Microscopic vs. Macroscopic PPC Analysis
Aug 13, 2007 Analytics Tools
One key analytics test I wanted to address early in my blogeer (blog + career?) is the concept of time scale. How long do you have to wait in order to notice trends in your pay-per-click campaigns? How should you determine whether day-parting is a useful tactic for your campaigns? Can you ever really measure the true ROI of search marketing?
The answer to all of these questions and more…
Advice is hard to come by in the pay-per-click market because everyone is out there to make money on Adwords management services, consultations, and packaged solutions including search engine optimization. Even if your company farms out your PPC campaigns to a reputable SEM company, understand that trends are driven mainly by the same factors that influence your traditional sales cycles.
When you’re starting out with a pay-per-click program in either Google Adwords, or Yahoo Search Marketing (let’s stay away from adCenter to start), it’s important to know that without testing your keywords and bids, you can’t determine what will be successful and when. For high traffic general terms (such as industry vernacular), it generally takes around a few weeks to start forecasting microscopic trends. If your rank averages lower than 6, it may take longer because you don’t have sufficient exposure to true impression figures for your keywords.
On the other hand, some short-term traffic patterns are highly predictable - especially for certain e-commerce conditions. As every good marketer knows, when an industry giant like Microsoft (think Vista) or Apple (think iPhone) makes a move and releases something new, the world takes notice. While the rest of the world and their cousins are targeting general keywords such as Vista and iPhone and other new and exciting products, you have the business sense to think of some quality long-tail keywords, or take advantage of geo-targeting.
Long-term traffic patterns have to be examined on a much more macroscopic level. Almost every business I have ever worked with rides the wave of back to school shopping, whether it is directly related to your kids’ most hated time of year or not. If you’re running an e-commerce site selling school and office supplies, you know the drill. If you’re a Realtor, you know that fall and spring are your busiest seasons. Take advantage of what you know already and apply that knowledge to predicting common sense forecasts on your account and campaigns (notice I didn’t say ad groups).
Now I can safely let you in on a little secret…
The Content Network in Google Adwords and Content Matches in Yahoo Search Marketing can be your best friend in determining traffic patterns — for cheap! Due to the immense size of (especially) the Content Network in Adwords, clicks are relatively cheap in well-crafted content-only ad groups, and they’ll give you a lot of impressions in a short period of time. Use this data wisely in connection with your analytics software to determine geographic traffic patterns, hourly hits and conversions, and competitive positioning. Comparing these metrics should provide an answer to day-parting with as little as one week’s worth of data.
The final outstanding question remaining is whether or not it’s possible to measure the true ROI or return on ad spend of your search engine marketing campaigns. This is highly dependent on several factors:
- Call to action: Obviously if you want people to buy a certain product and your landing page is clear, concise and relevant to your ad text, the likelihood of people buying a hot widget or gizmo is relatively high.
- Bricks and mortar, or Bricks and clicks? Do you have more than one way to convert prospects on your landing page? If you have a 1-800 predominantly displayed right next to a product you want to sell, chances are people will call to purchase. If you don’t keep track of offline conversion, you’re only getting a partial ROI metric.
- Micro or Macroscopic Analysis: How long is your sales cycle? One company I worked with has stated that their sales cycle from lead to purchase is an average of six months long. If that’s the case, do yourself a favor and quit! Just kidding… you can make it easier on yourself and work out an average cost per lead for your organization through traditional marketing channels and apply that figure to your search campaigns. It’s not perfect, but search marketing rarely is.
There are some definite pay-per-click management issues marketers face when reading and reacting to trends. Most fall into a category of relying too heavily on knee-jerk reactions by analyzing microscopic trends or those that wait too long to react. The key is to trusting your business acumen and applying traditional marketing strategies to sponsored search programs. Use your analytics solutions to take note of the small changes that happen on a daily and weekly basis, but don’t lose sight of the big picture.
As always, read, test, react, and test again. Until next time…
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