Posts by Aaron:

The True Cost Per Conversion of Additional Conversions

11 Comments Written on June 26th, 2013 by
Categories: Analytics, Conversion

PPC managers have different targets for their clients. One of the most common targets is to manage the campaigns based on an average maximum cost per conversion (CPA).

What many clients –and PPC managers- don’t know or don’t realize is what the true cost of the extra conversions is. Even if the average CPA is below the maximum allowed CPA, the last conversions might be too expensive and maybe even leading to a loss for the client.

conversions-vs-cpa

Lets have a look at an example.

Example – the calculator shop

Assume you are managing the account of an e-commerce store that sells calculators. They sell for $25. The profit on a sale is $15, with just the ad spend to subtract from the profit.

You are currently managing the campaign and you get 100 conversions for a total cost of $1,000. This leads to a CPA of $10. The profit for the client is $500.

The client however told you the CPA could be $11 if he gets more conversions as the $11 is still well within his profit margin of $15. As a good PPC manager you started pushing the best keywords and magically knew to push 20% extra conversions until you reached an average CPA of $11. So you now have 120 conversions for a total cost of $1,320.

You are happy, the client is happy and you live long and happily ever after. But should the client be that happy?

If we have a closer look at the details of the additional conversions:

  • 20 extra conversions
  • $320 extra budget

This leads to a CPA of $16 of the additional conversion! He actually lost money on the additional conversions. The profit is now $480.

cpa-new-conversions

A visual representation of the CPA’s and profit margin

So are those additional conversions bad?

Not per definition as it depends on the goal of the client and other factors that we sometimes don’t know as PPC manager (profit margins, life time value of a client, branding value, increase of the market share etc). It’s important that both you and the client are aware of the price of the additional conversions.

About the author
Rick Vugts is the co-founder of Visible Online Marketing. Intrigued by both the psychological and marketing and the statistical side of PPC marketing.

How Does Groupon Win New Markets?

No Comments » Written on December 28th, 2010 by
Categories: Marketing

Part of Groupon’s growth strategy has been through acquisitions. But even outside of that, they still push into new cities and markets. Before they can offer a unique selling proposition to small businesses they first need to build an email list.

How do they get past the chicken vs egg issue? AdWords.

Here is an example ad

And here is a landing page that consists of little more than branding and a lead generation form.

In 2007 one of the types of websites that Google claimed might merit a low landing page quality score was “Data collection sites that offer free gifts, subscription services etc., in order to collect private information.”

Perhaps asking for email address only allows Groupon to get around that issue. More likely, being a well known brand in one market gives a merchant more leeway in other markets. And since Google tried to acquire Groupon, it is not likely that they can come down on Groupon without looking like it was done because the deal didn’t go through.

What makes the above “website” so hysterical is most affiliates wouldn’t even dare try it at this point for fear of burning their AdWords accounts. Adding to the absurdity is the footer links to terms & conditions & data privacy link to pages in GERMAN even though the URL has en_ in it. Of course they are growing like a weed and will do some things sloppy as part of that, but at least they get the benefit of the doubt from Google – something most affiliates won’t be getting much of anytime soon, as Google moves in to become the affiliate channel with offerings like Boutiques.com.

When you think about it, what is Groupon but a branded affiliate play? With scale, new opportunities appear. 😉

Google AdWords 4th Ad Slot Above Organic Search Results

10 Comments Written on August 8th, 2010 by
Categories: Google Adwords

Shortly after going pink, Google has now decided to extend AdWords by placing their comparison ads below the AdWords ads. so if you search for [credit cards] in the UK there are now 4 ads above the organic search results.

4 Google AdWords ads.

Thanks to Chris Angus for the screenshot.

In addition to including the comparison ads as a separate ad unit, you can see multiple of the AdWords ads in the above picture have sitelink ad extensions, which means that the #1 organically ranked site is the 11th link on the page. On Google’s last conference call Jonathan Rosenberg highlighted how this feature has moved from brand/navigational queries onto broader search terms like [flowers]:

The click to call ads on the high end mobile phones are doing very well. The click through rates go up 6% when you put ads with a phone number, 8% when you put a local address. So, click to call is doing very well. It’s easy to see some of those. If you want, just take a look for yourself if you tried travel agency from a smartphone, you will see under thousands of active campaigns on click to call, so you can take a look at that.

Site links is also making pretty good progress. We’ve given you examples on past calls where you type a big brand like Sears and then you see the more useful links that you can get through and the click through rates on those can go up as much as 30% over the ads without the site links. But we changed the way we do site links and we’ve added a new one line format. And that also allow site links to show up in more places. You can try flowers if you want to see that. Then the other format that’s getting some adoption is the – we are adding the seller ratings, which shows merchants ratings out of six stars aggregated from reviews on the Web. You see that if you look for things like digital cameras. And that’s doing pretty well as well.

The net result of new ad extensions and new ad formats is the organic results keep getting pushed down. Of course it only impacts a few results for now, but over time it will spread…just like Google Checkout buttons on ads, advertiser ratings, maps, product search, video results, and news results have. Each new feature gives your ads a new dimension to test. Couple in geo-targeting and dayparting and the possibilities are endless.

What Google AdWords Match Type is This? & Can You Opt Out of Such Tests?

No Comments » Written on July 6th, 2010 by
Categories: Google Adwords

Google recently announced the beta launch of a modified broad matching type in the UK and Canada, which is similar to old school broad match, back before broad became capacious.

And then, without announcement, they also launched inline search suggestions for related keywords on some search results. For example on the image to the right, you can see that a search for IP address has brought up ads for:

  • ip address trace
  • change ip address
  • find ip address
  • static ip address

Why wasn’t this (broadly visible) beta announced? A few ideas…

  • Bing has a similar feature in their organic search results, so perhaps Google wanted to borrow the idea without officially announcing it?
  • They have less certainty on its impact on yield?
  • They wanted to test its impact without warning advertisers into changing anything?

Those longer tail keyword variations often have a different (and more precise) meaning than the core keyword, which makes them more potent. And so AdWords advertisers are willing to bid more for those clicks. But if those longtail keywords are being charged for ads showing up on the core keywords that might lower aggregate searcher intent, eating into the profit margins of advertisers who bid up more specific keywords.

Which match type is being charged? Google hasn’t said. But some cursory searching for some of the above keywords makes it look like some of those ads might be phrase matched.

How does this impact search as a whole? Does it make search quicker and more relevant? During the famous “brand” update of Google’s organic search results last year, Google looked at query chains / search funnels to find sites that were often clicked on after the second search, and promoted some of those sites into a better position in the initial core search result set. Perhaps this is a better way for Google to make search faster and more relevant.


But even if the change works out good for searchers, as an advertiser, the impact on your account might differ.

If you had ads that were not shown for some broader keywords due to quality score issues, or some keywords where bidding on the broader variations typically produced losses, be sure to check to see if your ads are showing up via these inline suggestions & adjust bids as necessary. In some areas where bids are higher some of the additional exposure might be expensive. Hate to be the “hotels” aggregator advertiser paying $4 or $5 a click for the curiosity clicks on searches for “Oakland.”

Its even worse when you consider Google’s recent big move into the travel market, and past nibbles into the hotel space.

Online Google AdWords Training

2 Comments Written on June 7th, 2010 by
Categories: Marketing

Back when I got into SEO part of the reason I wasn’t too into PPC back then was because I had limited cash, but another big reason I wasn’t big on it was because it seemed so simple and boring. Over the past couple years that has changed a lot!

Today Google AdWords is far more complex than SEO was in 2003.

With that complexity there are additional opportunities for some & additional expenses for others. But keeping up with all the changes is easily a full time job.

Noticing that trend, and seeing stuff like the below image, I thought it made sense to try to create something great servicing the AdWords / PPC market.

Google keeps controlling more real estate, and if you are not leveraging AdWords then there is a chance your business could eventually get pushed “below the fold” – perhaps not for longtail keywords…but certainly for the highest traffic and most valuable keywords in your industry. Google recently launched their vertical search panels, and to some degree you can think of many of these as what will eventually amount to some form of an ad channel (or a channel which promotes content from premium related partnerships with Google).

I am decent at AdWords, but my level of proficiency is nowhere near my level with SEO, and so we needed the help of someone else if we were going to make sure that we had bar-none the best product/service on the market. And so we decided to partner with Geordie to turn PPC Blog into a great membership website which mirrors this one.

Off the start access costs $179, but Geordie and I wanted to offer our blog readers a recurring 30% discount off of that, by using this code
EF0

This coupon will work for the first 100 subscribers, and then after the discount will no longer be available.

You can join here
http://ppcblog.com/member-tour-seobook/

Just like with SEO Book, you can cancel anytime and are under no obligation to stay any longer than you find it valuable to do so. If you do any serious amount of PPC it is quite easy to find a few tips that help you save $5 or more a day, especially when you consider how much PPC stuff Geordie has done (he has managed millions/yr in ad spend for the past 4 years & has brain dumped everything he knows) & how high quality the membership will be.

60+ training modules and a friendly PPC focused forum await you 😀

Yahoo! Publisher Network Dies

2 Comments Written on March 31st, 2010 by
Categories: Contextual Advertising, Microsoft Adcenter, Yahoo

Just got this via email:

Yahoo! continuously evaluates and prioritizes our products and services, in alignment with business goals and our continued commitment to deliver the best consumer and advertiser experiences. After conducting an extensive review of the Yahoo! Publisher Network beta program, we have decided to close the program effective April 30, 2010. We expect to deliver final publisher payments for the month ending April 30, 2010 to publishers no later than May 31, 2010. All publishers eligible for 1099s for the 2010 tax year will have those mailed by January 31, 2011.

Because our content will no longer be delivered to your ad unit spaces after April 30, 2010, we recommend removing all YPN ad code from your pages by that date.

For the opportunity to continue earning revenue, we suggest using Chitika, a leading advertising network that syndicates Yahoo! Content Match and Sponsored Search ads. Chitika has set up a special process for YPNO beta publishers to participate in its platform. Click here for more information.

Sad to see Yahoo! either bowing out from and/or outsourcing so many of their businesses. Given Yahoo!’s huge reach as a publisher and the idea behind audience matching at the likes of Quantcast, Yahoo! should have been fairly well positioned to run a distributed ad network. But since they sold off search they just keep cutting pieces. I would have thought that running a contextual network would have been additional free volume Yahoo! made while creating optimization algorithms for their own properties.

Given their pending tie-in with Microsoft, it is a bit surprising to see them recommending Chitika (though the recommendation is a nice win for Chitika). Part of selling the search tie up deal with Microsoft was the idea of economies of scale driving increased yields. And now AdSense (which is already probably at least as dominant in contextual ads as Google is in search) just lost another competitor. For as saturated as online ad networks are, it is surprising that AdSense has such a big lead and that Microsoft didn’t make catching up with PubCenter a higher priority.

Creating a distributed ad network would give Microsoft 5 big weapons in the search game

  • collecting lots more data about the web
  • more direct relationships with many webmasters
  • forcing Google to cut their margins on the distributed ads (if they want to bleed you dry on Office then reciprocate the favor on their AdSense ads)
  • the ability to have a network to re-target searchers on
  • having a backfill set of inventory to do some home cooking, promoting new releases and the Bing brand for pennies on the Dollar, just like Google did with Nexus One

One strategic positive for Yahoo! is that they have pushing harder into the original content development, but if they become more profitable with that will some of their content licensing partners start increasing their rates?

And if there is any sorta sustainable economic rebound (doubtful), then I would give it 2 to 1 odds that Yahoo! buys Chitika in the next 3 years 😀

Incentivizing Click Fraud on the Google Content Network

No Comments » Written on February 16th, 2010 by
Categories: Contextual Advertising

The single biggest reason Yahoo! had to gut their search efforts was that they offered a syndication network with tons of fraudulent search distribution, and never let you opt out of it until 2010. It killed their click value and simply made it impossible for them to create enough yield on their core search traffic.

Google has long allowed advertisers to opt out of the content network and many search partners, and that has made their core market healthy. And given their efforts to detect fraud (and how smart pricing works on content websites) they have de-incentivized fraud to some degree. But now that content mills are being built, that trend may soon swing in the other direction.

With Demand Studio’s new revenue-sharing project, they encourage writers to share content with their relatives:

The more high quality links to your article there are on the web, the more highly a search engine will rank it. … Your family and friends are probably curious about what you are writing anyway. Send them links and invite them to take a look!

Given that authors are paid on revenue share, what is the chance that say 5% or 10% of them will also ask family members to click on the ads while viewing the page?

How could Google catch it?

You could say I am cynical, but human nature is predictable and many of the kinds of people who work for the content mills will do anything to make a Dollar. Laws exist to catch the bad actors, but when the publishers are encouraging the creation of distribution amongst friends & family and the party responsible is concealed from Google, the incentives are aligned against the interest of advertisers.

As fraud seeps in slowly, eventually it will become expected…either you engage in it, or your become an economically inefficient piece of the web – a relic. And most advertisers won’t know why their profits have dropped with the increasing number of clicks. Some will filter, but most of them will just lower their bids on the content network (or simply turn it off, as many did with Yahoo!), which in the end harms the legitimate publishers who run AdSense ads.

On one front they are stealing your content, and on the next they are destroying the value of the ads you carry. Like it or not, if you are an online publisher who depends on ad revenues it will impact you.

The incentivized publishers are pushing into the big money categories. Jason Calacanis outrageously suggested investing in people asking big money questions:

If I was a smart person I would INVEST in asking questions of high CPM value (i.e. mortgage, drugs, products, etc) and give them a nice M$3 tip. If you do that 33 times I’m betting you would make the M$100 back. 🙂

The suggestion of the free virtual currency flowing back and forth really highlights the end goal of such efforts. How long will it take advertisers to notice?

Outside of Mahalo & eHow, what other sites are engaging in the incentivized publishing programs? What sort of ROI have you seen from them? And how do you expect that to change going forward?

Profit With Yahoo Search Marketing Ads

8 Comments Written on February 9th, 2010 by
Categories: Yahoo

Yahoo! Search Marketing has long failed to innovate at the pace of Google AdWords – with a less sophisticated quality score, more limited negative keyword filtering, and making it quite hard to block many forms of rampant ad syndication & click fraud. Sometimes if you tracked the scam clicks it was possible to get a refund, but even so you couldn’t get a refund for your time. And for that reason (plus falling search marketshare) many PPC advertisers have simply ignored Yahoo! Search Marketing.

Panama was the much hyped platform that never delivered, and in October of last year Yahoo! announced that they were going to launch a Search Marketing Desktop editor, but of all the tips, tools, and tutorials one can offer for how to succeed in Yahoo! Search Marketing, the #1 strategy today is to simply block the network syndication offering mystery meat distribution. Up until this past month it was literally impossible to do!!! But now you can, and so Yahoo! might be worth another look if you have written them off in the past.

At the end of January, Jonathan Beeston highlighted how in Efficient Frontier‘s latest search marketing data Yahoo!’s syndication network was over 50% of their distribution, and how those clicks were only worth roughly 40% of the value of Yahoo! search clicks. Simply by filtering out the Yahoo! distribution network you are able to filter out most of the fraud and just buy the clean search traffic.

How do you filter Yahoo! network traffic?

Click into a campaign

Click to edit the campaign settings

In the right rail click on the network distribution settings, adjust them to Yahoo! Search only, and save the campaign

When you are done you should see the following

Expected Results?

Results will vary by market, but in a Webmaster World thread on this topic one advertiser mentioned that filtering out the partner network increased their quality score and doubled their ad distribution overnight.

If you were getting some value from the Yahoo! Partners it is worth setting up a separate ad group to target it so you can use lower bids on the partner network and quarantine the often shifty and opportunistic partner network budget from your core Yahoo! Search Marketing ad budget.

Have a Yahoo! Search Marketing Coupon?

Yes there are many Yahoo! Search Marketing coupons to be had. Here is one, which is distributed through CJ: Yahoo! Sponsored Search connects businesses and customers online. Sign up and get a $25 credit.

If you hunt around the web you might be able to find other coupons as well. And some books on PPC also contain various discount vouchers & promo codes. If you find other discounts please post them in the comments below.

This Thin Affiliate is STILL Killing it on AdWords

1 Comment » Written on January 9th, 2010 by
Categories: Affiliate Marketing, Google Adwords

Seth Godin mentioned it is easier to change with the market than it is to change the market:

Just because you’re good at something doesn’t mean the market cares any longer.

It’s extremely difficult to repair the market.

It’s a lot easier to find a market that will respect and pay for the work you can do. Technology companies have been running this race for years. Now, all of us must.

With that in mind, Google long ago highlighted that they didn’t like certain advertising arbitrage business models. Last year they went one step further by releasing a video claiming how searchers are demanding more for advertisers.

One of the factors among many that will be key for marketers to be successful moving forward is that they’ll increasingly need to think about acting like a content creator, or thinking like a publisher is a way to think about it.

When you walk into a bookstore, a Borders, there’s 500, a thousand magazines on the shelf, and each of those publishers is thinking about not how to stop, shock, interrupt, or detract that reader. They’re are thinking about “what is that I can say in this moment that will be helpful content to a reader”.

The above such claims were, of course, nonsense. They are not what the marketplace demands, but are just a reflection of Google’s desire to sell more keywords and push advertisers toward buying more along the search cycle. But they have enough search marketshare that in the worst economic climate in nearly 100 years they can chose what money they want to take and what they leave on the table.

Thin affiliates are viewed (at best) as unneeded duplication in the marketplace, and (at worse) purveyors of scams and spreaders of fraudulent offers. Most of the affiliate market could be clean, but the 2% of the market operating at scale with shady practices did enough damage that Google would rather flush the business model than spend time sorting through it.

Perry Marshall tied in recent AdWords marketplace changes for affiliates to the above concept that it is easier to change with the market than it is to change the market:

As of today, in some categories, the number of advertisers has gone from 50 to 5. The land has been cleared for people who create original products. A lucrative opportunity for content creators.

But the only way you can survive as an affiliate on Google now is to have a website with a lot of great, original content, and an email list.

If you’re gonna do that…. you might as well have original products too :^>

It is nice to believe that we have Google’s power to change the market or that we can make the market like it once was, but profit is rarely (never?) created by wishing time goes backwards.

If you know how to do targeted advertising it is not hard to take that knowledge and create a niche vertical product around it. Lower margin and higher maintenance (at least off the start) than slinging bits, but over time as you build brand awareness, social connections, get marketplace feedback, and build organic traffic streams you enjoy margin expansion.

Oh, and that thin affiliate who is killing it on Google AdWords… well you already know who they are. Once you own a big slice of media, you can set the rules as you wish. 🙂

What if Yahoo! Search Marketing Was Smart?

3 Comments Written on October 13th, 2009 by
Categories: Yahoo

I was reading Twitter today and saw Yahoo! Ads Buzz share a link to a Search Engine Watch blog post highlighting trends in paid search. Both Bing and Google keep growing year on year, whereas Yahoo! Search Marketing has just been decimated.

The shocking thing is that Yahoo! would even want to share a link that showed how badly they are losing marketshare in the paid search market. Or that they would be able to see the stats and not understand what is causing the issue, in spite of people spelling it out publicly and thousands of advertisers complaining about it.

As my buddy Sean Turner described via chat…

To break it down, yahoo gives you a feed for seobook.com & you give me a feed for turner.com. But all links that are clicked on turner.com redirect through seobook.com so that it shows up in customer logs as seobook.com If you block seobook.com, it will block ads from seobook.com, but not turner.com. The blocked domain tool works on what domains display, not on where the feed is redirected through. So if you are a customer, there is no way to know that turner.com is sending traffic (since it’s redirecting through seobook.com) and no way to block it through seobook.com since that tool only works on the domain that is actually displaying it.

I found it because we kept getting traffic from gogogo.com. We had blocked it over and over and couldn’t figure out why they kept sending us traffic. We couldn’t find our ad on their site. I went to live.com and ran a site:gogogo.com search and found that it indexed some of those landing pages that use gogogo.com as a monetization service.

Yahoo!’s lone bright spot in the search market is their BOSS service. And now they are letting BOSS syndication partners monetize with Yahoo! ads, but they are being stupid about it – forcing you to go through a 3rd party partner so they have no way to clean the good from the bad.

Economic incentives are pretty easy to understand. Let people mix in junk with good stuff and they will keep watering it down.

There is an endless supply of fraud willing to take free money.

You only need to look at this 1 chart to see how bundling syndication and scams with search causes fraudulent activity. Advertisers are not stupid (especially during recessions). Which is why they have opted to shift ad dollars away from Yahoo! toward the other search engines.

Update: It looks like as part of a class action lawsuit Yahoo! is required to create an ad distribution channel that allows option out of many of the syndication types:

“Premium Providers” means: (a) all web sites and web pages (including any microsite), software applications and other properties on the Internet that are owned or operated by Yahoo!; and, at Yahoo!’s option, (b) all parts of the Distribution Network other than: (i) domain name parking sites; (ii) bulk registration sites; (iii) “pop-up” or “pop-under” windows; (iv) typosquatting sites; (v) “sliders”; (vi) “sidebars”; (vii) “injected ads”; or (viii) unsolicited spam email.

And in spite of that they still are running BOSS syndication through a 3rd party partner.