| 1:29 am on Dec 2, 2009 (gmt 0)|
I checked it out when PPC first came out and the ROI just didn't make sense in my case, eg. Paying $1.50 + a click on keywords for a product that sold for under five bucks...... I spent all of my time on SEO and organic traffic and it's worked well for me.
| 2:32 am on Dec 2, 2009 (gmt 0)|
How long do you keep the PPC tap off? To get rid of a lag effect of people who have clicked in the past it needs to be off for awhile. Otherwise it just looks temporarily like you are saving money.
| 6:04 am on Dec 2, 2009 (gmt 0)|
We have reduced our PPC by about 50%, and have seen no discernable difference, our sales are about the same or better. We cut it down back in September and checked the stats today, and could see no real difference either way that I could attribute to PPC or lack of.
Over the next couple weeks I am going to reduce it a LOT more. Giving up on the "big" keywords, and anything that we show up in search results for. Going to target a bunch of the "down in the mud" keywords - those that usually sell for about 10-20 cents - for specific brand items and part numbers.
We have found that fairly often once a customer finds the brand/model number they want, they will just search for that mfg part number. So instead of paying $2 for "widgets", we will (in theory) just pay 16 cents for "Acme 349YY".
| 12:18 pm on Dec 2, 2009 (gmt 0)|
Not every product works well on PPC (i.e. low value products), and a lot of how well PPC works for you is down to your account management - 'bad' account management = poorly performing account.
Writing it off wholesale is very naive - the better way to do it would be to employ a good pro for a few months to work on the account - if it doesn't work after 3 months then you'll know it probably won't work for you.
| 12:25 pm on Dec 2, 2009 (gmt 0)|
If you are in a competitive (= profitable) niche, yet see little added benefit in your PPC campaign, then I think you should consider outsourcing your account management to a dedicated PPC professional.
Also, have somebody look at your landing pages and conversion points. You might well be missing out on some good money.
| 12:57 pm on Dec 2, 2009 (gmt 0)|
We stopped using Google ppc for our core product about two years ago and opted to funnel the ad expense into copywriting and seo. It's work out really well for us.
Admittedly, we test the ppc waters each six months or so for a couple of months but have found returns continue on their downward sprial. We've paid experts on landing page optimization, but still not enough of a yield/effort ratio.
A few years back, ppc made tons of sense: it was cheap and more importantly users were given the option of clicking on their most appropriate link on a results page. So if a user was in search of spending some cash, we advertisers had a higher likelyhood of getting them, otherwise they'd take a different course of action.
On todays Google results set the average user sees few other options than to click on an ad which means wasted clicks.
| 2:01 pm on Dec 2, 2009 (gmt 0)|
Wlauzon, how can you stop 50% of PPC and see no difference? Aren't you looking at the ROI on just the PPC portion or even on the keywords themselves? If you cut PPC significantly and see no difference, doesn't that mean it wasn't doing much anyway, hence producing a negative ROI?
| 2:42 pm on Dec 2, 2009 (gmt 0)|
If everyone does this, search engines will have little or no incentive to maintain free indexes, thereby killing your SERP traffic.
You're inadvertently benefiting from that cash you shell out for ads.
| 3:07 pm on Dec 2, 2009 (gmt 0)|
Years ago PPC was a great way to generate lots of traffic at low cost. But that all changed when G entered the world of PPC and competition heated up.
We would run log reports on only the traffic coming in from big PPC networks including G and was dissapointed to see most of it click fraud. Log reports showed extremely low user sessions leading us to believe the clicks were fraudlant or otherwise not legitimate human users behind the clicks. Even saw junk traffic coming from the big G.
We dumped PPC over 12 months ago.
Might try PPC again but my concern is that the clickfraud problems still exist within these networks and its simply throwing good money after bad.
We've focused on word of mouth advertising and good ol' link exchange with quality relevant partners targeting the same market as we are.
| 3:48 pm on Dec 2, 2009 (gmt 0)|
PPC is a complex beast. 99% of the companies that participate in Adwords and other PPC programs have no clue what they are doing and end up pissing away a LOT of money with very little results. So they then turn it over to some agency to manage on their behalf and pay the agency 10%, 15%, 20% of their total spend in fees which makes it less profitable. And the agency in an effort to make more money then tries to convince you to spend more since that is the only way they can increase their paycheck. Them making your campaigns more "efficient" actually leads to less spend which means less profits from them. So where's the motivation really.
PPC is something that you have to lose at for a while... refine... refine... refine... by continually optimizing landing pages, doing multi-variant testing, testing ad text, etc. until you find the right combo that makes $$$. Finding the right combination of adtext (not just the words in the ad, but things like capitalization of letters and URL displayed in the ad) and landing page takes time. And once you find the right combination, you can't simply put it on autopilot. You have to monitor it, because what works today may not work tomorrow. PPC algorithms at Google and other places are constantly changing much like SEO ranking algorithms.
And stopping your campaigns for months at the time and restarting later is not such a good idea IMO. It creates long gaps in your click-thru history which means you're likely starting over each time you restart trying to build up quality scores so that your CPAs will go down. You should decide to be in or be out and stick with your decision.
PPC "can" be very profitable depending on the niche and the amount of time/effort you put into optimizing it. But don't expect ever to simply jump in and win at it. The people in those #1, #2, #3 positions likely pay far less per click than you would have to pay in order to obtain those same positions because they have better quality scores.
| 4:02 pm on Dec 2, 2009 (gmt 0)|
Likely many businesses spend with g mostly because they see all their competitors doing it or they've heard web pundits say "it's the thing to do." They figure competitors must know something. Or they rationalize the cost based on some nutcase "Lifetime Benefit" theory that only business professors ever talk about. (or did, prior to 2001)
Plus I like to see high traffic figures. (our traffic definitely drops when we cut G expenditures). In tough times it's soothing to see the counter spinning.
We're profitable enough to play that stupid game. But that doesn't make it good business. Just as that thinking didn't make sense in the tech bubble days a decade ago.
Insert "Dragnet" theme music ala Southpark: "dumb de dumb dumb"
| 4:44 pm on Dec 2, 2009 (gmt 0)|
|PPC "can" be very profitable depending on the niche and the amount of time/effort you put into optimizing it. |
Your niche is so important these days, agreed. We spent a lot of money (by most people's account) and could make it work in the early days. These days you're either in a space that hasn't tapped into ppc, your super niche, or your big. Otherwise, it's too easy to find other, more cost-effective sources online.
| 5:07 pm on Dec 2, 2009 (gmt 0)|
That was my post, thanks for bringing this up jsinger.
After last year holiday season we looked at all the money we spent in PPC during the year ($80,000) and made a decision to invest that money in some simple SEO and expanding our product lines. When we expanded our product lines we had more internal links, more traffic, more keywords and more people to our sites.
Since last January we have not paid a penny in PPC and even in a down economy our traffic is up and sales are up. This is due to expansion of product lines, better SERP rankings but it is also due to repeat customers as well.
To me, PPC is great when you are first starting out and have no rankings or branding, once you achieve good rankings and a brand name I would suggest turning it off and see what happens. It worked for us and we are going to continue to invest money in expanding our sites product lines and SEO.
| 5:15 pm on Dec 2, 2009 (gmt 0)|
For sure never give up the 3 word combination keywords, etc. - the ones that are not popular - I say if you are making any sort of profit you should never leave ppc - just scale back
| 6:00 pm on Dec 2, 2009 (gmt 0)|
Most of you who have turned off PPC sound to me like you aren't even tracking your clicks. You should know exactly what the ROI is on every single keyword, otherwise you are doing it all wrong. If it's profitable you obviously keep it running, if not, make changes until it is or turn off bad keywords. If you are saying you "didn't see a difference" then you must have not been getting any clicks. I mean how could you not see the effect of turning off PPC? It should be a large source of traffic for you, even if you have great organic rankings.
| 6:11 pm on Dec 2, 2009 (gmt 0)|
|I mean how could you not see the effect of turning off PPC? It should be a large source of traffic for you, even if you have great organic rankings. |
I for one do indeed see the effect of turning off campaigns and it play with you as the traffic is clearly dented. But the point is that the traffic isn't profitable enough and infact there are better investments--for me, at least--using that ppc money in other ways.
| 6:54 pm on Dec 2, 2009 (gmt 0)|
I totally disagree ... you all need to keep spending money on Adwords. The ROI is much, much, much better than trying to spend the money on boosting natural rankings. It's easier to target, tailor and test with Adwords too. Lots of great reasons! Also, I heard that they've reopened Guantanamo and they're sending non-Adwords buyers there as they are obviously people with terrorist ties. Plus, if you don't buy lots of Adwords, you are anti-capitalism which makes you communist ... and I read some threads where pulling your ads meant a drop in organic rankings because you'd annoyed Google. Ever wondered why the most commercial terms have the same natural rankings as PPC?
| 7:53 pm on Dec 2, 2009 (gmt 0)|
The difference between PPC and organic derived traffic isnít as big as most think. Itís just that the result of your efforts with the PPC is so black and white that if itís not clearly profitable the stop button is a click away. There really is no off button for organic traffic no matter how much labor or expense went into creating it.
Maybe for some industries it just wonít work, I donít know. For us, PPC was a very long and painful grind to profitability, but today itís a core and essential part of our income stream. If youíre strong on SEO you know when you see badly optimized sites. Itís the same with PPC; there are an awful lot of badly implemented PPC campaigns out there. The biggest leap we made, was understanding that what you offer visitors to a PPC landing page is radically different than what works with an organic site your trying to monetize for the same products.
| 8:57 pm on Dec 2, 2009 (gmt 0)|
Look at your click through rates, but you have to equate that to dollars.
Here is a simple formula you can use:
Cost per click X Average clicks needed to convert a sale = Total cost of converting a single sale
Profit from a sale - Total cost of converting a sale = True Profit
So let's say you have a 1% conversion rate (which is average) for every $1 you spend in a click means you need to have $100 of profit in the item you are selling just to break even.
Not many people who bid at least $1 have a $100 profit in the items they are selling. We applied this formula across the board and we found we were tripping over dollars to make pennies in profit.
We do look at time to time at bid prices, but bidding prices from PPC never seem to go down and always seem to trend upwards. I doubt we will ever go back and we will continue to invest money into expansion of product lines and increasing organic traffic.
| 9:27 pm on Dec 2, 2009 (gmt 0)|
But you forget - how important are those "brand" impressions? For some, these are critical and not directly measurable. For others, a huge waste of $$.
I am reminded of the tale of the golf enthusiast who initially clicked in via PPC, then told the spouse who clicked in via a typein url, who actually spent the bucks.
Of course the sons and daughters also bought from the same site when Fathers Day or Mothers Day or N-mas or whatever gift giving occasion came up.
But, that initial PPC click never counted as a conversion.
CRM and lifetime value of the customer, diversity and quality of product, and other service values (like the brand) have to come into play, and if well done, PPC can be a bargain.
With PPC, we have the auction effect which, with smart tactics can be overcome in some, but not all cases.
For example, ever try competing against someone else who had a strong repeat customer base when you only had 1 product?
You can win the battle, but you end up loosing the war.
| 9:47 pm on Dec 2, 2009 (gmt 0)|
You can take that formula and change it a bit to fit that situation. Just take your total sales for a product (PPC and Non PPC) and fit it in the formula.
| 11:08 pm on Dec 2, 2009 (gmt 0)|
Ah, all those fuzzy "lifetime benefits" and "brand impressions" ...
|In 2000, Network Solutions was acquired by VeriSign, Inc. for $21 billion |
".. a private equity firm entered into a definitive agreement to acquire Network Solutions. Although terms of the deal were not released, the Wall Street Journal reported ... in 2007 that the price tag was "around $800 million."
And do you remember Snapple?
I want to see some immediate benefit, some immediate ROI. We run a newspaper ad or direct mail coupon and the next day our stores are packed (or used to be that way)
| 11:11 pm on Dec 2, 2009 (gmt 0)|
One of the reasons I continue with PPC is to suppress the competition. I don't want the little guys getting a foot in the door via PPC and quitting their day jobs to become bigger competitors. So, I try to stay above the little guys in the ppc bids. That said, I have tried quitting ppc for a while, and my sales were BARELY down.
| 12:26 am on Dec 3, 2009 (gmt 0)|
|Otherwise, it's too easy to find other, more cost-effective sources online. |
Which are those besides organic SERPs?
|Cost per click X Average clicks needed to convert a sale = Total cost of converting a single sale |
Profit from a sale - Total cost of converting a sale = True Profit
Can't we all just use a formula like this to make sure our bids are in line with profits? If we track a click through to an order, that order's profit should be used to help determine the appropriate bid for that keyword. The tricky part for me is determining what percentage of an order's profit should ideally be paid to Google. 50%? Orders generated by clicks which aren't trackable (such as in the example above) should be factored into this percentage.
| 2:09 am on Dec 3, 2009 (gmt 0)|
|The tricky part for me is determining what percentage of an order's profit should ideally be paid to Google. 50%? |
Ideally? I like 0% better. :) All kidding aside, I think the effectiveness of adwords is very dependent on your niche, the amount of competition and your profit margin.
I'm comfortable shipping a certain percentage of my profit off to Google - as long as it is profit that I wouldn't have had otherwise. I realize there is the fuzzy non-tracked click to sale, but IMHO the vast majority of folks who click thru - if they are going to do so - will consummate the sale on the same computer within the next month. I may be off a little but I think that if they return to your site within the next month with the Google tracking cookie still in their browser then it will be logged as a PPC sale.
I'll give up, say, 1% of my profit for some fuzzy 'branding' idea (no immediate or measurable ROI), but not 10% and certainly not 50%. I can find better uses for that money.
If I was making money from just "traffic" fine. But I make money from sales, not traffic. You can send me a huge amount of crappy or irrelevant traffic - if it doesn't convert then it is worthless to me. One key is to routinely review the traffic you are getting from each SE's PPC program and see who is sending you the most high-quality traffic.
I like AdWords, especially if you have enough thoroughput to bid on CPA instead of PPC - it can be a good deal.
| 3:26 am on Dec 3, 2009 (gmt 0)|
Definitely. If we spend 0% of our profits on Adwords, we won't make any money. If we spend 100% of our profits on Adwords, we won't make any money. At what point between 0% and 100% is total profit maximized?
| 5:01 am on Dec 3, 2009 (gmt 0)|
|If we spend 0% of our profits on Adwords, we won't make any money. If we spend 100% of our profits on Adwords, we won't make any money. At what point between 0% and 100% is total profit maximized? |
I see...your traffic is almost entirely dependent on Adwords. That's...fine...and I suppose in some cases can't be helped. But I would argue that if you're sending half your profit to Google every month, you might be better served developing/optimizing your site for organic placement and diversifying your traffic stream.
Otherwise, some big competitor might decide to drive up Adwords bids over the holiday season or some such...sacrificing some of their ROI, but perhaps driving a handful of smaller sites that are totally dependent on Adwords out of business as a result.
One of the reasons I continue with PPC is to suppress the competition. I don't want the little guys getting a foot in the door via PPC and quitting their day jobs to become bigger competitors. So, I try to stay above the little guys in the ppc bids.
I realize that in some cases early on or whatever, you may have no choice. But straight-up Adwords forever is not a super-robust business plan. JMHO.
| 5:40 am on Dec 3, 2009 (gmt 0)|
|I see...your traffic is almost entirely dependent on Adwords. |
Not at all. Maybe 20-30%, but that's not the point. The point is, once you calculate how much money you're making per click, you need to use that to determine your maximum bid. Do you want your bid at 50% of the value of a click? You don't want it at 0% or 100% because you won't make any money. The questions is, at what point between 0% and 100% is your total profit maximized.
| 1:31 pm on Dec 3, 2009 (gmt 0)|
Any half decent PPC campaign should make you money if:
a) You are associating a defined level of ROI with keywords
b) You are associating a defined level of ROI with keywords that led to a conversion after up to 4 or 5 other visits after the PPC keyword was clicked on (even if the sale came from organic or a type-in and you split the revenue between the various visits).
c) You are removing keywords that don't achieve your target in either (a) or (b).
It may be that you get no direct sales from your PPC, but do you know if that initial PPC click led to your site being bookmarked or otherwise recognised - which then led to a sale?
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