4) Bargain Hunting: Increase Budget / Prune Re-evauate

Pay Per Click Manager

PPC Condition 4: Bargain Hunting

As Pay Per Click 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’s the safest and brightest spot on our “How to Manage PPC” Diagram.

The easy solution for an account in Bargain Hunting mode is to simply increase the budget, and if an Advertiser is clearly earning an attractive Return on Ad Spending (ROAS), then recommend an increase!

Often, the situation is not so straight-forward, and in those cases, if the account is structured efficiently, the only thing required to improve performance is cost cutting / pruning.  That’s what bargain hunting often involves, simply eliminating the worst performing elements (and sometimes displacing them with lower volume / lower cost, higher return elements).

Reduce CPC!

Intelligent bid maintenance is so important, particularly for accounts in Bargain Hunting Mode.  In Bargain Hunting Mode, a Pay Per Click Manager knows there are more searches for relevant terms than he has chosen to purchase.  It’s for this reason that increasing bids for accounts in bargain hunting mode, even at the keyword level, almost always results in a deterioration of the ROAS.  For an account in bargain hunting mode, an increase in a bid at the keyword level is justified only when the keyword is clearly generating an exceptionally high number of conversions.  If a keyword is not a clear star, then reduce the keyword’s bid or pause the keyword.   If you can systematically reduce bids for all but the best performing keywords, then you will purchase more clicks for the same ad dollars and this will improve ROAS.

Create Star Campaigns

For accounts in Bargain Hunting Mode, create star campaigns.  Place the star keywords in such campaigns, along with the best performing ads.  Target better ad positions for star campaigns, and set the budgets high enough to capture 100% of impressions.

Lose Impression Share due to Rank, not Budget

If your account is in bargain hunting mode, then you’re losing impression share for all but the star campaigns.  If you faithfully pursue a bid maintenance strategy in accordance with the previously described method, then you will effectively migrate lost impressions from those lost due to budget to impressions lost due to rank.  Track this daily, and keep reducing bids until you’re losing the lion share of your impressions due to rank.  By selectively reducing CPC, you’ll get more clicks out of your ad dollars and likely increase your number of conversions.  Keep your eyes peeled for any new stars and shuffle those into the star campaigns as you identify them.

From time to time, reevaluate–compare your actual results with your targets.  If you’re beating the targets, then consider recommending a budget increase.  Reevaluate the economic condition.

Buy Long-Tail Keywords

As shown in the following diagram, maximizing number of clicks which we can purchase, based on a fixed ad spending budget involves moving from the high volume / high cost keywords on the left to lower volume, bargain keywords on the right.

Long Tail Keywords

Buying long-tail keywords

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, and pause the expensive keywords, then he will significantly reduce his costs, and to the extent the more specific keywords generate a higher click through rate, then he will also improve his Quality Score.

Bargain Hunting:  Tactics for Improving Performance

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

  • Recommend ad spending budget increase (if high ROAS)
  • Tighten match types
  • Kill content network
  • Add negative keywords
  • Decrease bids (don’t increase bids!!)
  • Place best performing keywords into separate campaign, with plenty of budget (create a star campaign)
  • 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.

Content Campaigns

For some accounts, content advertising represents marginal spending; if it’s underperforming, and you decide to just turn off entire campaigns, the impact can be to bounce the campaign from Bargain Hunting condition to a Starved for Traffic condition.

The proper solution for content is to evaluate the ROAS for content advertising at the ad group level, and then:  1) if content is providing value, recommend that the budget for the account be increased to accommodate the content ad spending; 2) if only certain ad groups are providing value, then pause the duds, at the ad group level; if the entire content campaign is performing poorly, then throttle spending significantly and try to fix it for a month or two!  Content campaigns often react favorably to continuous improvement.

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