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List, Offer, Package in PPC

Jim Novo wrote a great piece on Friday reminding folks that marketing wisdom is considerably older than the internet, and that the folks who never learned those fundamentals probably aren’t very good online marketers either.

Many great lessons from direct mail have corollaries in the world of Paid Search. Consider for a moment the 3 critical elements of success in direct mail: List, Offer, Package. Mailers might disagree about the exact weighting of importance of each, but there is no disagreement about the order. List is far more important than the offer, and the offer is far more important than the package (Imho something like 70-20-10).

LIST: When catalogers talk about list they mean the mailing list. Experience teaches mailers that sending books to the right group of people is far more important than what they offer them. A retailer can have the most compelling offer in the world and present it beautifully and effectively, but if they send it to people who aren’t catalog shoppers they will lose their shirt. Remote shoppers — those who will buy without touching — are not the norm, and developing a list of catalog responsive shoppers is the most important piece of building a catalog company. Using RFM modeling or more advanced statistical methods to identify the best names to mail within that list is the next most important piece.

OFFER: Are the selection of product and pricing appealing to the recipient? The wrong product mix, non-competitive pricing or poor selection will also destroy performance. Catalogers study catalog response to offerings by square-inch devoted in the book to determine how much space to allocate to products. They study price-points and promotions to assess what combination to what segments of their mail file maximize profits.

PACKAGE: How the products are presented, the layout, the design, the photography and the cover all impact performance. The creative team studies the impact of dot-whacks, call-outs and slash-through prices to wring the last dollar out of a productive mail cycle.

Each element is important, but they are not equally important. The focus and attention must be meted out according to relative impact for the company to function at peak performance.

If we look at these elements in the context of paid search we see striking similarities of concept and relative value.

The paid search corollary to “list” is the keyword list and the bidding. Just as catalogers learned that their mailing list is their most valuable asset, generating clicks from the right people is the most important piece of the game in paid search. That comes from serving ads to people who are most likely to buy their products. That intent is revealed most by the words used in their search. Maximizing revenue cost effectively, the RFM corollary, comes from smart bid management. With direct mail the cost of the mail piece doesn’t vary by the quality of the name, in search we must marry the costs to the value.

However, great keyword list management and bidding algorithms will fail if the “offer” — the selection, quality and price of the product(s) — isn’t compelling. This is partly a function of selecting the best landing page from the available options. The depth of the landing page needs to reflect the depth of the user’s search. Showing all the available choices that respond to the user’s search and only offerings that respond to that search is tremendously important. Landing every search on a product page is worse than landing them all on the home page. Careful selection and testing matters.

But, part of this also has to do with the competitive landscape. If the retailer’s selection and pricing aren’t competitive in that particular category they will struggle no matter how well the PPC campaign is managed. While catalogers benefited from the fact that their 800 number offered the only shopping opportunity the recipient had in front of them at that moment, not so with paid search. The speed and ease of comparison shopping online makes brand distinction very difficult for commodity retailers.

Finally, if the look and feel of the landing page, site navigation and shopping regime, the “package”, are poor a retailer will lose sales they could have had if the shopping experience was easier. Cross-sell and up-sell features help websites generate more revenue per order, helping to make up for the absence of a salesperson. Site design and selling features play a role in PPC performance, too.

All three pieces matter, but they are not equally important. Placing too much emphasis on the landing page design, while neglecting the keyword list, match types, negative associations and bidding is like an emergency room treating a gun-shot victim’s acne. Should it be done? Yes, but after the patient is otherwise healthy.

Corner offices around the country seem to place undue focus on the bells and whistles of their website, while allowing their “list” to be handled by amateurs with inadequate tools and knowledge. The mechanics of PPC have lost their cache, and the focus of marketers has too often been drawn to the new, sexy, and readily visible over the all important blocking and tackling that ultimately determines success.

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6 Responses to “List, Offer, Package in PPC”
  1. I’d add that the corner office spends too much time focusing on what the competition is doing and too little time focusing on what matters – THE CUSTOMER. Then of course they also say “how come we’re number 4 on this keyword today when we were number 2 yesterday (when they went around the web clicking and raising the company’s costs).

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