The Two Strategic Choices in PPC

The Two Strategic Choices in PPC

Scale vs Efficiency and what to do about both

I’m an evangelist for paid search. However, I also frequently point out that PPC is not business rocket science – it’s just maths. Sure, there’s all kinds of whizz-bangery and boffin-oriented tools. I know, we use plenty of them and developed our own.

PPC is a technically and tactically difficult thing to implement. (That means, lots of grunt work.) However, I would argue that it is not strategically difficult to plan out. I’d like to unpack that notion.

Business Strategy usually refers to a high level question: “what are you trying to achieve?” Within PPC, there are really only two answers to that question. That’s right, there are just two strategic directions to be taken within Paid Search. They are Scale and Efficiency.

Scale

Goal: More of the same – in the best sense of that phrase.

Pursuing scale in paid search means you’re looking for more throughput. More sales, more leads, more clicks and impressions, without necessarily lowering your cost per conversion. (In fact, it might even creep up a little bit in some cases!)

If you have a paid search campaign running, and it’s profitable, then you’ll likely want to make Scale your strategic priority.

Within Scale you’ll fine tactical moves like:

  • Mining query reports for more niche keywords.
  • Exploring the expansion of broad match keywords in your campaigns.
  • Advert split testing to see in you can increase your CTR.
  • Upping bids to see if you can get more volume through appearing in a higher position.
  • Expanding your campaigns onto Bing ads or other search networks.
  • Deploying new elements like product listing ads and site links.
  • Expanding the time periods your ads display on.
  • Increasing your budget to get more impressions share.

Efficiency

Goal: Drive down the cost per conversion.

Pursuing efficiency means you’re looking to drive down your cost per conversion, even if it means you loose out on volume a little bit.

If you’re running a paid search campaign and your margins are too tight, your cost per conversion too high for comfort, you’ll want to focus on Efficiency as your first strategic priority.

Tactical moves within the Effeciency strategy include:

  • Advert split testing to see in you can increase your CTR.
  • Splitting out ad groups to see if you can drive up quality score.
  • Testing new landing pages to see if you can increase conversion rate.
  • Analysing broad and phrase match keywords for waste and blocking with negatives.
  • Checking day and time parting reports to see if you can find opportunities to bid down or change messaging for specific times.

Pick One

The tick is you can only pick one.

Some of the tactical tasks are the same: split testing ads and landing pages are good examples. However, the overall goal is different – what end point you’re measuring will change how you set up your experiments, and when you measure success.

Trying to focus on scale and efficiency at the same time is a recipe for disaster.

If you’re mostly happy with your profit margins and want more, more, more, choose scale as your first priority. Scale your campaigns until you hit the limits of what’s out there or your budget. Then, shift focus to efficiency.

If you dread the thought of selling more with your thin margins on PPC or your cost per conversion is just too high, choose efficiency as your first priority. Hammer away at efficiency gains until you find you’re getting diminishing returns on your effort. Then, if your margins are profitable, focus on scale.

Lather, rinse, repeat!

Conclusion

In a way, this post covers more of the philosophy behind PPC. (Can you blame me? It’s what I studied in school.) Choosing which high level strategy to pursue first is the most important thing you can do when running a paid search campaign. It will inform the metrics you use for success, when you define the success or failure of an experiment, and will keep you from losing the forest for the trees.

While PPC takes technical skill and plenty of grunt work to do well, in its planning phases it’s really quite simple!

No Comments

Sorry, the comment form is closed at this time.