22 replies to this topic

[yousaidwhat]

I'm beginning to go crazy. I started promoting this herbal product through overture last month and my conversion is about 2%. I did ok for a while, but now I have 3 pharmaceutical firms that are literally taking the bids from $0.15 to over $2.

Do you think these guys even care to make these campaigns profitable? I mean they don't even sell products on their sites?

How do you think I can stay in the game and compete with these guys and market effectively. Seems like if I go any lower neither will my conversion rate or my click through rate matter.

Is this common for pretty much all keywords in general? Are we all headed towards a TV like advertising saturation where only these big guys get to say what they want?

[SearchRank]

That may have some truth in the pay per click arena but it doesn't have to be the same in the organic listings where a little guy can build a great site and still compete against the big guys.

You may try bidding on less competitive keywords or simply make your site the best of its kind so the search engines will favor it above the big boys in the organic SERPs.

[Opie1Canopie]

Do you think these guys even care to make these campaigns profitable?

The short answer is no. Fortune 500s often have media agencies that buy hundreds of untargeted words, then proceed to do whatever it takes to keep them in the top 3 positions. The don't measure conversion and they certainly don't think about any sort of ROI. For them it's stillall about the traffic .

I agree with searchrank - go after natural results. I don't see this situation changing for a while yet - but I have hope that more marketing/advertising people at Fortune 500s will begin to focus on ROI.

[goodman]

It's untrue that the little guy can't grow a biz using TV ads. I've witnessed many local firms (alarm companies, stereo stores, authors of interesting info products, mattress companies, menswear discounters) grow through the strategic and repeated use of TV ads.

I suppose the same thing is true for search. The big boys will move in, but some small businesses will find the cracks and the bargains.

Of course if you're extremely tiny, and trying to sell herbal supplements like every second person online, you're going to have trouble competing, but it's technically possible. It would be foolish, though, to suggest that you can't do better with some capital to go along with your great idea. You can bet that the menswear discounter or the mattress shop or AlarmForce or whoever had to borrow money, rack up their credit cards, etc. at some point. Is there something I missed somewhere about business? It runs on money. If you have none, you either work for the guys that have some, or figure out a way to borrow it, or do a really amazing job of finding a market need and filling it.

So let's go back to that part. Do you actually have a really good idea? Or was it just a temporary keyword loophole that was profitable for you until other companies decided to outbid you? Do you have a unique selling proposition, a unique product, etc.? If so, the world will want what you have. If not, is it really worth doing?

Ever read The Bootstrapper's Bible by Seth Godin? It contains some interesting insights about how you can grow a tiny business. It also challenges you to come up with a better idea in the first place.

Is SEO / SEM supposed to be some kind of free lunch? I thought we were past those days.

[Scottie]

The affiliate industry has a lot of issues- one of the biggest being cannibalization!

IMO, the only way to succeed at being an affiliate is to either buy your way to the top (if the product margins can support that) or find a way to do it differently and better than the rest.

Sell via the trust and credibility you gain from the detailed reviews, uses and testimonials of your product. Offer a community forum or industry news. Creat something the related sites will want to link to!

Advertise... OFFLINE! It's been working for years- buy some of those local cable TV spots that go for $15-$30 per ad and promote your site.

What's your business plan? What's your marketing plan? Who's your audience? How will you reach them?

Not saying this is your case, but lots of people think they can put up a website-in-a-box and start making money with no investment and no plan... it's still a business! If PPC was your only marketing strategy. it's time to head back to the drawing board and get creative.

[Haystack]

If you know how much money you made at .15 per click with a 2% conversion, you should be able to figure out your bidding break point for a positive ROI. What can you do with that information?

1. Cross sell or offer incentives to increase the average order size.

2. Improve the site to double the conversion rate. Now you can pay twice as much per click.

3. Consider the lifetime value of a customer. Maybe you can afford to lose money on the first transaction if you know the customer will come back for more. This seems plausible if the herbal products.

4. Find other PPC sites where you can find traffic at or below your breakpoint cost per click. Measure to make sure conversions justify the traffic.

5. Research alternative ways to describe the product, then advertise on those terms.

Opie1Canopie, while large companies seem somewhat anonymous, in my experience, they have marketing managers responsible for ad budgets, so conversions and ROI are generally tracked. They may not watch individual keywords on a daily basis like a small business who is more dependent on an individual phrase but they are certainly accountable for the money they spend.

BTW, I 2nd Andrew's The Bootstrapper's Bible recommendation.

[yousaidwhat]

So in other words you guys are telling me the best I can do is track my results and refine my PPC strategy but when u're up against a 7 figure ad budget get creative - which really means don't bother with direct competition for those competitive keywords... very discouraging news.

I guess it's on to hard work on the organic optimization end...

[Haystack]

Companies with 7-figure ad budgets didn't get to be the size they are by giving up the first time they come to a hurdle. If you feel that you have the best product for the term, just outbid the pharmaceutical companies and do everything you can to convert the heck out of the traffic.

However, if your business model consisted of, "It looks like I can convert some $0.15 clicks on one Overture search term ad into sales," then the game may be over, or at least a lot smaller.

I can definitely related to this situation. Earlier today I was working with a client who sells time clocks for businesses. Within that industry, there is some overlap in PPC competition between companies selling time clocks that cost between a few hundred to a thousand dollars against software companies who sell extremely expensive custom time and attendance programs. Guess who can afford $5 clicks and who can't? The time clock company would almost certainly have a higher conversion rate, but the software companies can spend much more to acquire a customer.

The key to PPC is to work hard to bid on as many variations of your terms as you can. In general, this will lower your average cost per click because you'll uncover terms your competition hasn't, and it will help offset situations like this because you're much less dependent on any one phrase for traffic.

[delridge]

So in other words you guys are telling me the best I can do is track my results and refine my PPC strategy but when u're up against a 7 figure ad budget get creative - which really means don't bother with direct competition for those competitive keywords... very discouraging news.

I guess it's on to hard work on the organic optimization end...

There's more to life (and business) than PPC and SEO. Not so hidden in Scottie's post was an important point...

"Advertise... OFFLINE! It's been working for years- buy some of those local cable TV spots that go for $15-$30 per ad and promote your site."

...online, offline, cable spots, newsletters, goodyear blimps, whatever. The key is if you find your world has turned into PPC and SEO, don't forget to go play on some other fields, too.

Matt

PS: Don't despair! All big boys were once small. On their way up, they killed the previous big boys. What goes around comes around.

[delridge]

BTW, Goodman and Haystack, thanks for mentioning Godin's book. Got myself a copy and am looking forward to some lunchtime reading!

Matt

[Opie1Canopie]

Haystack -

I agree that many large organizations do have competent managers that track conversion - but when it comes to SEM - in my experince some, not all, are still in the dark and tend to think of it as broadcast media instead of direct. So in this way, they are content to just measure a lift in site traffic and not worry beyond that - this is much easier when a 7 figure PPC budget is a fraction of the overall communications budget.

So to the defense of some traditional media agencies that put together large untargeted PPC campaigns, right or wrong, they are just delivering what their clients are asking of them.

[lcobb]

This case study was in my latest marketingsherpa newsletter and I thought it was appropriate for the thread. The scale is a little different, but the problem is similar and they seemed to be competing despite being outgunned.

http://www.marketing...?contentID=2793

Larry

[MoreConversions]

YSF,

You can compete with the big guys on PPC, you just have to play a little smarter and work a little harder. I teach classes every month to Overture advertisers and I hear this complaint all the time. Then I ask "How many keywords are you bidding on?" and the average answer is below 20.

There are 450 MILLION keywords on Overture (and I'm sure as many on Google) that have no bids. The big guys aren't going to sit there and figure out all the niche terms that drive traffic to their sites. They don't need to. They can simply buy the most obvious keywords, for the highest prices and shut you out. You can own space on hundreds of niche keywords for your product and still make money as long as you have a decent profit margin. Niche terms are generally 3 or 4 or more word terms and those are the ones that convert better anyway.

Here are the keys to increasing your conversion rates and lowering your CPC on Overture:

1) Bid on HUNDREDS of niche terms. Yes, they will only bring you a couple of clicks per month, but those clicks will convert and you won't have the same amount of competition on them. Get yourself a copy of WordTracker if you haven't already and go after as many terms as you can. The most successful advertisers on Overture have between 500 and 5000.

2) Write custom titles & desc. for every ad. Taking the easy way out and applying one creative to every term simply doesn't work.

3) Track every keyword to conversion so you can see which ones to optimize.

4) Take customers to the relevant page on your site, or better yet create a custom landing page for each keyword. (I said this was going to be work didn't I )

Then take all the lessons you have learned and buy those keywords on Google and the smaller engines also, but make sure you create different style titles and descriptions for Google. Once you have figured out which keywords convert, then optimize your site for those and go after organic rankings.

Pay per click isn't the easy get rich quick venture that made thousands of affiliates money any more, but it is still possible to generate really good money with a website using PPC. I have met HUNDREDS of folks who are doing it, and you can too if you play a little smarter and harder.

Cheers, Mary

[BrianR]

Welcome to the forum, Mary - hope you enjoy being us. And thanks for your contribution.

BrianR

[BobetteKyle]

Mary, welcome to the forum. Great post!

Do you think these guys even care to make these campaigns profitable? I mean they don't even sell products on their sites?

The short answer is no. Fortune 500s often have media agencies that buy hundreds of untargeted words, then proceed to do whatever it takes to keep them in the top 3 positions. The don't measure conversion and they certainly don't think about any sort of ROI. For them it's still all about the traffic .

I agree with searchrank - go after natural results. I don't see this situation changing for a while yet - but I have hope that more marketing/advertising people at Fortune 500s will begin to focus on ROI.

The longer answer is yes, they do care to make a profit. In my view, Fortune 500s are not being blind to profitability, they are taking a broader, big picture approach. Deeper pockets open the door to a wider variety of marketing objectives and corresponding tactics.

ROI encompasses more than direct, short term conversions. There are branding effects to consider, as well as impact on offline sales and other long term, indirect measures.

In general, there are still opportunities for the little guys. We just have to work around the big guns by taking different, more interesting routes to success (IMO Mary has the right idea ).