Advertising dollars are moving from traditional to online. The recession is accelerating this shift. Advertisers want to spend smarter. As more companies use enterprise-level analytics to track ad spend ROI and see what works best, they’ll move from directly-negotiated media placement to AdWords (both search and placement-targeting). AdWords beats other advertising methods because you can track ROI granularly and increase your advertising ROI as you go.
Proven PPC Profit = Increased PPC Spend
That means, whether or not an advertiser’s individual budget shrinks overall, it’s likely that a higher percentage goes to AdWords. I’m not going to argue with that move, because when the situation is right and the PPC management is skilled, I haven’t seen better ROI for new customer acquisition. We see this in our agency’s internal comparisons of multiple advertising channels for the same client across several verticals as well as other marketers’ estimations of the best online marketing channels (2007 Marketing Sherpa Survey).
Spending on PPC Versus SEO
In situations where PPC doesn’t get larger allocation, it’s possible that direct, trackable ROI is not prioritized, or PPC has been mismanaged. SEO is a smart long-term investment in your company, but how many companies are actively tracking and evaluating SEO ROI? Is it even possible? Would you evaluate only the ROI of additional traffic, leads, and sales after SEO begins? Do you factor out the internet’s growth rate?
I won’t be one-sided here. There is also the question of PPC attribution theft. How often does PPC steal credit from other channels? If SEO did the work of an earlier portion of the sales cycle, does PPC get all the credit? Web analytics are not sufficiently advanced to attribute multiple touch points throughout the entire sales cycle, especially in longer sales cycles. We eagerly await the web analytics that will solve this problem.
But the counter-question is: what percentage of those sales PPC ‘stole’ credit for would you lose without PPC? Brad Geddes wrote a good case study on this recently, and his point is: don’t focus only on what you’d have without PPC; note the sales PPC brings in that you would have lost otherwise.
The answer is to advertise and market with both SEO and PPC, and especially engage a firm that helps you track the ROI of every channel.
While we’re at it, email list building, email marketing, and website/landing page conversion optimization are essential to a complete online marketing mix. This coverage of the whole online sales cycle will make you a stronger business.
Mismanagement: The Biggest PPC Obstacle in 2009
I think the biggest problem we have with AdWords is that too many AdWords accounts are mismanaged. The result of that is:
- Disillusionment with PPC,
- Skepticism about its effectiveness,
- Belief that it can’t produce positive ROI,
- Theorizing Google is trying to fleece AdWords customers, and finally,
- Shifting of advertising spends to other channels
There are certainly niches and offerings that are unfavorable for PPC success. But I’ve seen and taken over so many poorly run AdWords accounts that I know a large percentage of them are mismanaged.
What’s the solution? In my opinion, Google needs to take an active role in helping to educate their customers. They do a good job of getting people to try AdWords, but possibly too good! By making it seem simpler than it is and by not pushing education about conversion tracking and ROI, they ensure negative bottom line results, negative opinions about AdWords, and this could endanger their business model long-term.
Not only that- there are companies that depend on AdWords to the degree that they could pay an entry-level PPC manager a good at least part-time salary to optimize their results, but some refuse to do so. These companies reap that misery typical to those without the wisdom to pay for expertise- they miss the bottom line results they need.
These companies might be blameless to a degree, since it’s not obvious until you evaluate your results three to six months later that AdWords is quite complicated and requires special expertise and experience. And political problems can ensue from having to move your PPC management from an internal resource to an external one. The solution might be better training, but most of the AdWords training on the internet is not professionally oriented. Most of the AdWords information I’ve seen is partial, or focused on arbitrage, PPC as for affiliates, etc.
That’s why I’m working to create a more professional business-oriented training course for AdWords, and why I coach PPC managers (see www.AdWordsMan.com).
I’m astounded sometimes by what’s going on out there. For example, a marketer untrained in PPC called me. He had spent almost five figures on AdWords for a client, and had not yet installed conversion tracking (even though Google was helping him with his AdWords launch), and was worried about the lack of results. That meant he spent almost $10k ineffectively AND had not collected the conversion-related data that would help him optimize to spend more effectively. You can’t optimize without conversion tracking. So I spent an hour phone coaching him through setting up the tracking basics that should have been in place before spending even a few hundred dollars. It wasn’t his fault- no one told him how critical that was.
The most important thing to do in 2009 for the most effective online advertising channel is education. And I hope to be a big part of that effort. Read this column on SEJ and check www.AdWordsMan.com over the next few months to stay up on my coaching and educational offerings.
Brian Carter is the Director of Search Engine Marketing for Fuel Interactive, an interactive marketing agency in Myrtle Beach, South Carolina. He is responsible for the SEO, PPC, SMM, and ORM programs at Fuel and its partner traditional agency Brandon Advertising & PR.