PPC Condition 4:  Bargain Hunting

As PPC Managers, when we evaluate a new client and our analysis lands the client on this node of the PPC Ad Management Process Diagram, it represents Nirvana!  It is akin to being the first to walk through a vast orchard of Peach trees at harvest time, when they have just become flush with low hanging fruit, and selecting just the most perfect bushel of peaches among the entire crop.  It’s the safest and brightest spot on the Diagram.   From here, if the account is structured efficiently, the only thing required to improve performance is pruning.  That’s what bargain hunting often involves, simply eliminating the worst performing elements (and sometimes displacing them with lower volume, higher return elements).

In the bargain hunting mode, we know there are more searches for our terms than we choose to purchase.  As shown in the following diagram, maximizing number of clicks which we can purchase sometimes involves moving from the high volume / high cost keywords on the left to lower volume, bargain keywords on the right.

The above diagram illustrates the search ad space for Auto Painting and Body Shop Repair in Des Moines, Iowa.  There are a little over 600 searches per day in Des Moines for relevant keywords.  Purchasing the entire market of 600 searches would cost an average of $1,256 per day.  Doug’s Body Shop can afford a budget of just $400 per day.  On the left are the high traffic expensive root keywords like “body shop” which cost $5.00 per click.  On the right are the long-tail keywords, like “nissan auto body repair east des moines” which costs $0.10 per click. The average cost for the entire market is $2.00 per click.

Given his advertising budget, Doug can purchase 83 clicks for root keywords on the left or 320 clicks on the right.  Assuming they are all equally relevant, our experience shows that the long-tail keywords on the right usually convert at a higher rate than the root keywords on the left.  Clearly the long-tail approach will allow Doug to get the most out of his advertising dollars.  If Doug is willing to enhance the granularity of the account by breaking the long-tail keywords into finely grained ad groups, then he can also significantly improve his Quality Score and further reduce his costs.

Some of the tactics which might be considered in the bargain hunting mode are:

• Tighten match types
• Kill content network
• Add negative keywords
• Decrease bids
• Place best performing keywords into separate campaign, with plenty of budget
• Place high traffic suspects in separate campaign, and starve them with budget
• Eliminate all (short too general) high traffic, low return keywords
• Modify the account to target only long tail keywords
• Identify best performing days or times of day to run ads
• Tighten geographic scopes
• Convince the client to increase the daily budget

The severity of the pruning or revision should be determined by how low the impression share is.  Don’t underestimate the effect small changes can have on the account.  An impression share of over 70% involves snipping, not hacking.

Often times, content advertising represents marginal spending, and the effect of turning it off can be to bounce the campaign from Bargain Hunting condition to a Starved for Traffic condition.  A common mistake by novice account managers is to bounce an account back and forth between both conditions in perpetuity.  Of course, the proper solution would be to evaluate the ROAS for content advertising on a stand-alone basis and then recommend either that the budget for the account be increased to accommodate the content ad spending, or that content ad spending be eliminated and in some situations even that the total ad budget be decreased accordingly.