A Pay Per Click Lawsuit That Has No Chance

According to TechDirt, Google is being sued by a lawyer who claims Google has been practicing “fraud, business code violations, and unjust enrichment” because he didn’t get any leads out of $136.11 he spent on pay per click advertising.

His perceived underperformance comes from the source of traffic he was being charged for. The ads he is upset with Google about ran on parked domains and error pages. Pages, he feels, are incapable of delivering valuable, lead generating traffic.

This seems confusing on many many levels to me. Here are a few other things he could do rather than sue:

1. He could test the performance of his ads, then make adjustments to his campaign if he’s not satisfied with the results. A $136.11 lesson learned.

2. He could check the box within his Google AdWords account that would prevent his ads from showing on content related sites. In general, pay per click search traffic converts at a higher rate. However, for that reason, it also tends to cost more per click.

3. He could lower his bids for content targeted traffic. It probably would convert for him eventually. For the right price per click, he’d probably be very satisfied with the results.

4. He could work on his own website to improve the conversion rate. Perhaps there are things he could have done to his site that would have allowed him to generate leads from the traffic he did receive?

I don’t think I could explain this any better than Andy Beal at Marketing Pilgrim, who wrote:

I’m guessing that his ad campaign just plain sucked. After all, if it didn’t, surely he’d have enough leads coming in from Google’s other channels to keep him busy enough to not have time for frivolous lawsuits.

A class-action of people who didn’t read the manual.

Which Side of the Long Tail Should You Start On?

Imagine this: your business decides to spend money on pay per click advertising but doesn’t have unlimited funds.

I imagine it’s not too tough to imagine that scenario.

Given a limited budget, you’re faced with decisions on where to spend a limited amount of money on pay per click advertising.

One approach I’ve been discussing lately with colleagues is – given a choice – would you be better off starting on the near or far end of the long tail of keywords. Should you spend your limited funds on gaining visibility on the most common search terms used in your industry? Or should you focus on the most specific terms a person may type into a search engine that are also relevant?

In my opinion, a business would generally be better off starting at the far right and working their way to the left from there up to what their budget allows. This strategy allows businesses to focus limited ad dollars on the most targeted terms that are further down the buying cycle. Terms in this category tend to be cheaper on a per click basis and convert at a higher rate than higher search volume, more generic terms.

Not everyone agrees with this, but I think it’s a sound strategy. What’s your take?

Not All PPC Clicks are Created the Same

Aaron Wall has an excellent explanation of why a click costs so much more on Google on average than a click for the exact same term on Yahoo. As he explains, it really comes down to the quality of the syndication partners Yahoo has partnered up with to display ads:

How Click Arbitrage & Dirty Ad Syndication Killed Yahoo! Search Marketing

Put another way, a Yahoo! click for mortgage is worth the same $15 that it costs on Google, but it goes for less than $5 because Yahoo! forces advertisers to eat junk traffic too. If Yahoo! virtually killed off their syndication partnerships (at least all but the cleanest ones) their short term revenue might decrease, but their click values & click prices would sharply increase.

A common misperception is that a click for a given term should be nearly equal across all search sites. If someone is looking for a mortgage, is shouldn’t make much difference whether they happen to start their mortgage searches by typing the term into Google or Yahoo’s search box. And this is true for the most part, outside of some demographic differences between search sites.

What’s killing Yahoo’s cost per click is their syndication partners. An ad placed into Yahoo’s search marketing program appears not only on Yahoo (where you’d expect it to) but also on over 1000 additional sites through syndication relationships Yahoo has built over time. Yahoo splits the value of each click with the syndication partners. Unfortunately, traffic from syndication partners – on average – performs worse than traffic on Yahoo itself. How much worse? Enough to make the value of a click on Yahoo 1/3 of what it might be on Google for the same term.

Is this good or bad? Well, neither, from my perspective. The real-time fluid market that is PPC advertising has managed to determine the market value for terms based on historical conversion rates.

As Wall points out, Yahoo could fix this by giving advertisers more control over where their ads are shown, and for how much. Surely, advertisers would be willing to pay more per click when ads are shown just on Yahoo’s own search property. And Yahoo takes home a larger percentage of the revenue generated from those clicks, so it would be a big win for them. Advertisers would likely continue serving ads to Yahoo’s syndication partners, but at a more reasonable rate than they’re forced to pay now.

Beyond Google and Yahoo, there are quite a few more pay per click advertising networks you could try. It’s quite common to see advertisers see some success with one of the big players, then look elsewhere to see if they can find even more PPC traffic – and possibly some at lower costs per click than what they’re paying with the top-tier PPC sites. Unfortunately, problems with quality become more and more rampant as you move down through the tiers, so don’t get your hopes up too high. Just be sure to have a decent analytics plan in place before throwing money into this type of advertising.

The Long Tail of Short Heads

I’ve been trying to think of a way to illustrate the point I was trying to make in yesterday’s post about the value of “micro-short-tails”* and came up with this:

Search Terms by Product

Theoretically, the bars on the map represent three products sold on a website. They vary in popularity with Product A being more popular in terms of both traffic (and revenue, in this case) than Product B or C. The horizontal access represents search terms, so the left side of the graph shows that some terms drive a lot more traffic than terms further to the right. A typical hockey stick style graph (this is based on real data).

The point here is that, while the graph for Product C happens to be smaller than Product A, it’s no less valuable when you’re looking at just that product.

When someone looks at the value of keywords at a very high level, the terms driving traffic to Product A will appear to be vital, but Product C’s terms may go unnoticed or become under appreciated. It’s kind of a battle vs war type issue.

The nice thing is that it’s often possible to figure out patterns of success. The types of terms that drive traffic to Product A will probably also work for Product B through infinity if applied in a similar pattern of ads, landing pages, offers, etc.

So, while it’s true that you’ll have less data to work with on really really long tail products due to low search volumes, it’s still possible to make some fair assumptions that more often than not will prove correct.

* I think better term for this would be “Micro-Short-Heads” rather than “Micro-Short-Tails”

Are Long-Tail Keywords a Waste Of Time for Pay Per Click

Brian Carter of Fuel Interactive raises an interesting point about the effectiveness of keywords in the long tail of pay per click advertising. It has long (in Internet time) been thought that advertising on a huge portfolio of search terms will generate better returns because you’ll get a trickle of traffic from thousands and thousands of terms at low cost per click AND the traffic will convert at a higher rate for a double gain in returns.

However, Carter explains that this isn’t necessarily the case:

The Problem with Long Tail Keywords

But the dirty little secret of PPC is that 95% of your conversions come from 5% of your keywords.

Really.

The others keywords either

* Don’t perform (100 clicks and no conversions), or
* The clicks roll in so slowly that you won’t have the statistical confidence to delete them until the year 2112 (yay, Rush!).

As I said, interesting points.

While 95% of conversions may come from a small sub-set of a keyword portfolio, that doesn’t necessarily mean that the rest of the portfolio is underperforming. The rest of the terms may not deliver as many conversions, but that’s not really a measure of performance. Return on investment would be a better measure.

But more importantly, I think the biggest concept that could be misunderstood here is what I’ll call “micro-short-tails.” By that, I mean terms that get relatively few searches, but are still clearly short-tail terms when looked at on a page by page basis. For example a retail site could have thousands of products in inventory – some of which are relatively obscure. On a page by page basis, it’s pretty clear that product-names and product-IDs would be considered short-tail terms while on a site-wide basis they would look more like long-tail terms.

In many cases, patterns of “micro-short-tail” terms can be generated and properly targeted to truly relevant pages.

Is this long tail or short tail? In my opinion, it’s all relative.

I think Brian and I would agree that measuring what’s working and building upon successes is the key to running great pay per click campaigns regardless of how different strategies are defined.

Search Marketers Favor MSFT/YHOO Deal 7:1

After my recent post explaining why a MSFT/YHOO merger would be good for the combined company because it would establish an obvious #2 for pay per click advertising dollars, I was pleased to learn that I was not alone in this line of thinking.

Andrew Goodman reported from Search Engine Strategies London that search advertisers, in an informal poll, thought this would be a good move from their perspective by a 7:1 margin.

Could a merger be good for advertisers? As Goodman put it, “Users are king, but advertisers pay for all this stuff.” Advertisers will spend more money if it becomes easier to do so.

Why MSFT / YHOO Makes Sense for PPC Revenue

I’m working from the assumption that pay per click advertising is the most profitable form of advertising served by Google, Yahoo, and Microsoft today. It may not be the largest share of advertising on Yahoo or MSFT’s site’s today – display ads may still be larger – but the biggest money is in PPC search ads.

Assuming that’s the case, here’s the situation I see: Google has quickly become the dominant market leader in pay per click search, dwarfing Yahoo (formerly Overture, formerly Goto.com) and Microsoft’s slices of advertiser’s pay per click ad share.

At this point, pretty much every new advertiser entering the PPC ad space will start with Google. If you’re going to take the time to learn how to do this type of advertising, you may as well start with the site that will generate the most traffic for your time. Notice that I said “traffic for your time” and not traffic for your money. It’s quite possible that you could drive traffic at a lower cost per click on Google’s rivals, but there is also much less traffic to drive.

After starting out on Google, getting up to speed on pay per click advertising, and gaining confidence in this type of advertising, many advertisers will think, “I’d like to get some more of this PPC action.” So they look to either Yahoo or Microsoft next. After choosing one of those two, they spend time duplicating their previous efforts while learning a second pay per click advertising interface. Once their ads start running, they find that their 2nd choice provides only a fraction of the traffic of Google.

At this point, they start thinking about whether it’s worth going through the trouble with a 3rd PPC provider. Is it? Well, probably yes, but I get the impression that few do.

If Microsoft and Yahoo merged, there would suddenly be an obvious 2nd choice to Google for pay per click advertising.

Or, without merging, they could just make their PPC programs cross-compatible so a campaign set up and managed on Yahoo could also display ads on MSFT properties and vice versa.

Amazon.com Launched "paper click adds"

Amazon paper click adds invitation

I just received an invitation to check out Amazon.com’s new “paper click ads” which sounds really revolutionary.

Paper click ads sounds like you somehow click on paper, causing something to be added to the paper. This must be in beta.

Or, it’s quite possible that the person writing the service’s invitation email has no idea what their developers have built.

Could this be a “Pay Per Click Ads” service? I think that’s a bit more likely.

In reality, it looks like a PPC based advertising option where advertisers can place ads on specific product pages. For example, if you make an iPod accessory, you could place an ad for that accessory on an iPod product page that links to your story (leaving Amazon.com) on a cost per click basis.

I think Amazon has realized that it’s sometimes easier to make money by driving people away from their site to other relevant content rather than converting sales and shipping products. This will vary by category and product, but they’re probably onto something with this concept – once they get their marketing people understand the difference between “Pay Per Click Ads” and “paper click adds.”