How can PPC be used to increase the effectiveness of your online advertising, and bring in sales and leads and a return on investment?

Pay-Per-Click advertising channels can be powerful, fast and responsive marketing tools. It has led to the growth and importance of ‘relevance advertising’.

Exploring the background

In the late 1990s, the internet portals, Yahoo, AOL, etc., added e-mail, shopping and applications that kept users within their sites. Topic relevant banner advertising on these pages sold for millions of dollars to dot-com businesses.

Search services were neglected as they took traffic away from these portals and web-page spam clogged search results. Bill Gross spotted the problem and reasoned “Force the friction of pricing into the equation and the markets would start to behave rationally.” Battelle (2005).

Gross arbitraged advertising and realised that relevant clicks were worth more than volume. His site GoTo sold performance guaranteed pay-per-click advertising, first at a fixed price per keyword, before auctioning to the highest bidders online. GoTo became Overture then Yahoo Search Marketing and still provides tools to view bids.

Google took relevance further treating clicks as votes for adverts. Click-through-rates were measured and multiplied by bids bringing better ads to the top. They tested various blocks differentiated as ‘sponsored links’. They found ten, four line, text advertisements were best, allowing ads to be constantly market tested.

Feng (2003) proved Google’s approach generated better revenue. Many 5¢ clicks beat the few $5 clicks. Google taught buyers to click the right-hand column.

Google’s Adwords allowed multiple text adverts to be added and verified immediately. Adverts are shown alternately allowing advertisers to split-test copy. Adwords gradually shows better performing copy more frequently unless advertisers choose pure rotation for more scientific testing. This is as old as direct marketing and the tracking codes on magazine coupons but much faster using pay-per-click. All three main PPC advertising providers, Google, Yahoo and Microsoft Live, now operate similar relevance algorithms.

Pay-per-click campaigns are a powerful methodology producing results within days.

1. First produce an advertisement that is consistently shown for key phrases. This can be expensive in competitive markets and requires expertise and monitoring to maintain. Only 30 clicks or more, for every option tested, are needed for statistically significant results.  So set your budget then turn it off. Even at £5 per click PPC costs less than focus groups.
   
   
2. The number of views (impressions) measures the searchers using your key phrases. These statistics are only available for keywords in your campaign. Real data and keyword suggestions can be found for free with Overture’s Keyword Suggestion Tool (UK data site).
   
   This returns the real search data, from Yahoo!’s network, for the previous calendar month for all the permutations that include your words. Indicative seasonal data is available from Google Adword’s Keywords Tools – Global search volume trends. Small monthly bar graphs show the previous years searches. For real time data you need to run campaigns.

3. The click-through-rate, clicks to impressions ratio, measures the advertisement’s relevance to the searcher’s goal.

4. Different advertising copy can swiftly and easily be compared when alternated evenly. Unless you have strong statistical skills test one thing at a time. Single commas can make a difference but the most powerful lines are the Title, in bigger font, and Display URL as this builds confidence about the advertiser. 

5. Finally the effectiveness of the landing page can be measured by the ratio of conversions, sales or other desired outcomes, to clicks for the complete direct marketing test kit.

Three campaigns were run with both .com and .co.uk showing in the UK. One campaign tested the opposite change from .co.uk to .com in the US.
The *Velitec campaign was a pure scientific test of the power of generic branding, serving advertisements equally, changing only the display URL. “UK Installation” in the copy will have boosted all Click-Through-Rate (CTR) results but Car-tracker.co.uk is 38% ahead, Table 1.

In many markets .co.uk can easily double UK market click-through-rates over .com,

Table 2.

The .com and .eu top level domains work better for international campaigns as shown in the reverse test in the US. Corporate pride in top level domains is doubling UK PPC costs for many companies.

Google Adwords campaigns were set up for some companies who had brand issues. Some had changed names like William Jones Clifton and others like Nova Engineering had common brands, Table 3. Another company’s campaign saw only one of their top ten brand combinations spelt correctly.

Costing pennies these campaigns are a simple courtesy to customers looking for your brand.

The pay-per-click industry was developed using testing and provides excellent tools for quickly testing your marketing ideas. I’m supervising a student MSc. project to investigate PPC as a marketing intelligence tool.
The best PPC campaigns have evolved using constant testing of copy and landing pages. All three main channels offer tools to manage and measure your campaigns. You should know your cost-per-conversion and added value.
If these don’t make a business case, improve or switch off.
The last 30,000 visitors to www.wmccm.co.uk used 20,000 different terms, 15,000 unique to one visitor. These were mainly permutations of fewer key words and illustrates the challenge for PPC, to find more key word terms. Top marketing professionals call in specialist help. Before trying yourself, take a course or get a book.
A low cost campaign to practice on could be your own brand.

By Rob McGonigle,
Project Consultant, WMCCM, University of Warwick
Blog: http://blogs.warwick.ac.uk/robmcgonigle/

Battelle, J. (2005), The Search, Boston, Nicholas Brealey.
Feng, J. (2003), ‘Comparison of Allocation Rules for Paid Placement Advertising in Search Engines’, ACM, The 5th international conference on Electronic commerce: International Conference Proceeding Series; Vol. 50 Pages: 294 – 299.
Marshall (2006), The Definitive Guide to Google Adwords [online],
Perry S. Marshall & Associates.