Some retailers and traditional advertising agencies are not keen on using a company’s brand in a PPC campaign. There are two main reasons why I believe not using your brand power in PPC is a poor decision. These two reasons are not necessarily the ones cited by marketing managers as they might be hesitant to admit their real motives.

First of all, ‘brand management’ has always been the traditional marketing agency’s ivory tower. It is what they do and in a way, it is the only thing they do. Very little of their advertising spend has an accurately measurable ROI. These agencies do not want to cede any ground to PPC marketers because it is an area they tend to have very little expertise in and they just feel threatened. It is easier to convince their clients that brand bidding is pointless in PPC advertising and to retain exclusive control over a client’s brand.

Secondly, their clients listen because they are cost conscious. They spend large amounts of money on building their brand in the traditional media so why would they spend any more on PPC? Obviously, if consumers are searching for their brand on search engines that means they already know the brand. No need to spend even more money on PPC ads. All they need to do is sit back and hope that the consumer actually finds their site. Right?

As retailer, you are now reliant on the fact that your site shows up on top of the natural search results for the query that the user typed in on the search engine. This is a fair assumption if you have a well established website which was built using SEO best practices. But it is also a fair assumption that your competitors are bidding on your brand and that their ads will appear above you natural listings. Consumers are a fickle bunch and a well written ad might persuade them to shop at your competitor instead.

In addition, consumers will find numerous ways to misspell your brand name. Are you sure your site will come out tops for each of those misspellings? In PPC campaigns, Google will match your ad automatically to its misspellings and with one ad, you can target all those consumers who otherwise might never find your site.

Finally, more and more people (like myself) type a brand name into a search engine (it’s so tedious to type the ‘www’ and the ‘.com’) and expect the search engine to come up the with the site we’re looking for. Just check out the popularity of these two brands on Google. Do you really want to rely on natural search results to drive this traffic to your site?

Yes, it does not seem fair that you need to pay for your brand name in PPC campaigns when people could find your site through other means, but that is exactly what search advertising is about: making it easy for people to find what they are looking for.

PPC based brand bidding is not expensive relatively to bidding on more generic terms. Google will give you an excellent quality score when you bid on your own brand which means CPCs will be really low. But there are quite a few caveats which you should take into account when outsourcing your brand bidding to a PPC marketer. I will address these in a next post.

To conclude for now: brand bidding constitutes an additional cost to your brand building marketing campaigns but the cost is likely to be marginal. And for this marginal cost you can ensure that your potential customers do not get lost on the way to your site. A small price to pay I would say.

Most people who have some experience with PPC marketing will be able to tell you all about ROI, CPCs, conversion tracking and the likes. They will also tell you that adcopy is important and that it is a good idea to test adcopy variations to see which one performs the best. But as adcopy goes, that is where most marketers’ knowledge stops.

Most aspects of PPC are easily quantifiable which is why this marketing channel is so successful. You can measure exactly how much revenue your advertising spend is generating. But beneath the clarity of ROI, there a lot variables (known and unknown) at play. Variables which cannot as easily be measured.

The Cinderella of these variables is definitely ‘the adcopy’. Although search engines do try their best to assign a quality score to the adcopy, this quality score is only relevant to the advertiser because of its impact on the eventual CPC. It is nearly impossible to measure the impact of the adcopy on the psyche of the search engine user.

Forget about your portfolio of keywords, your adcopy is what users will eventually see in their search results. It is your virtual shop window and you should take great care in designing it. Unfortunately, search engines often have different ideas of what constitutes good adcopy.

For instance sometimes adcopy with a relatively low CTR proves to have an excellent conversion rate. This would be the type of adcopy preferable to an advertiser, because it reduces the amount of unqualified traffic. In a PPC model however, search engines have little incentive to reward adcopy with low CTRs. Cost per Acquisition (CPA) models should therefore gain more and more ground in the future as they align quality scores with advertisers’ goals.

Untill that happens though (Google’s CPA model is only in beta so far) don’t give up on experimenting with your adcopy. I would always focus on adcopy that converts best, and ignore quality scores initially. Once you know what it is that entices your visitors to convert, you can always try to make your adcopy more search engine friendly or create dedicated landing pages tailored to your adcopy.

By taking this approach, we managed in some cases to create adcopy with a CTR and conversion rate identical to the initial one but with an average CPC that was 30% less (and this without altering the keyword bids). Just play with the length and the phrasing of your ads without changing its meaning and you will be surprised at the impact on your CPCs.

Some people like to ignore adcopy optimization because of its unquantifiable properties but when you think of it, it is what makes search engine marketing an art rather than ‘just’ science.

Picture the scene, New York June 2007, I’m attending the LinkShare Symposium. An advertiser approaches says he has heard good things aboutClicks2Customers. He wants to know whether Clicks2Customers would be interested in working as an affiliate driving paid search traffic to his site; a site that would go on to win a golden link award that night. The advertiser was a large brand and niche with large product set which would provide multiple search permutations – a perfect fit to match Clicks2Customers capabilities.  The only stumbling block would be, could I get…  would he give…  access to the display URL? I answered in the affirmative, but explained that we only ever work if we could drive traffic directly to the display URL. So no jump pages or white labels; direct traffic only. He thought about this for a few seconds and then responded “what a novel approach”; seems no one had asked him for direct access before!!

So why have we as affiliates stopped asking? My belief is that it became too hard. The display URL is the Holy Grail and increasingly agencies and internal teams have made it their sacred domain. The reason given to the business decision maker, to restrict display URL is twofold. By the agency the reason usually provided is “ownership and management of the brand” and by the internal team its “to ensure their business does not pay an affiliate for traffic that they would have captured anyway as all the affiliate isdoing is stealing impressions from the internal team”.

So display URL s became increasingly restricted to the paid search affiliate channels and the agencies and internal teams won the war without a shot being fired! Should we blame the advertisers for making what we deem as rash decisions? No I say blame the affiliate who gave up so surprisingly meekly; surprising when one looks at the profile of the top affiliates – entrepreneurs that had been pioneers in the search industry.

It’s time we stood up and challenged the agency, challenged the internal team. For too long these two parties have managed paid search campaigns with all the protection needed to succeed; yet I can guarantee that 90% of all campaigns run by agencies and internal teams are run poorly. The business has no way of benchmarking whether the current incumbent is as good as the incumbent says he is. I believe the real reason that agencies and internal teams want complete control over the display URL is that they would be found wanting by any decent paid search affiliate.

Let’s challenge the current beliefs. Let’s educate the business owners. Affiliates will drive incremental traffic to a site given the display URL. They say all we will do is take impression away from them. I question what the price is that they are paying for that traffic. Bid on broad keywords at high cost per click and you will get lots of traffic. Does this mean you are running a good campaign? – NO!! It means you know how to waste money. And when ROI is questioned, search gets blamed as being too competitive; Google gets blamed for raising minimum CPCs. I say look at the team running the campaign. My tip to the business owner is look at what percentage of traffic is captured on the broads. If it’s a high percentage than you are paying too much for the cost per click and your conversion rates will be suffer. Should a high percentage of traffic be captured on the exact match then give your team a raise. Let’s challenge the business owner to test the team with the spoils going to the victor.

The current trends in the search engine marketing industry resemble the history of the diamond mining industry in South Africa. In the early days, anyone with a shovel could try his luck and start digging. Very much like the boom in affiliate marketing not so very long ago. But as the shallows sands of the Northern Cape yielded lower and lower returns, the opportunists left for greener pastures. Little did they know that underneath the rock layer much richer diamonds deposits were to be found. But mining these deposits required skill, technology and professionalism.

Today, the rush of affiliate marketing is over. It is increasingly more difficult for affiliates to compete profitably with other players in the market. Not only because companies place tighter restrictions on their affiliate terms, but also because traditional advertiser companies have smelled blood and they are using their deep pockets to corrupt the efficiencies of the affiliate model.

A bold statement perhaps, but we see evidence of this almost every day. The incumbent agencies have woken up to the fact that search engine marketing is not a fad and they are leveraging their client relationships to increase their search marketing portfolios. What they lack is the understanding of a marketing model which is performance driven and they tend to massively overprice their keywords. I find that traditional agencies are more often than not wasting their clients’ money and that they find it hard to catch up with pure-play search engine marketers in this fast moving segment.

The current state will only be a transition period because online, it is hard to hide poor performance. In the end, the pioneers who learned the ropes during the affiliate diamond rush will prove invaluable to traditional marketers and their clients alike to profitably mine the potential of the online consumer base.

Not everyone may like former internet and securities analyst Henry Blodget but generally I find his blog refreshingly honest and independent. Recently Blodget contemplated how long Google’s phenomenal growth could last. After all, it is easier to get to the top than to stay there and Yahoo and Microsoft are showing an increasingly dogged determination to reclaim some of the market share they have lost to Google over the past years.

Despite heavy investments in other areas, Google still makes almost all of its revenue from those familiar text ads and Blodget questioned how much longer it could maintain its stellar growth as advertisers are faced with increasing CPCs and decreasing marginal returns. Both Yahoo and MSN on the other hand have still relatively low CPCs so advertiser are incentivised to migrate some of their budgets to these search engines. But the response from search engine marketers was almost unanimous: despite lower margins, Google is able to deliver traffic volumes unmatched by its rivals and therefore it is simply not an option not to advertise on Google. Our experience is similar: outside the US, Google is almost the only search engine that matters, apart from a few local companies such as Baidu in China.

In the US, Yahoo and to a lesser extent MSN can deliver additional volume to mature campaigns but Google is generally the first choice when it comes to launching campaigns. In addition to volume, Google Adwords offers ease of use. This is not to be underestimated when managing many campaigns of various sizes. Yahoo and MSN completely rebuilt their advertising system in the past year but I can’t help feeling they somewhat missed the opportunity to offer simplicity. Just compare how long it takes to have a campaign up and running on Adwords vs. Panama (or -sigh- MSN).

All this admin is unnecessary overhead which adds to the hidden cost of running a campaign and it is something which Blodget didn’t incorporate in his argument. Google Adwords is not perfect and we regularly see peculiar behaviour that indicates that behind the scenes Google engineers do make mistakes. But the company is serious about search (and even more about search advertising) and seems far more proactive and aggressive defending its market dominance that its rivals appear attacking it. So although I won’t get into a discussion about whether Google’s market valuation is justified, I do believe that the company has not lost the drive and focus that made it thefifth biggest company in the US.

One of the stories that recently grabbed my attention was an article on PlentyOfFish.com. This free dating site almost epithomises the internet business model of the future: user generated content made possible by online advertising. I say almost, because the site is not quite ‘2.0′. In fact, it is a very basic dating site, and is hardly more than a user forum. But it is free, and according to this article it could be worth a billion dollars (by today’s optimistic valuations). It’s revenue all comes from advertising, mainly Adsense.

Adsense (or content targeting on Adwords) has never really been the prime focus for most PPC marketers. On forums such as Webmasterworld people invariably report mixed results from content targeting (more so than from search). Common complaints are low CTRs, low ROIs and high levels of click fraud. Nevertheless, Google reportedly makes 40% of its revenue through this channel and it is now allowing advertisers to hand-pick the sites on which they want their ads to appear, rather than rely on Google contextual algorithms.

So for some people, contextual advertising is obviously worth their while. As an advertiser, why would you want to consider contextual targeting and would you want to hand-pick the sites you want to advertise on?

I would argue that Google generally does a good job at matching your ads to content. ‘Relevancy’ is the cornerstone of Google’s success (not to mention revenue) so they are motivated to make sure you get quality traffic. But Google is also fighting a continuous battle with fraudsters who are incentivised to defraud the system because they share in the Adsense revenue. Advertiser can now exclude sites from their content targeting if they find that the traffic originating from them is of questionable quality, but there can be so many of them that is costly and time-consuming to weed them out.

Site-targeting eliminates that problem because it is an ‘opt-in’ rather than an ‘opt-out’ approach. You can choose to only advertise on site you trust. The trick is still to identify the right sites and I think the PlentyofFish example demonstrates that nicely. Advertisers like the site because people on a dating site are inherently searching for something (in this case, love). This makes the site very different from for instance a site like facebook, which is more used for entertainment and social interaction. Understanding the mindset of visitors and targeting ’searching’ visitors is key to running a site targeted campaign. The problem with site-targeting though is that competition for premium sites will soar, as will advertising costs.

But given the dynamics of the web there will be not be a shortage of new content and new customers anytime soon. All the more reason to get more familiar with contextual advertising.