Ten Tips for Maximizing ROI on CPC Advertising
February 2007
Years ago, it was common for people to say how great cost per click (CPC) advertising was. With bids for many keyword phrases in the nickel to quarter range, it was easy for advertisers to achieve incredible returns on their advertising expenditures with Overture (Now Yahoo Search Solutions) and Google AdWords. Now that bids have increased in many industries, fine-tuning one's keyword buying program is essential. Here are ten tips for improving the return on your cost per click advertising campaign.
1. Don't Limit Your Keywords
Many advertisers focus their CPC programs around keyword phrases that have the largest search volumes because these keywords are likely to send the most traffic to the site. Of course, if all you want to do is generate exposure for your site, this logic can't be argued. However, numerous studies show that it is more specific keyword phrases that have more success in converting traffic into sales or leads. Interestingly, since many people overlook these phrases, the bids on them are often much less expensive as well. Therefore, our advice for maximizing ROI typically involves bidding on a very large universe of highly specific keywords.
Keyword databases like the Google Keyword Tool and Wordtracker can be very helpful in identifying these more specific keyword phrases.
2. Choose Your Matching Options Carefully
When setting up a cost per click advertising campaign in either Google AdWords or Yahoo Search Solutions, you will be faced with options for how you want to target your keywords. Broad Matching will generate the most traffic and typically have the lowest ROI while Exact Matching will generate the least amount of traffic at the highest ROI all other things being equal. It is typically wise to set up conversion tracking to help determine which method is best for your program.
3. The Challenge with Content Matching
Although content matched CPC advertising has been around for a while, it really took off after Google introduced AdSense. This promotional tool allows almost any website owner to publish Google AdWords on their site. Conceptually, this sounds great as you can now get traffic from hundreds of related sites without having to place ads with each one of them individually. The challenge is that you have no control over where these content ads are showing, so it must be done with some care. Content matching can be very cost effective in many industries and return a positive ROI, but it is important that you understand the differences that it has to traditional CPC advertising.
4. Create Effective Titles
There are no perfect guidelines for writing good titles. The facts are that you only have 40 characters in Yahoo Search and 25 in AdWords and that the search keywords are published in bold characters. We find that including the keyword and using very factual statements typically provide the best Click-Thru rates. We also advise clients to include their brand name in the Title so that they can get the brand exposure even if people don't click on their site. Most importantly, don't make the mistake of using one Title and Description for all of your ads.
5. Utilize Bid Management Software
One of the easiest ways to increase your ROI in Yahoo Search is to take advantage of bid gaps. Specifically, in Yahoo Search you will only be charged 1 cent more than the bidder below you. Oftentimes, you will find that you are engaged in a price war with other bidders and the bid management software will allow you to set parameters to take advantage of bid gaps. For instance, you can program the software to make you the number one bidder unless you can save at least $.50 per click to drop to the second spot.
6. Design Effective Landing Pages
While it may seem logical, sending every visitor to your home page is often not the ideal method to increase ROI. One rule of user navigation is to get visitors to the information in as few clicks as possible. With pay per click advertising, we have the opportunity to send visitors to the exact page that we want them to visit. Make it count. If your site is all about "coffee makers" and one of your most important search terms is "commercial coffee makers," then design a page that specifically highlights all of your commercial models.
7. Use Multiple Campaigns in Google AdWords
One of the most common mistakes we see is that AdWords advertisers will create just one ad for their entire campaign. Although it takes more time to set up multiple campaigns, doing so is one of the primary keys to improving your ROI with AdWords. We also recommend setting up different bids for different keywords to avoid overpaying for the less competitive phrases.
8. Understand the Buying Cycle
While buyer behavior will vary slightly from industry to industry, the buying cycle is typically viewed as a three-step process:
1. Information Gathering
2. Shopping
3. Buying
Someone looking for coffee makers for their employee cafeterias may start by searching "coffee makers." From here, they may realize that they really want to look up "commercial coffee makers" or possibly "Brand X coffee makers." Once they've narrowed down that they want a Brand X Model A commercial coffee maker, they may then search for the best value offered.
It's important to understand where your company wants to target its efforts. The Manufacturer of Brand X machines may want to focus its ad dollars on the more generic information gathering and shopping terms like "coffee makers" and "commercial coffee makers." Assuming that the manufacturer does not sell direct, they can often rely on organic rankings and the rankings of their distributors to satisfy specific requests for their brand.
eCommerce sites are typically going to see their best ROI for those specific keyword phrases represented in the buying phase. Our point, however, is that one has to identify his/her goals in order to properly target their campaign.
9. Track Your Conversion Rates
Both Yahoo Search and Google have easy-to-install free tracking systems for measuring their success. Many web analytics programs can also be configured to tie pay per click ad performance to sales or lead generation. This data can be incredibly helpful in fine-tuning a campaign to improve its ROI.
10. Focus on The Majors First
Many small Cost Per Click search engines will market their products as cheaper and consequently able to provide a higher ROI. Our experience indicates that while the bidding is less competitive, the conversion rates with most of these search engines is typically very low. This is not to say that secondary CPC engines like FindWhat or vertical search engines can't provide a very good ROI, we have simply found that most do not.
At Captiva Marketing, we specialize in managing pay per click advertising programs as part of our of comprehensive search engine marketing programs. To discuss your goals with a search engine marketing professional, please call us at 1-877-227-8382 or fill out our contact form.
