”.  Once the SEO effort performs well and you start to appear on the first page of results for some of your primary keywords, you get this area of what we call “maximum exposure” – where your paid ad and organic listing appear on the same page.  It has been said that this type of exposure can lead to a higher chance of getting a click – on the organic listing – up to 7 times more likely.  That’s interesting that the paid ad provided the necessary brand exposure to get a user to click on your FREE organic listing.

So let’s consider what happens after you stop spending in both areas.  Maybe you are in a budget crunch, or you ran out of funding.  The PPC ads come down immediately, and you are no longer visible to potential customers.  With SEO, your time, effort and money will sustain itself for weeks, months, or maybe even years.  This means you’re not going to lose your rankings overnight, and the SEO work will still give you exposure to new potential customers and drive more leads and sales to your business, even though you’ve stopped spending in that area.

Also consider the ROI on both programs.  A click in PPC for a competitive keyword can cost you $4 (let’s say), whereas an organic visitor can cost you merely pennies (take you monthly SEO spend and divide it by the total organic visitors during the same period).

So if you only have X dollars to spend, don’t count out your SEO program.  Instead, split your budget across both and get the maximum benefit for your money.

7 Comments »Tags: PPC, SEO

Before you embark on a potentially expensive paid search campaign, consider this one insight that could change your mind.

While Pear focuses on organic search (SEO), we do mingle around and talk to a lot of experts in paid search. Experts who work paid search campaigns day in and day out. The other day I learned something very interesting.

The longer the sales cycle in your business, the worse your paid search campaign could perform.

In fact, if it takes you longer than 2 weeks to close a potential lead from click to sale, then paid search might not be a great fit for you. This is not an off-the-cuff statement, but rather a conclusion based on a long history of data obtained by a close partner in the business. Now there are always going to be exceptions to the rule, and there are many other factors that go into paid search ROI, but this is a good rule of thumb, and here’s why.

Paid search works better when an impulse action (like a purchase or contact) is involved. Let’s look at a few examples:

Plumbing Service – your bathroom had a backup and is flooded with raw sewage. Do you search 15 plumbers and call for quotes? Not likely. You choose the first or second option you see based on the most credible looking, easiest to contact (maybe they are open 24-hours or offer emergency response) plumber. You probably don’t care much about the price either – you just want it fixed.

Real Estate – most of us don’t buy property in less than 2 weeks. We look at lots of options, talk to lots of people, make personal visits and collect a lot of information before making the final purchase. This is definitely not an impulse purchase. Paid search can work in this case if the margins are high enough to where even if the conversions are dismal, one sale could pay for the whole campaign.

Air Conditioning Repair – it’s already in the 90 degrees here in Texas and turning on your AC is a necessity. Like the plumber, you need the next available company to service your system, and the first or second listing will get the lead.

Home Health Care – getting a parent or loved one into a home health care situation is an emotional experience. Not only is the sales cycle longer than 2 weeks, but the decision is usually not with one person, which makes it a harder deal to close. If clicks are going for $5-10 a piece, you could spend hundreds before getting a new client.

What do you think?  Do you have any examples to share?

7 Comments »Tags: Paid Search, PPC, ROI

That’s right – you can’t measure everything online that you might think.  Analyzing click traffic on websites has become much more difficult to get anything close to accurate.

One of the most difficult problems to solve is the issue with giving proper credit to the “original source” of the lead or sale.  Some of the PPC systems refer to this as the “assist” and they pass special tracking cookies to the user that will help indicate in the click stream data future visits from this user.  This typically helps credit PPC campaigns and reduces the cost per acquisition (CPA) for that channel.

This is great, but it is flawed.  This generally assumes that the visitor used one computer, and few of us use one computer.  We usually have an office computer, a home computer (we have 2), plus mobile devices.

Consider this situation (which is probably quite typical):

1.  Husband is searching for vacation spots for his family during his lunch at work.  He does several searches, including hitting a few paid ads.
2.  He runs out of time and has to get back to work, so he emails himself the links to the pages of the sites he liked to his home email account so he can show his wife later that evening.
3.  He gets on email at home and pulls up the pages on his home computer to show his wife and kids what he found.
4.  They continue to do more research and even bookmark a few sites/pages and will revisit in a couple of weeks so they can think about it.
5.  They revisit the site a few weeks later by hitting the saved bookmark and from there, decide to purchase.

Now in this case, it’s going to be virtually impossible for the marketer to track this sale all the way back to the paid search ad because he lost him as soon as he switched computers (if he is even using cookie and campaign tracking in the analytics software).  And if this happens often enough, he will think his paid search campaign is ineffective because it is not driving any sales.

Newsflash: most people don’t buy anything on the first visit!

There is likely going to be multiple interactions, extensive research, bookmarking, etc. before any purchase is made over a several-week (depending on the product) sales cycle.

Secondly, consumers are not going to be as compulsive in a down economy and are going to be looking around for deals, so we can’t possibly expect them to purchase on the first visit from a Google ad.

So what can we do about this?

Well, not too much, unfortunately.  However, if you have an e-commerce site selling any sort of products, you can reduce this phnomenon by simply having a “Favorites” or “Wish List” area of the site where a user can quickly and easily open a free account and save what they like straight on your site. This would eliminate the need to bookmark and email and cookie track everything.  You would have all of the data on your site, and now you could even do session tracking by username and get other interesting information (beware that session tracking has additional privacy issues that you will want to look at closely).

Many of the large sites like Amazon, eBay and others have this feature, but even for small or medium sized business, most of the 3rd party off-the-shelf e-commerce applications (like X-Cart, Magento) have Wish List capabilities.

Happy tracking!

No Comments »Tags: cost per acquisition, Google AdWords, PPC, Web Analytics

With a tough economy, and many companies struggling to keep, or gain market share, there seems to be an increase in lawsuits surrounding online advertising, and the strategy some companies use to bid on their competitor’s name.  We recently had an opportunity to be involved in a court case, and give expert testimony on the inner-workings of Google AdWords, and other PPC platforms, and how trademark rules are handled.

However, this is nothing new. Back in 2004, the insurance giant Geico, sued Google for allowing their competitors to bid on their name and “create confusion with consumers,” a clear violation of the Lanham Act.  So, what was happening is a Geico competitor would bid on the word “geico”, or maybe even “gieco”, and hope to outbid the actual company in the hopes of attracting potential leads.  Geico claims that not only was the competitor bidding on their name, but also using it in the ad itself.

Back in 2004, Overture had seemingly stricter rules, whereas Google took more of a “hands-off” approach, allowing trademarked terms and reviewing few complaints.  Now in 2009, things are more competitive, and compaines are doing whatever it takes to get leads and sales on one of the most cost-effective channels: the Internet.  So not only are some companies going to be tempted to bid on competitors trademarked names, but the owners of those trademarks are also going to be on the lookout more.  Here is what we know:

Google Trademark Policy

“With Google AdWords, advertisers may select trademarked terms as keywords or use them in the content of the ad. As a provider of space for advertisements, Google is not in a position to arbitrate trademark disputes between advertisers and trademark owners. As stated in our Terms and Conditions, advertisers are responsible for the keywords and ad text that they choose to use. Accordingly, Google encourages trademark owners to resolve their disputes directly with the advertiser, particularly because the advertiser may have similar ads on other sites. However, as a courtesy to trademark owners, Google is willing to perform a limited investigation of reasonable complaints.

Google’s trademark policy does not apply to search results, only to sponsored links. For trademark concerns about websites that appear in Google search results, the trademark owner should contact the site owner directly.

Learn more about Google’s trademark policy and copyright policy.”

Source:  Google AdWords Learning Center

Yahoo! Trademark Policy

“Advertisers sometimes bid on search terms that are the trademarks of others. For bids on search terms in Yahoo! Search Marketing’s Sponsored Search service, Yahoo! Search Marketing (formerly Overture Services, Inc.) requires advertisers to agree that their search terms, their listing titles and descriptions, and the content of their Web sites do not violate the trademark rights of others. In cases in which an advertiser has bid on a term that may be the trademark of another, Yahoo! Search Marketing allows the bids only if the advertiser presents content on its Web site that (a) refers to the trademark or its owner or related product in a permissible nominative manner without creating a likelihood of consumer confusion (for example, sale of a product bearing the trademark, or commentary, criticism or other permissible information about the trademark owner or its product) or (b) uses the term in a generic or merely descriptive manner. In addition, the advertiser’s listing should disclose the nature of the relevant content.”

Source: Yahoo! Search Marketing Legal Guidelines

So, in the end, both ad platforms tend to put most of the responsibility on the advertiser, but clearly are willing to investigate any disputes that may arise.  Both have ways to detect trademarked names, but only if they have been entered into their systems by the owner of the trademark.

Recently I saw in Google AdWords one of our ads in a campaign was automatically disapproved because we had a trademarked name in one of the ads – which we HAD permission to use.

Have you experienced any trademark no-no’s in any PPC platforms?  Describe your experience…

3 Comments »Tags: litigation, pay per click, PPC, trademark violations

Let’s say you have a PPC campaign running with lots of variations in ads, ad groups, messaging, etc. You even have micro and macro conversion goals set up in your PPC campaign and assigned each of them a value. You’ve organized everything in to groups for testing, but you just aren’t completely sure which combination of test variables is working properly.

Here’s how to know which PPC ad group is working:

1. Determine what the value of your conversions are. This can be subjective, so use your judgment based on what the sale is worth.  If a sale is worth $100, maybe a form submission for a lead is worth $10. If you have an e-commerce site, than include the value of a sale, perhaps in net terms.  (We can determine what the max amount we should spend on a lead by looking at how to measure cost per acquisition.)

2. Compare your ad groups side by side, looking particularly at what the ad group cost, total conversions generated, and total conversion value.

3. Divide the total conversion value by the total amount spent on the ad group.  This tells you how much you earned in value for every dollar spent. In the example below, Campaign #1 earned $4.11 for every $1 spent on advertising, while Campaign #2 earned $6.81 for every $1 spent.

We call this the Value-to-Spend Ratio. It helps quickly evaluate your campaign if it has lots of ad groups.

If you have an example where your Value/Spend ratio is less than 1, that means you are earning less than you are spending, so you will need to decide if that ad group should continue or not.

Here are two ad groups shown side by side:

On the surface, Campaign # 1 looks like a better performer.  It had a higher click-through rate, more ad clicks, more conversions and $67 more conversion value.  Even the average CPC between the two campaigns are identical.  But Campaign #2 spent less than half the money to get only 21% less value.

A lot of people might assume Campaign #1 as the winner here, but we disagree because of the Value-to-Spend Ratio.  We like this measurement technique because it is agnostic of the various types of conversions and conversion values.

Try it, and let us know how you made out!

1 Comment »Tags: Google AdWords, pay per click, PPC, value-spend ratio

So often we are concerned with the “big conversion” on the website, like purchasing something, for example.  We call this a macro conversion – it’s your ultimate goal.  But what about other activities, maybe not as valuable, but still worth something.

We forget that marketing is basically broken down into these 3 pieces:

Everyone, including upper management, is zoning in on purchase.  But what about awareness?  Remember the circles of trust graphic?  It’s highly unlikely that many will purchase from you when they don’t know you.

My point:  create micro conversions in the Awareness and Consideration stages and measure them!

Things like entering a zip code, joining a mailing list, or subscribing to your RSS feed.  Now you have a chance to converse with some highly potential, future customers on a permission-based marketing system, versus a interruption marketing system.

Now, assign a value to these micro conversions.  A zip code might be worth $1 to you.  Asking for a zip code is great because it further refines what geo-tracking in Google Analytics can’t do.  Now you know what zip code your visitors are from, so it takes some of the guesswork out of your next direct mail piece.

Use this value to compare to the costs you’ve put into the activity, such as SEO, PPC or even web analytics.  Before long, you will be able to see which activity is driving the most value.

1 Comment »Tags: conversion tracking, conversions, pay per click, PPC, Web Analytics

A good alternative to normal PPC advertising through Google, Yahoo and MSN (“The Big 3″), is to try Facebook.  There are three primary reasons why I like Facebook advertising:

1. It’s a different model.

Instead of targeting a broad range of search terms to an unknown demographic, I am targeting specific interests on specific profiles that fit my criteria.  If I am running an ad for golf clubs, and you are not a golfer per your profile, then you probably won’t be seeing my ads.  It’s like uber-targeting.  Sure, you can do targeted placements in Google AdWords, but it’s not the same as targeting what specific things people like/don’t like.

2. It has referent power.

When we look at the “circles of trust” related to why people buy, the inner-most circles are are the reasons why – personal experience, or someone you know told you about their experience.  So here’s the cool thing with Facebook.  If you set up your company page, and get your customers, friends, etc. to “Fan” you, when the ads run and appear on someone’s profile, if one of their connections is a “Fan” of your page, they will appear above the ad kind of like an endorsement.

3.  It’s really easy to set up

Google and Yahoo have built complex systems that require tons of maintenance, and are difficult sometimes to maneuver around.  They are great if you want to run hundreds of ads with thousands of keywords, and multi-layer targeting.  With Facebook, you can literally start running a few ads in less than 5 minutes, and get some decent results.  Here’s how you do it:

Step 1:  Determine what you want to advertise, and create the first ad.

I thought I would promote myself on Facebook by creating an ad that would target Marketing Managers, VP’s of Marketing, etc., by letting them know that we are results-based analytics firm.  I can upload an image if I want, like a logo or creative banner.

Step 2:  Select your audience.

Now, this is the cool part.  Not only can I select what part of the country I want, by age, sex, marital status, education, and even job title.  You can’t target like this in Google or Yahoo.   So for my little ad experiment, I can reach 31,640 people who could be interested in my ad.  With Google or Yahoo, you end up throwing out this huge catch-all net to see who will click on your ad based on search volume, which can be wasteful.

Step 3.  Select bid method and pricing.

This works similar to Google, Yahoo and others, so if you are already familiar with CPC and CPM bidding, this is pretty much the same.  What’s also neat is that they give me a range for my suggested bid.  I haven’t run enough ads to know if this is truly the low and high bids (I suspect not), but you can get a pretty good sense of what this would cost.

And that’s about it!  The next screen basically reviews your ad, and authorizes payment via credit card.  They have  Facebook Insights where you can measure the performance of your ads, and get all kinds of demographic data on the people who clicked on them.  If you need help setting up a PPC strategy for your company, let us know.

Update – January 13, 2009:

After using this platform for sometime now, even though it’s performing nicely for some of our clients in terms of cost per conversion, I feel that I also need to point out it’s limitations:

1.  There is no conversion codes to place on your “thankyou” page like Google and Yahoo.  You basically have to go into your analytics reports and view by source, and then segment by goal completions.  Even then you will have to do some manual math, or you can take the time to try and create a custom report, or advanced segment in Google Analytics.

2.  There is no way to mange multiple clients.  The interface is limited to one ad campaign per account.  Both Google and Yahoo offer their “MCC” accounts, or Multiple Client Center.  You will have to create a new account for each client – this is a real drag.

3.  There is no user permission system.  You won’t be able to give multiple folks varying levels of access to the account – it’s one account, one level of access.

4.  There is no change log capability.  If you’re like us, and you are constantly changing ads, target keywords, etc., you like a system that will at least track all of that for you and dump it into a .csv file at least.  Not possible with Facebook…sorry folks.

So in a nutshell, while I am still happy with the results we are getting from the ads, I am disappointed that the folks at Facebook couldn’t make a more sophisticated ad platform. With ALL the people on it, and ALL the revenue potential, this is all we get?  (But then again, have you tried linking your Facebook status update feed into your FriendFeed account?  They bury the RSS, and then you have to right-click on the link to get the address – really?)

2 Comments »Tags: Facebook advertising, pay per click, PPC

We just finished putting together a comprehensive online ad campaign using Google AdWords for a hospital in Chicago. We needed to create four campaigns centered around “heart attacks”, “heart disease” and other cardiovascular related topics. The set up work was kind of exhaustive as we scrubbed the keywords for searchability, effectiveness, competition, and average cost per click. We also set up a strategy for each landing page, remembering some of the rules about good landing page design. Then we needed to determine what we were going to track in the campaign in order to compute the real return on investment, or ROI. If you use AdWords’ Conversion Optimizer, it will kind of give you an ROI, but in terms of the ad spend, cost of acquisition, conversion values and some other things. However, the ROI extends beyond the campaign since there is activity that drives leads to the client that AdWords can’t track (that I am aware of); in our case with the hospital, consultations scheduled, consultations completed and ultimately, procedures. Well each of these has value that must be calculated as part of your ROI on the campaign. Quite simply, we can define ROI in the following manner:

where the total benefits are all of the conversions and their associated values along the way, and the total costs are what the campaign cost with click expenditures, web design, development, tracking, analysis, account service and more. In the end, we set up 8 different conversions that were cross-utilized in the other ad groups and landing pages, so when you add it all up, there were over 25 points of conversion – all having value to the client.

So we can easily see here under the “Conversion Tracking” menu that so far, only after a day of running the campaign, we have 54 conversions on Zip Code Entry. Well, we have several ads that drive you to a landing page that ask for a zip code before you can use the risk assessment tool, so if I click on each conversion, I get the following:

and now I can see that the Zip Code Entry was most successful on the Cardiac Risk Assessment Calculator conventional ad, run 1 (I talk more about how to set up AdWords campaigns for maximum efficiency and results in another post). Overall, I’m getting an 84.38% conversion rate on this particular metric, which is very good. This says that most people are OK with giving you a zip code in order to use something of perceived value, or to get to the next step in the process. So, during the campaign we will add up all of our conversions, multiply them by their respective values, and divide by campaign cost. This method will show your client much more value of what the campaign is extracting, rather than just looking at click through rates (CTR’s) and ad conversion rates.

How do you calculate ROI for online ad campaigns?

1 Comment »Tags: conversion tracking, Google A, Google AdWords, PPC, return on investment

When you are spending money on pay-per-click advertising, or even search engine optimization, it’s nice to see people converting, or the act of getting the visitor to do what you want. After all, you are paying for the traffic, so wouldn’t it be prudent of you to give them what they are ultimately looking for? What if you went into the Dollar Store and everything was $3? You would be very disappointed, right? You would turn around and walk right out!

So let’s use an example. Let’s say I am interested in getting back in the gym, so I do a search on Google and find this::

Awesome!  I totally need to get back into shape, so I am digging this 50% off enrollment, especially when enrollment is probably $150 or more.

So after you click on the link above, it takes you to the following landing page:

Wait a minute….where’s the stuff about the 50% off enrollment?  I don’t see it….do I have to sign up first?  Do I have to call, or give a promo code?  Now the potential customer has a bunch of questions, and so they are likely to “bounce” from this page given too many unknowns.   Not surprisingly, this happens all too frequently.

But let’s say I do stay on the page. What is it they want me to do? Better yet, if I am Spectrum Clubs, what do I want you to do? I would like you to probably a) fill out a form; b) call me; or c) stop into one of our clubs. Tracking wise, the easiest thing to track would be the form submission, then the phone number, and lastly, the visit to the club. Let’s say I’m looking for a form to fill out so someone can contact me later.

The problem is that this page has 8 different things for me to click on – but only 1 of them will take me to the form. So, after I’ve paid $2 to get you here, I’m going to challenge you to a game of Roulette? There is a 1 in 8 chance now for the visitor to even click on the right button, and even less of a chance to get them to fill out the form and submit it. This reduces conversion, and increased cost per acquisition.

So, let’s look at a few pointers for good landing page design which is sure to increase your conversion rates:

1. The page should have content related to the ad clicked on. This will increase your Quality Score and will ultimately allow you higher ranks for lower bid rates.
2. Eliminate the distractions on the page that will prevent the visitor from doing what you want them to. Avoid using templates of the main site with all of the usual navigational elements.
3. If what you want is for the user to fill out a form, put the form on the landing page. Don’t make the visitor click again to contact you – it will automatically reduce your conversion rates simply because not everyone will make that second click.
4. Advanced Users – utilize dynamic keyword insertion to increase relevancy on the page. Or, if you have multiple products or services, highlight the visitor’s interest based on their original search query.

Happy landing page designing!  Monitor and test often.

No Comments »Tags: conversion rate, landing page design, PPC, quality score, relevancy, SEO