As the Chief Strategist of an Agency I have audited hundreds of accounts both in house and those of potential agency clients. Recently when auditing those of potential clients I have encountered a similar theme over and over, a move towards efficiency and away from volume. This could be construed as a positive but in most cases it was not the client’s business objective.
Volume balanced with efficiencies is what potential clients are looking for.

With the mainstream adoption of paid search there has been an expected influx of competition. At the same time there has been a surge of technology to assist in the development, management, and optimization of a paid search campaign. The hope is that the advancements in technology would at a minimum offset the new competitive pressures to cost and conversions and advertisers would continue to realize growth. Unfortunately that is not the case. I do not blame the marketplace, I blame the utilization of the new technologies (mainly bid management) and ultimately the execution of these paid search campaigns.

The problem revolves around the central maxim in optimizing a marketing plan, to push the winners and eliminate/optimize the losers. The tools that have recently been created are extremely adept at identifying losers (some better then others) but they have failed miserably at increasing the winners. Their only course of action is to “raise or lower a bid” but what about the other critical success factors of paid search. From my experience those advertisers that have embraced the automated tools have become too hands off which has ultimately led to the steadily decreasing volumes. Let’s take a quick look at a few reasons why that might be…

Give these tools an absolute F for helping develop messaging that balances Quality Score, Conversion Rate and Average Order Value. This is probably one of the quickest ways to turn around an under-performing campaign, and increase volume. The average search page will have at least 8 sponsored listings to go along with the 10 organic listings. Breaking through this clutter, getting the attention of your target audience and capturing the sale is heavily dependent on the AD Text. Don’t believe me?

We recently ran a test for a real estate company on a keyword spending over 20k a month. By testing the creative we were able to increase sales volume by 22% and actually decrease the cost per acquisition. No change in the bid… just an effective messaging strategy.

Another test we ran at our agency took an ecommerce clients average order value up over 10% without effecting CPC or conversion rate. That’s right, what you say in your creative influences which products are sold.

There are ton of examples like this, not just at our agency, but I am assuming every agency that really realizes the power of AD Copy. However Ad Copy is not the only area in which these tools fail. Ad Copy is actually pretty excusable considering a tool is being deployed for optimization based on historical data. So what about the core competency, which is raising and lowering bids based on historical data?

This too does not deserve a passing grade because of the fundamental optimization best practices for increasing volume. When you are increasing sales volume in search you are optimizing to a motto of: How can I achieve the maximum amount of exposure and still meet my ROI goals. When this is the motto the last thing you worry about is the bid (I’ll explain).

A keyword is way too broad of a media placement to determine if it works or does not work. Here is why. Let’s say the keyword is furniture and it is generating thousands in sales but the ROI is just not high enough to justify the investment, what can you do? You need to take a deeper look at the keyword and determine what parts of the keyword are working and what parts are not to ensure you can keep high positions when it is warranted.

In order to accomplish this examine the ROI by:

Match Type
Day of Week
Hour of Day
Creative
Distribution Partner (very effective and not often used)
Landing Page
Search Query (Use the Google Search Query Report - it is a “money maker”)
IP Address (from both a fraud perspective and a regional targeting perspective)
Assists (How many sales were aided by this keyword)

Once these are analyzed; and conclusions are made about why some parts are working and others are not (this is a big part of being a successful search marketer, not only identifying what is working and not working but understanding why) then you need to restructure the keyword to align with the findings. Then and only then do you start increasing and decreasing bids. Getting to this level of granularity is a great way of making sure that you do not start down the road of decreasing market share. Now at this point if you would like to employ a bid technology to assist in more efficiently and effectively changing bids, then only at this point would I recommend the use of automated technologies.

Next week we will take a look at another untapped opportunity for growth which is the contextual networks. In the meantime I would love to hear your thoughts on the balance of volume vs. efficiency and some of the best ways to overcome the obstacles.