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AdWords Middle Men or PPC Bid Management Companies
Companies acting as middle men
bluelook




msg:1126653
 9:35 pm on Feb 3, 2004 (gmt 0)

Iīve seen some companies acting as middle men between advertisers and adwords, because traditional advertisers donīt want to deal with the PPC model and to be all the time with their eyes on their accounts.
Is this legal? How do you think this can work? Asking for a percentage?
The ones Iīve seen ask for $x and say that they will receive y clicks from Google. This seems a bit strange for me...

 

Shak




msg:1126654
 9:40 pm on Feb 3, 2004 (gmt 0)

I will let a some PPC bid managers put their views across.

as alawys, there is good n bad.

keep away from direct plugs biys and girls.

Shak

bluelook




msg:1126655
 9:24 am on Feb 4, 2004 (gmt 0)

Thanks Shak!

Yes, I donīt want companies urls. Just the model of this business. If this is legal, and doesnīt bring too much problems, I may start this in my country (Portugal), so I wouldnīt be a competitor from any of you. But I think itīs better to stay away from this. Iīm just curious :)

Robsp




msg:1126656
 9:30 am on Feb 4, 2004 (gmt 0)

bluelook

I'm active in the PPC business and setup campaigns for other companies. Although theoretically every company could do this themselve they usually lack the time, manpower and expertize to do this. Traditional marketing departments are not used to online marketing and tend to shy away from the technical and analytical aspects.

Next to that someone with lots of PPC experience is likely to get much more from any campaign than people that just get started so these companies are buying time-to-market

So yes this is a very usefull value added service <end of pitch :-)>

Ross




msg:1126657
 10:20 am on Feb 4, 2004 (gmt 0)

As a user of such a service in the UK, I can tell you how this particular service is paid for. I pay them a percentage of my total PPC spend each month. For that they research keywords, adjust bids and generally do all of the things that I don't have time to do. The more feedback I give them (in the form of such and such is selling well etc etc) then the better they can manage my bids.

My stats show me that they are lowering my click costs by more than they're charging me, so they're taking a heap of work off my hands without adding to the overheads...lovely :)

Shak




msg:1126658
 10:24 am on Feb 4, 2004 (gmt 0)

My stats show me that they are lowering my click costs by more than they're charging me, so they're taking a heap of work off my hands without adding to the overheads...lovely :)

that sums up the specific industry quite nicely (imo)

Shak

anallawalla




msg:1126659
 1:34 pm on Feb 4, 2004 (gmt 0)

The big PPC management companies ask for a certain minimum amount per month or between 10-15% of the monthly spend. There is a temptation to add keywords willy nilly, so both impressions and clicks rise. So more commission for a while until the customer complains if the conversions have not risen by the same ratio.

The casino industry in my experience tries to get the middlemen to use their own credit cards and pay them on a CPA basis. No thanks.

Any middleman who promises x clicks needs to explain what is meant by that.

My experience has shown that PPC is best done by an employee or fulltime contractor, as opposed to an external entity who might manage clients in diverse industries. They may not have any knowledge of the customer's business in detail, i.e. their tactic could be to think of the product as a widget and apply various words around it. I took over one campaign where the external PPC manager was trying to sell a business service with phrases such as:

(service) for friends and family
Buy (service) for Christmas
(existing phrase) for business
(existing phrase) for friends
(existing phrase) for family
free (existing phrase)
free (existing phrase) for family

and so on and on. Easy way to cut and paste a word around existing terms and generate thousands of keywords, lots of irrelevant clicks.

So there's the risk in using someone with a part-time interest in your business.

bluelook




msg:1126660
 1:59 pm on Feb 4, 2004 (gmt 0)

Thank you very much for your good posts.

So the advertiser is directly billed by Google (and the middleman only manages the account), or Google charges the middleman, and the middleman charges the advertiser? This would be very risky, because the advertiser may not pay you. An alternative would be to request an upfront fee.
It would be better for Google to bill the advertiser, but in that case, will the advertiser trust you an account with their credit card?

How do you handle this? Thatīs what bothers me.

eWhisper




msg:1126661
 2:03 pm on Feb 4, 2004 (gmt 0)

The big PPC management companies ask for a certain minimum amount per month or between 10-15% of the monthly spend. There is a temptation to add keywords willy nilly, so both impressions and clicks rise. So more commission for a while until the customer complains if the conversions have not risen by the same ratio.

Note: I am one of these agencies (Not one that adds KWs willy nilly - just a PPC management company).

This is a good pricing model if you trust the company. This also goes for the pricing structure of $0.0x per visitor (the advantage here being that if you bid on expensive KWs - you can save money). The KW here being Trust - If you talk to them and just don't seem to click - don't use them - they are spending your money.

The next model is a fixed price per month. This is based on the number of KWs YOU have approved and how often the bids are updated.

You should know if the agency offers conversion and ROI tracking if you wish to implement these later (and I'd suggest using one of these from the start).

Know their reporting options. Some companies just give you total hits per PPC engine and total costs. Some will break them down by KW per engine per cost. One quick way to sort out companies is to ask for their most sophisticated report which should include a LOT of info - if they don't provide this info - then either they really aren't that good - or they don't want you to see the data. No matter how much you do or don't analyze the info (We all know about trying not to get buried in paperwork) - it holds the agency accountable for the KWs & prices involved.

The advantage of an agency is they know all the ppcs, how the system works, and can write good copy, get high CTR rate, etc - you're paying for their expertise.

The downside is they might not know your industry well, and as anallawalla pointed out, might just plug in KWs they think are good without doing the reserach. A good agency will not only do the research, but then talk to you a bit about the KWs they found, ask for suggestions, get a list of some of your 'catch phrases', etc to use in your campaigns. A good agency may not learn all about your products, but they will learn how to market them.

[edited by: eWhisper at 2:09 pm (utc) on Feb. 4, 2004]

Robsp




msg:1126662
 2:07 pm on Feb 4, 2004 (gmt 0)

I do not believe in a percentage of click volume as clicks do not say anything. I either work for a flat fee on a subscription basis or as a percentage of resulting sales. That makes sure I have the same interests as my customers. Keep cost down and ROI up.

Another reason why a percentage of clicks does not work is that for some of my customers it is not about volume but about finding those few customers ready to buy large projects, so often my fees are higher than the actual clicks, i make sure we get the right customers...

transactiongeek




msg:1126663
 3:18 pm on Feb 4, 2004 (gmt 0)

Another approach is starting up an affiliate program and letting "bid managers" work for you at no risk. No offense guys :)

justshelley




msg:1126664
 4:05 pm on Feb 4, 2004 (gmt 0)

The best relationship is when you still have access to your accounts. I know of one PPC company that sets up all their clients under one umbrella account and they don't give passwords to their clients - just monthly reports. With PPC, if something isn't working, it needs to be handled quickly - not six weeks after the fact - so even if you turn your account over to someone, continue to log in and look around every few days.

Also communication and realistic expectations make a difference in the overall success of the PPC campaign when it's managed by an outside company. As a PPC manager, I can't make a client happy if he expects to always be #1 on a $100 a month budget. If something isn't working TELL me. YOU know your business better than anyone else and I WANT to know if there is a problem so I can fix it.

wackybrit




msg:1126665
 6:53 am on Feb 6, 2004 (gmt 0)

I offer this service to many of my clients. I always charge upfront, and only spend what I have. As far as I'm concerned, advertising on Google is like advertising in a magazine.. you pay up front. If someone doesn't want to do that, then that's fair enough, they don't get the ads :-) Try asking any print magazine if you can get a few full page ads and pay in a few months' time ;-)

If a client is hesitant, I offer a mini campaign at a tiny rate so they can at least see some enquiries/sales come in, and then ramp it up as they get comfortable.

webdiversity




msg:1126666
 8:49 am on Feb 6, 2004 (gmt 0)

Advertising on Google is advertising.

Once you have established history with a client, if feasible for you to offer it then some form of credit may well encourage them to spend more money, as their cashflow situation can only be improved.

We advertise in a UK trade publication and get 30 days terms and if we are satisfied with the work that has been requested to be undertaken.

Sensible due diligence and some trust on all sides will go a long way.

roitracker




msg:1126667
 10:50 am on Feb 6, 2004 (gmt 0)

I agree with eWhisper.

Avoid companies that charge based on click volume/traffic - go with a flat fee rate or a percentage of sales instead. Performance-based pricing is the only way to make sure you're not fleeced by a cowboy operation.

It's so easy for someone to say "pay me $2500 and I'll send you 10,000 visitors" & then bid on high traffic (but irrelevant) keywords for 5 cents a click, with an actual cost of $500. Traffic, yes. Quality traffic, no.

Like choosing a SEO company, you need to choose PPC managers wisely.

bluelook




msg:1126668
 6:22 pm on Feb 6, 2004 (gmt 0)

Very good posts!
So the majority here, donīt use their credit card. I think that would be a major risk, because the advertiser couldnīt pay you.

Maybe a good option would be for Google to have pre-pay payments, like other PPCīs. You could ask $100 to your client, and $90 ($10 fee) would go to the Adwords account.

Charging a percentage for sales is good, if you have a good relation with the advertiser. And even so, many sales arenīt tracked, because the buyer may return to the shop a week later, when he erased the cookies.

There arenīt 100% good solutions... any ideas?

Udayan




msg:1126669
 12:49 pm on Feb 10, 2004 (gmt 0)

A set of interesting posts.

PPC bid management is a rather specialised task,left best to "trustworthy"(as eW puts it)professionals who actually know what the entire BM process is all about.

The benefits:
there can be a substantial saving in terms of operational costs(try setting up a 24*7 bid management team inhouse and see for yourself,the costs involved and the inefficiencies that creep in) and a direct reduction of more than 30% of the campaign costs.The campaign manager needs to have an established campaign management setup working 24*7 that monitors bids continuously and updates the same to maintain the relevant position to ensure the maximum ROI.A quick word about ROI(a highly misused concept)-very few(if any) can optimize campaigns at keyword level and also pull it up to portfolio levels.This is because this requires time - and an ability to do the PPC version of"portfolio management".ROI should be gauged in light of this.

Another benefit is the "process improvement"(unlike what most think there are a lot of aspects to a really well managed campaign) from basic knowledge management to understanding the marketer's business-doing required research and adopting the best practices that help the marketers.

The caveats:
1.CHECK - TRUST - CHECK - there are a lot of "I can do this too" setups moving about who donot have a clue about bid management.Be doubly...make it multiple times..sure before you select a bid manager.

2.Its often expensive - unless the bid manager is able to provide you competitive pricing for the services.Normally,unless the bid manager has a certain scale of operation he CANNOT reduce the charges below a point(normally 15-20% of your PPC spend).It is not economically viable for him to do so.
Do the returns justify your "outsourcing"the PPC campaign?Do a reality check.

The future:
With PPC campaigns becoming a "necessity" it has become extremely important to "utilise" this mode of marketing.However,it has become even more important to manage your campaigns minutely.Because of continuous management thats needed,outsourcing to PPC managers(qualified)becomes important,(make that), imperative in high competition categories.

Take care and God Bless.

Udayan Bose

[edited by: Udayan at 1:58 pm (utc) on Feb. 10, 2004]

eWhisper




msg:1126670
 1:20 pm on Feb 10, 2004 (gmt 0)

Udayan,

You might want to edit your post. Your qualifications as to why you can write this include promotional info which is against the TOS.

I think a lot of people here can claim a large variety of reasons why they are qualified to write their posts. It's not necessary, it's possible to judge a post and info for quality without knowing about that individual.

Udayan




msg:1126671
 2:00 pm on Feb 10, 2004 (gmt 0)

Accepted and done.

Thanks for the notification.

And finally as for your comment on credentials,I would only quote-unquote Dizzy Dean,the baseball legend:"It ain't braggin' if you can back it up."

Cheers and take care.

anallawalla




msg:1126672
 5:34 am on Feb 11, 2004 (gmt 0)

The advantage of an agency is they know all the ppcs, how the system works, and can write good copy, get high CTR rate, etc - you're paying for their expertise.

I agree. Trust takes time to build. I always need to see the search terms in the logs and sometimes the client has to give me their web host password. Some will give it, some will not, and some will change it temporarily for you. Similarly, if you are doing several SEM tasks other than PPC, you will need the client's credit card details. This is another sign of trust.

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