All too often, businesses start advertising using paid search with the intention of growing sales, only to be distracted by flashy things like impressions and clicks. Although their campaigns may be sucking wind from a conversion standpoint, they find it difficult to pull back from the program because they don’t want to see the flashy metrics disappear. In many ways, paid search can be like playing with fire. It might seem like fun, but if it’s not done in a controlled environment, you can do a lot more harm than good.
Here are some paid search fire safety tips you can use to keep your paid search campaigns performing and under control without burning a hole in your pocket.
Tip #1: Determine how much you’re willing to pay for a lead or conversion.
Determine how much a customer is worth to you based on average order value, lifetime value of a customer, or some other metric that factors into operating expenses, etc. Either way, once you have this number, it’s pretty easy to back out to an acceptable cost-per-action/acquisition (CPA).
For instance, if you close 10% of all leads that you drive to your sales team, and every sale is worth $1,000, then you simply take how much a customer is worth to you and multiply it by your conversion rate. For example: 1,000 X .10 = $100, so you can reasonably pay $100 for every lead you drive. Obviously, this is a loose example. Always be conservative with this number because conversion rates can differ drastically between marketing channels.
Paid Search Fire Safety Tip: Manage your paid search campaigns to a set CPA. After you generate 15 conversions through your Google AdWords account, it allows you to set bidding that automatically targets your average CPA. This will ensure you don’t waste money on clicks that go nowhere.
Tip #2: Identify which organic keywords drive traffic and convert on your website.
We’re huge proponents of mastering inbound marketing before sparking up the paid search fire. It’s much easier to ramp up an efficient paid search campaign if you already know which content, keywords, and user behaviors are most likely to be successful. From a keywords standpoint, what’s happening via organic traffic to your website can guide you in structuring your paid search account and selecting which keywords to bid on.
Paid Search Fire Safety Tip: Pull a list of the keywords driving traffic to your website from organic search. Separate your brand keywords from non-brand keywords. Use all brand keywords and misspellings of your brand as the keywords in your brand campaign. Then, take the non-brand keywords, and determine which ones are driving the most traffic and, if possible, leads or sales. Use this keyword list to guide how you structure your paid search campaigns and ad groups (highly relevant groups of keywords, ad copy, and destination landing pages).
Tip #3: Constantly monitor keywords and set match types.
Believe it or not, it is very easy to garner a ton of clicks from keywords that have nothing to do with your products/services. This is probably one of the easiest ways to burn through cash in paid search. You have the ability to set multiple keyword match types in paid search to let the search engine know when to trigger your ad. Not only can you tell the search engine what you want your ad to show for, but you can also set negative keywords to tell the search engine when not to show your ad.
Paid Search Fire Safety Tip: All search engines provide reporting that will allow you to see which keywords search engine users actually typed in the search engine to trigger and click on your ad. This is called a Search Terms Report in Google AdWords. Pull this report on a regular basis (daily if you are just starting your account), and ad keywords that have no business in your account as negatives. Also, you can increase efficiency by adding keywords that are performing well as exact match keywords to increase efficiency.
Tip #4: Don’t Go It Alone
If you put enough thought and due diligence into the creation of your paid search program, it is not that difficult to get a moderate blaze rolling. However, that blaze can quickly turn into an inferno that is just incinerating your cash if you do not keep a close eye on your account and dedicate adequate time to it.
Paid Search Fire Safety Tip: If you do not have the time to optimize your campaigns and maximize your ROI, outsource it. There are plenty of agencies and services available that can help you get up and running fast. Also, paid search services like Trada will only charge you based on program performance, so you can’t make any horrible mistakes.