Pay Per Click Optimization

Definition:

Pay per Click Optimization is an integrated effort to increase the return on sponsored search engine ad campaigns.

Optimization Categories:

There are three categories of Pay Per Click Optimization, keyword bidding optimization, landing page optimization and overall campaign optimization.

Keyword bid optimization seeks a better return by identifying optimum keyword bid prices and updates maximum bid prices accordingly.  Optimum keyword bid prices are supposed to achieve higher returns on keyword ad spending through the promotion of high performing keywords and the demotion of lower performing keywords when performance is tracked.  If keyword conversion performance is not tracked, promoting low cost clicks can also improve the return on ad spending.  Since not all site visitors are motivated equally, determining the spending based on the day of week and time of day is another way to improve return advertising returns.  Various automated software bidding tools are available to help optimize keyword bidding.

Performance tracking is key to improving the return on sponsored search advertising.  It can be broken down into two kinds of activities.  One is tracking keyword performance by adding conversion tracking code.  This tracks the number of conversion as well as the monetary value of conversions.  Conversion values can be assigned a static value or a variable value.  Calculating variable conversion values is also called dynamic conversion tracking.  A static conversion value is meaningful when various actions are tracked such as product inquiries, downloads or specific page views.  In these cases, each action can be assigned a value relative to one another.  An example of dynamic conversion tracking is calculating and tracking the sales revenue generated from each conversion and each keyword’s ROI.

Another way to track keyword values is by examining visitor actions via a website analytic tool.  You can track conversions and actions leading to conversions by evaluating visitor activity such as average time on site, page drop rate or average page view.

Keyword Optimization

1. For high search volume keywords, you can improve performance by either narrowing down the keyword scope from a broad match to a phrase match or an exact match or by narrowing the scope by adding a word to the keyword combination.  Another practical way to improve the performance is to develop a separate ad group for some keywords and develop ad copy tailored to it.
2. For high converting keywords, it makes sense to increase spending, but still maintain profitability.  Also, look for similar keywords to the ones already converting well.  Examples are synonyms or longer keyword strings with the same high performing base keyword.  If similar keywords can be found, they are likely to perform well also.
3. For low search volume keywords, check the ranking.  If the ad copy is visible on page one, leave the bid as is.  If not, increase the bid to insure visibility.  Be careful not to overspend.  Typically low search volume keywords have only a few competitors.  Bidding for the top position puts you in an expensive bid war without a greater return. 
4. For low converting keywords, check the landing page and ad copy.  Are they compelling?  Does the ad copy logically match up to the landing page?  Does the landing page look professional and have a logical call to action?   If the landing page, ad group and ad copy all make sense for a low converting keyword, reduce the spending on that keyword.
5. One of most effective ways to improve performance is to identify keywords with no or little relevance and eliminate them from the mix.  One way to foresee these irrelevant keywords is to review page content from the search results.  The other way to identify irrelevant keywords is to review keyword performance by the average time on site through analytics.  Once these keywords are identified, they need to be added as negative keywords.  This means, when a user searches using one of these negative keywords, your ad will not be displayed. 

Campaign Optimization

Campaign optimization involves refining ad text, enriching keyword inventory, reallocating campaign budget, and adjusting media selection and coverage and geographical scoping to maximize the effect of search ad, and improve the return on ad spending.

Spending Optimization

1. If the campaign budget is completely spent most days, do one of the following: a) reduce click costs by increasing bid amounts on lower cost keywords and reducing bids on more expensive keywords or b) increase the campaign budget.
2. One way to optimize campaign’s budget is to compare performance between campaigns and transfer funds from a campaign to another.
3. Another way is to compare ad performance between various ad channels and reallocate the budget.

Ad Group Optimization

1.      Ad Groups need to be sorted in logical categories.   You may choose ad group sorting based on common keyword, or product category.  Since keywords in the same Ad Group share the same ad copy, ad groups without commonalities will have poorer click through rates.

2.      While high clickthrough rate helps achieve a good quality score, it does not guarantee a good ROI.  Since good ad copy is to make clear of who is target audience, it has the effect of screening out a qualified caller from all potential callers which can result in lower clickthrough rate.

Ad Channels Optimization

1.      Google offers three different sources of clicks:  keyword search clicks, content clicks and site targeted clicks.  Since the searcher’s level of motivation is different in each instance, the rates of conversion are different as well.  Therefore, it is important to know quality ratios between the three sources and allocate your budget accordingly.

2.      It is important to track the source of clicks at the final conversion action where a site visitor becomes a paying customer.  While variables in click source might not show significant differences for intermediate actions such as signups or inquiries, there can be significant differences in the rate of final action conversions.

3.       If any source shows an overall poor conversion rate, cut off clicks from that source.

Campaigns Optimization

1.      Budget, scheduling, target location and language are all attributes defined at the campaign level of SEM.   That means campaign may be broken down by any of these attributes if logical splits in keyword lists can be found.  The easiest example is keyword lists by language should be sorted out into different campaigns.  Campaigns can also be broken down for target locations.  Some keywords will be specific to a geographic area.

2.      Logical campaign division lines are products, projects and seasonal campaigns.

Optimization Methodologies

Periodic Review

A typical optimization effort is the monthly performance review with keyword performance and campaign performance reports.  Practical guidelines are:

1. Identify negative trends between current review period and the prior review period.  Negative trends can be: more than planned spending, increase in click costs or conversion costs and a decrease in the number of clicks or number of conversions.
2. Evaluate whether the current performance is satisfactory for the business.  Two questions you should ask is:  a) Is the lead count or sales volume satisfactory? and b) Are the returns profitable?  To answer these questions, conversions and website activity must be tracked.
3. Identify areas for improvement.  Can ad copy be improved? Can more keywords be identified?   Can wasted clicks be eliminated?   Website analytic software is very helpful in determining these and other areas for improvement.

Scheduled Testing

Two types of testing should be planned and executed.  One is Ad Copy testing and the other is landing page testing.  The success of the task depends on development of effective test cases, reliable collection of test results and then test conclusion based on statistical sampling or inductive reasoning.

Optimization of Troubled Accounts

Common symptoms are drops in conversion rates or keyword click counts.  When this occurs, go through diagnostic procedures to narrow down and identify the cause.  The following is a basic approach to diagnostics:

1. Narrow down the cause from larger to smaller units.  – When the account exhibits a symptom, the next step is to find campaigns that exhibit the symptom and then to dig down to the Ad Group and keyword levels.
2. Narrow down the period specifically.  – When the problem appears in the monthly report, the next step is to find out if the bulk of the problem occurred on a certain week or day of week or time of day.