In early 2009 I was sitting at a lunch table at the SMX West conference, when I met this really smart guy named George Michie. I'd heard about the PPC expertise of The Rimm-Kaufman Group, of course, but didn't know any of the principal players. George and I hit it off pretty much instantly. We shared many of the same perspectives on search, on agencies, on the respective challenges of SEO and PPC, and on industry pricing models. Since then, we've stayed in touch regularly online.
George was kind enough to conduct an interview with me recently on the RKG Blog, and I wanted to return the favor. Please find our dialogue below.
6 PPC Questions for George
At what point or spend level should a business start looking to a paid search bidding/management tool to help their paid search campaigns? Or, does spend even factor into this?
Spend does factor in simply because you have to pay someone for the service or the tool or both. If the program is tiny, spending less than $5K per month, it’s hard to justify the expense of hiring someone to do it. Full service agency fees start making sense when the spend gets into the $15K - $20K per month range. Now there are cases where companies need to tick off the “check box” that says they must have a top flight paid search program even if it is small, and it may make more sense to have someone else do it, but from an ROI standpoint if the cost of management is as much as the media spend the economics seem out-of-whack to me.
How does the evolving SERP at Google, which contains far fewer classic results than it used to, effect PPC strategies?
Product expansions and image-based ads have not yet changed the game, but are high on everyone’s radar and rightly so. If images or rich-media proves to provide Google with a larger revenue stream than the current text links impression for impression then that will be the wave of the future. If I was a betting man I’d bet that five years from now the ads are still text for the vast majority of searches. The reason is simply this: most users search for categories of things, not for specific products. Because of that, single product images and landing pages are unlikely to be what the user wants. That hurts click-through rates on the ads and conversion rates once the user gets to the site meaning the advertisers are willing to spend less for the traffic and Google makes less money. Firing targeted category/sub-category image-based ads might be the Holy Grail, but generating the right creative to go with every conceivable search may be economically infeasible for the advertisers. I could see image links gaining a foothold in product specific searches, but that’s the minority of paid search.
We’ve seen paid search grow tremendously over the last 5 years – as more and more businesses realize the benefits – how should companies deal with the additional competition and complexity?
6 or 7 years ago, paid search was almost like shooting fish in a barrel; the more money you spent the more you made. You could do search badly and get away with it. That really isn’t the case anymore. While few advertisers do search as well as it can be done, in almost every vertical now there are a few people doing it well and many others doing it with some level of competency. Wading in with a couple hundred Keywords, a spreadsheet and credit card is a tough game these days.
As the competition gets stiffer the importance of every detail grows. The KW list, the match-types, the negatives, the KW-landing page-copy combinations and the bidding sophistication on the low traffic stuff can be the difference between an ordinary program and a much bigger more successful one.
Advertisers who manage search in-house need to take an honest assessment of their approach to see if they have the tools to compete effectively, and if not take a good look around at the platforms for rent and for full service agencies. The tools are huge time savers, but aren’t terribly sophisticated. They’re not only limited in what they can do, but if the analyst in front of the tool isn’t top-drawer, the performance might be no better than the old spreadsheet model. The problem with agencies is they vary so much in quality.
There are an awful lot of agencies out there who use poor position-based bidding systems and rely on machine-generated Keyword lists to do their work for them. The fact that your agency is well-known and well-paid doesn’t mean their work is beyond question. Advertisers are well advised to take a careful look under the hood to see if the data and the practices applied are really up to 2010 standards.
In regards to above, how are smaller businesses going to need to adapt to stay competitive?
Small businesses that can compete in large search markets can have big paid search programs and the resources (internal or external) to manage them with the big dogs.
For the folks in small markets who can’t afford the platforms or agency support the good news is that Google’s self-management tools are free and are improving. Their conversion optimizer can be a fine solution for a small program if you’re willing to have Google tracking on your site.
Have you experimented with the Google Product Ads for your clients, and if so, what have the results been? How do you see that feature taking shape in the coming year?
The product extensions, previously known as Plus Box, seem to raise Click Through Rates, but at this point almost no one actually uses the ajax expansion or clicks on the product links revealed. The CTR improvement may just come from the plus sign next to the ad. People may learn to use those pluses as time goes on, but as I mentioned earlier, ultimately people aren’t ready to pick a product most of the time.
The CPA product ads we haven’t used as of yet, and I’d be interested to hear how their working out for those who do use them and for Google.
How will Bing’s takeover of Yahoo! change PPC strategies for your clients?
Really it doesn’t change anything strategically. It will give us a somewhat richer data set on which to base bids and do analysis, and will somewhat reduce the hassles associated with having ads in 3 different places that need to be updated. In the great scheme of things it doesn’t change the game.