Feb 16, 2016
Pay-per-click (PPC) marketing can be one of the most effective or most frustrating ways to grow your business. For example, I’ve used PPC to grow a client’s business from 20 employees to over 250. However, for every company with that sort of success story, I’ve seen dozens of others who have wasted millions on PPC. In my experience, most companies have a hard time unlocking the potential of PPC because they make a few simple mistakes. The sad thing is, these mistakes are both preventable and easily fixable! So, why do PPC campaigns fail? In this article, we’ll discuss 5 of the most common PPC mistakes that cost companies thousands each month in wasted ad spend and lost profit and the best ways to avoid making these mistakes.
But Jake, you’re probably thinking, Cost-Per-Lead is how I know if my PPC ads are producing results! I have to obsess over CPL! That’s where you’d be wrong…along with most PPC account managers. In recent years, PPC best practice has slowly shifted from optimizing for clicks to optimizing for conversions. Although that’s certainly a step in the right direction, Cost-Per-Lead is an indicator—rather than a measure—of PPC success. The problem is, vanity metrics like CPL don’t guarantee profitability. I’ve seen literally hundreds of PPC campaigns with excellent CPL that still aren’t profitable. Sure, CPL can be a great campaign health marker—but if the campaign isn’t profitable, it’s not worth running.
Instead of focusing on indicators like CPL, focus on profitability. To do that, you need to tie your PPC campaign data through to your bottom line. You should know which keywords drive the lowest cost-per-sale, which search terms produce the most revenue and which ad copy creates the greatest Return On Investment. The best way to set this sort of tracking up is with a CRM like Salesforce, Marketo, Infusionsoft, etc. I won’t lie to you, this will take some effort, but the results will have a profound effect on how you approach PPC advertising. For example, one of our clients started tracking their AdWords results through to sales and discovered that the cost-per-sale of one of their most “successful” campaigns was actually more than twice as expensive as their other campaigns!
On the surface, this campaign was driving twice as many leads at a 50% lower CPL, but the leads turned out to be low-quality. They weren’t turning into sales.
Once we discovered this, we were able to adjust their bids, keywords and budget to bring things under control. Leads went down, CPL went up…but profitability improved dramatically. Can you see why profitability is so much more important that CPL? Getting at your profitability metrics takes some extra work, but it empowers you with the information you need to make the decisions that truly affect your bottom line.
Remember the old 80/20 rule? Turns out that it holds true for PPC as well. In the past two years, we’ve audited over 2,000 PPC accounts at Disruptive Advertising. Across all those accounts, we discovered that the average PPC account is producing all of its sales from just 12% of its keywords. Yes, you read that right. All of its sales. In other words, if your account is like the average AdWords account, 12% of your keywords are responsible for all of your sales. But, according to our research, the non-performing 88% of your keywords eats up 61% of your ad spend! Most companies know what their good keywords are. The problem is, they also bid on a bunch of extra keywords in the hopes of acquiring extra business. It’s not a bad idea, but it rarely works out.
Fortunately, this problem is fairly easy to fix. First off, if you’re using broad match—knock it off! Yes, broad match is the default match type, but that doesn’t mean you should use it. Next, you need to identify your budget-sucking keywords and search terms. To do that, open AdWords, go to your Keywords tab and click “Search terms.” From there, you can create a filter for “Conversions < 1” or something similar to get a good feel for how many search terms aren’t producing conversions. With this report in hand, you can start eliminating your poor-performing keywords and focus your budget on the keywords that drive real value for your business. Overall traffic might drop, but since the wrong traffic never converts, you can expect to see higher conversion rate and more conversions. After all, you’re paying for what works now!
Here again, this mistake seems a bit counter-intuitive. The higher you bid, the more your clicks will cost, right! That’s true, but there’s another factor you need to take into account. Click-through-rate and ad rank go hand-in-hand. As ad rank increases, so does the number of clicks. Guess what? Early on in a campaign, you need clicks. The longer it takes to get clicks, the longer it takes to figure out which keywords, ad copy and landing pages produce the best results. If you slowly increase your bids, you actually end up spending more on your bad ads and keywords. More importantly, you’re losing potential conversions to your poor-performers. So, in reality, although slowly increasing your bids feels like a good way to save money, this strategy actually loses you money in the long run.
Instead of starting low and working your way up, it works better to start high, get the data you need and then dial back.
For example, if Google recommends bidding $10, bid $30-$50. Your actual cost-per-click will only go up a couple of bucks, but you’ll get the click volume you need to quickly decide whether or not your campaign strategy is viable.
Now, it’s important to note that this strategy only works if you’ve got a consistent and compelling funnel set up for your PPC campaigns. If your keywords, ad copy and landing pages don’t have a spot on, consistent message and a compelling offer, you can spending a lot of money and learn very little. When it comes to testing, the initial goal is to establish viability, not profitability. Once you’ve proven that your campaigns effectively drive sales, you can cut back your bidding strategy and focus on profitability.
For many companies—especially lead generation campaigns—phone calls are often one of the most important sources of leads and sales. However, despite the importance of leads and the availability of call tracking platforms like Google’s call forwarding feature, most companies still aren’t tracking their phone calls effectively. If you aren’t tracking your calls, you can’t tell which channels are producing which sales…which means you don’t know which campaigns are truly profitable (see mistake #1).
Thankfully, call tracking is relatively easy to implement. For example, you can use a forwarding number in your ad copy call extensions and record calls down to the ad group level. You can also place a simple piece of code on your site that dynamically replaces your onsite phone number with a forwarding number, allowing you to track which campaigns generated which calls from your website. To make sure you can associate your keywords, ads and calls with your actual sales, I recommend using a platform like Call Tracking Metrics or Five9 that integrates smoothly with your CRM. It takes a bit of extra effort, but adding this sort of call tracking makes the difference between average and powerhouse PPC results.
Ever notice how all the PPC ads for a search seem like variations on a theme? Sure, they are all competing for the same search intent, but it’s tough to get noticed when you look and sound like everyone else. Now, there’s nothing wrong with learning from the competition, but most PPC account managers end up writing “me too” ads that are largely indistinguishable from their competitor’s ads. The problem is, even if you’re sitting pretty at the top of the page, you won’t get much attention if you don’t stand out in some way.
To create standout ad copy, you need to focus on the pain point your offer solves for your target audience. Put the pain point directly in your ad copy. Now, you can find a variety of creative ways to address that pain point, but keep the emphasis on the pain point.
Remember, people are looking for companies that understand their problem. If you understand their problem, people will assume your solution will fix their problem.
After auditing over 2,000 PPC accounts, I’ve seen firsthand how these 5 PPC mistakes cost companies thousands-to-millions each month. Fortunately, with a few simple fixes, you can take a poorly performing campaign and turn it into a cash cow! You’ve heard my 2 cents, now I want to hear yours.What are some of the challenges you’ve run into with PPC marketing? Are there any common mistakes or quick fixes you’d add to this list?
About Jacob Baadsgaard
Jacob is passionate entrepreneur on a mission to help businesses achieve online marketing success. As the Founder & CEO of Disruptive Advertising, Jacob has created an award-winning, world-class organization that has helped over 2,000 businesses grow using pay-per-click advertising and conversion rate optimization.
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