Welcome to this interview of Brad Geddes, one of the world’s leading paid search experts, Founder of Certified Knowledge, and author of “Advanced Google AdWords.” At Affiliate Management Days East 2012, Brad’s keynote speech will focus on: Building a Brand When No One Cares Who You Are.
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Question: What are the major challenges you see your paid search clients struggling with these days?
Brad: One of the major challenges these days is legacy structure and decisions. These two items often hamper their ability to take advantage of new paid search opportunities.
Many companies did a great job of setting up and managing PPC five to ten years ago. However, accounts continue to grow as new products and promotions within a company occur, or new paid features are released. Many companies used a path of least resistance with these changes to their account. As a result, their accounts have grown unwieldy to easily manage or gain insight into the overall changes to their profitability.
Taking a step back and looking at the big picture can help you get a better direction in how the account, or even the paid search teams, should be structured and can help save a lot of time and gain new efficiencies.
The other area where we see a lot of people struggling, and others absolutely succeeding, is with Google’s display network. There is so much inventory, so many options, and a lot of bad advice about display that we often see huge gains in accounts on display once an actual plan is put into place.
Question: What are the most frequently overlooked opportunities?
Brad: Display is definitely the most overlooked opportunity. Many companies struggle with it and abandon it. They aren’t taking advantage of what is there.
The other is segmentation of the ad serving. Each company’s segmentation will be different. But if they were to examine their data by device (mobile, tablet, desktop), geography (metros, states), and date information (hour of day, day of week, etc.), often there are new ways to increase the targeting effectiveness.
Another mistake and overlooked opportunity is sitting in someone’s abandoned analytics account. Often, PPC managers just look at conversion stats in the search engine or their internal systems and don’t examine the analytics. Analytics can give you so much insight about traffic, regardless of the source, that most companies have information sitting in front of them that they could analyze to make better decisions.
The last one is having a good testing methodology. Many companies know they should test, and many do. But having a system for testing and analyzing the results at scale can increase how much impact the testing really has on the account.
Question: When it comes to affiliate marketing through PPC, I’ve found averages to be most dangerously misleading (as for example EPC). Can you give us 5 other metrics that shouldn’t be taken at face value (and why)?
Brad: I think the worst offender is average position. I see companies bidding to a position when they are measuring the data on revenue per click. You should always use metrics that are in line with your end goals. Average position and cost per click are more or less linear and if you bid more than you are making per click just to keep a high position then you will end up going out of business.
Another metric that is often overanalyzed is Quality Score. While Quality Score is very important, it should not take precedence over revenue. Having a 10 Quality Score just means Google likes you, it doesn’t mean you are making money. Once you test, you will often see that having a 5-7 Quality Score can be more profitable than a 10.
Conversion rates are often given too much weight. Especially on display or with ad testing. With display, the costs per clicks can vary so widely that you are better using a CPA bid model.
While conversion rates are extremely important, you should use a PPI (profit per impression) or CPI (conversion per impression) testing method for search ads and not just straight conversion rate. If your conversion rate is exceptionally high, but no one clicks on an ad, then the scenario can lead to less profits than if you have a lower conversion rate ad but one with a higher click through rate. That’s where measuring from the impression gives you better insight into your ad tests.
Bounce rates is a metric that is useful. But you need to be careful with it. A bounce in Google Analytics is just a one page visit. If someone gets to your site and calls you, clicks on your PayPal buy button, or clicks on a merchant’s link and leaves your site from page one – these are all bounces. They are good bounces, but they are bounces.
Bounce rates is a great metric if you have made sure that the above situations aren’t recorded as a bounce – but few companies have configured analytics to measure good one page visit scenarios.
The last metric that I think a lot of people struggle to give weight to is view through conversions as it can lead to a lot of false information. Many systems do not dedupe view through conversions. Therefore, you might have 3000 view throughs but only 10 sales. If the data is deduped and used correlationally, then it can be very useful. When used in isolation as a bid metric, it can lead to a lot of bad bids.
Question: If a merchant is running their own paid search and also has an affiliate program, what advice would you give them to ensure that the latter doesn’t cannibalize but compliment the other?
Brad: That really depends on how sophisticated the merchant is at paid search. Personally, if the merchant is good at paid search, then I have a tendency to be more restrictive in how they handle affiliates than if the merchant is not very good at paid search. If the affiliates are better than the merchant, then give your affiliates a bit more room.
Sometimes, this isn’t the merchant’s paid search teams fault – it’s a legal one. Some merchants have all their offers go through legal before they ever go live. In this case, your affiliates can be more flexible than you can be, so leverage that flexibility. The other aspect is how much the merchant wants to dominate results versus have the best ROI.
For instance, I see a lot of companies letting affiliates bid on lots of terms, but the merchants will either restrict the ad position or the max CPC so that their ads are always above their affiliates to help promote their own brand. I know one company who, every Monday, gives bids to their top affiliates based upon the previous week’s conversion rates and EPC. If a merchant is good at paid search, then making sure your ad appears in the top positions is a good idea and lets your affiliates have the rest of the traffic.
In fact, I find that a lot of merchants do not want affiliates to bid on any brand terms. I think this is a mistake in many cases. The more ads that lead to your site or your affiliate’s sites, the more total traffic you will have. I’d recommend, instead of not allowing affiliates to bid on your brand terms, to just make sure they are not above your ad for brand terms. This allows you to make sure you really dominate the ads.
The one exception to this rule is if your brand terms have no other ads on them. In this case, you are the only ad and the top organic (hopefully) result. Therefore, you might want to restrict affiliates in that case. Of course, to do this well, you often have to help with landing pages so they are unique for the affiliates.
I find that some merchants will give their affiliates template landing pages so that the affiliate can bid on a term and send it to their site to get around Google’s ad serving policies. However, if these templates become very common, then sometimes Google steps in and groups all the affiliates together so that only one can ever serve the second ad.
You are better off giving affiliates help, ideas, and advice in how to make their pages unique from your other affiliates so that these pages have different experiences and Google doesn’t lump your affiliates together rather than just giving them templates. This is obviously more work, but when you do this, your affiliates bring in more sales through having different messages on the various sites.
Question: Finally, give us one good reason why etailers and affiliate managers should attend your closing keynote session at the upcoming Affiliate Management Days East 2012.
Brad: Building a brand is difficult. Consumers have so many options. For most brands online, standing out and building brand loyalty or even a social following can be extremely difficult.
However, when you have a semi-recognizable brand (it does not have to be a top brand), then your click through rates for both organic and paid go up, usually your conversion rates increase as well, and you receive more traffic from a larger variety of sources. This is how you build a sustainable and growing business – by not just being good at paid search or organic or social – but by building a brand through these channels.
I’m going to talk about a company that no one cares about (consumers care about their products and services – but not them) who still managed to build a brand that has had positive impacts on all of their marketing channels.
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Affiliate Management Days takes place October 9-10, 2012. More information about Affiliate Management Days being held in Ft Lauderdale, can be found here. Or follow the hashtag #AMDays on Twitter. Register using code SBTAM150 to receive $150.00 off your pass.
Be sure to check out the rest of the interview series from #AMDays.