First, We Fell in Love.

As is typical with new relationships, when I was first placed on this account, I had so many plans! Restructuring, realigning settings, ad testing…and on and on. Again, as is typical with a new relationship, we had a week or so of getting to know one another and the general ins and outs of the campaigns, how they spend through the week versus the weekends, etc. Once I had a firm grasp on where we could make the biggest impact, I prioritized my tasks accordingly and set up month-to-month outlines of when I would test particular elements, when to expand and contract the account and all the optimizations I was looking to make from my end.

Then I Found Out There Was Someone Else…

Not long in to the relationship, I had a sit down meeting with the client to discuss the account’s performance. Things were going well; PPC metrics will steadily improving and revenue was at least even, if not exceeding, revenue year-over-year. However, the client had seen a recent trend in in-store sales where accessories for our product were selling more than our main products. Also, the client had recently discontinued a brand of a particular accessory in lieu of an exclusive contract for better margins. Essentially, the client was asking me to alter my game plan for the upcoming months and shift spend more towards accessory-based keywords, particularly the keywords for that discontinued stock. This wasn’t necessarily going to throw off my entire plan, just required a little alteration, so no problem.

Unfortunately We Had A Fight…

I began making these changes rather quickly to assist the client, as needed. Not long after, I started to see a bit of a dip in revenue across the board. We had switched to a new CMS in that same time frame; so much of the drop was attributed to making that change. Another two months later, we had stayed fairly on top of our revenue numbers, but the decrease was visible. We were running head long in to the holiday season at this point, so focus was moved to breaking out holiday-based campaigns with accompanying ad copy. This moved the needle a great degree through November and December. Once January showed up, though, we had a much bigger rift in our relationship than we thought.

And Then He Left!

Still reeling from our vast increase in PPC metric performance and huge revenue numbers to end the year, it came as a bit of a shock when January’s revenue numbers almost completely stalled. We went from doing around $100k in sales a month to doing about $25k for the month. Guess who wasn’t happy? The client and myself. My client wasn’t making any money and all the work I had put in to ad testing, increasing quality score and expanding reach to increase PPC metrics was practically ignored. Why? Because at the end of the day, if the client can’t pay the bills to keep the lights on, my 300% increase in CTR is pointless. Those clicks need to equal sales and revenue. Revenue straight up left me. He didn’t even leave a note…

So I Did A Little Soul Searching.

And by soul searching, I mean account analyzing. I dug in to pieces of our Analytics and AdWords that I’m sure had never been touched. What was incredibly frustrating was that by all normal measures, revenue should be going up. I’m sending through more qualified clicks, but making far less money. Then I decided to check out the comparison of my accessory and main product keyword spends to their revenue production. What did I find? Over the last 9 months, I had slowly shifted to spending 70% of my ad budget on accessories and only 30% on my big revenue earners. Basically I was sending through more clicks because it’s a larger pond of accessory buyers to fish in than it is to hang out around the main product puddle. However, that little puddle was worth three times as much as the whole pond and I had stopped investing in the pond.

But I Wooed Him Back!

As soon as I found the issue, I was relieved to find that my error was a fairly simple fix: realign budgets more heavily to my main product campaigns and ad groups and less towards my accessories campaigns and ad groups. We’re currently seeing the return on that change and I’m happy to report…revenue is making some headway! My secondary goal now is making sure my PPC metrics stay level to where they are now or continue increasing, with increased monitoring over spend versus revenue when it comes to accessories over main products.

The Moral of Our Love Story

You don’t need anything but lyrics:

“…hold on to the end. That’s what intend to do. Hopelessly devoted to youuuuu.” There will be times when you’re doing all you think you can do to move the needle, but revenue just doesn’t cooperate because of a secondary focus. At all times, when changing up your game plan, for whatever reason, make sure you realign all your goals and consider all the outcomes so you can prepare yourself.

Check back tomorrow for the full series wrap-up and be sure to leave your thoughts, experiences and suggestions in the comments section below!

After a few hours of reading PPC Hero articles and playing around in the AdWords interface, they’ve set up a couple campaigns, put together a budget and a default CPC and that’s it. Done. Typically, the SMB owner just sits back and hopes that customers and money come pouring in. They might be a little more realistic and just hope that the money trickles in at a greater rate than they spent. At any rate, most of them don’t realize that there is more to PPC management than just throwing some money at the machine and waiting for it to print more money for you in return.

When their campaigns don’t turn into money machines, they usually freak out a little bit, try to wait a little bit longer and then eventually just quit, figuring that it doesn’t work for them. What the small business owner doesn’t realize is that they never once went back and looked at their bids. They might have paid enough to rank first or second on their keywords, and got a bunch of clicks, but their cost per acquisition wasn’t where it needed to be to make it worthwhile. Of course if the SMB was with an agency, their people would have figured out the ideal CPA and bid accordingly, but we’re talking about the businesses that agencies won’t even look at because of the budget size.

Here’s where bid automation is perfect. And I’m not talking about Google bid automation, I’m sure they do a great job (and I suppose I love them because without them I don’t have my job) but the thing that scares me is that their bottom line is making money with your advertising dollars. Third party bid automation tools make their money by trying to save you as much money on your CPA while getting you more clicks.

I know bid automation isn’t very popular among SEM experts at agencies because bidding is their job, but typically they aren’t helping the kind of people who can really benefit from automation. For that reason, I feel very comfortable recommending automation services to small business owners spending more time on AdWords than they’d prefer (which is probably somewhere between 0-10 minutes a week) analyzing and adjusting bids and especially to those who haven’t realized how important bid management is at all.

Trace Ronning is the social media coordinator for WordWatch. They’re dedicated to delivering small business advertisers better results for their money. He blogs about small business and paid search at blog.wordwatch.com and you can follow him on twitter @WordWatchPPC.

Bootstrap it! Start small and continually reinvest the profits to grow the campaign.

1. Choose a Niche

Select a niche market that represents your entire market well, so that you can learn from and scale the campaign once you are profitable. The goal is to develop a manageable campaign that has traffic, yet is small in size and low in competition. This will allow you to pay less per click and conserve your budget while figuring out what traffic sources work.

2. Travel down the long tail

Choose long tail keywords and avoid high-level 1 and 2 word keyword phrases that are highly competitive. For example, if you are in the car insurance industry, avoid keywords like “car insurance” or “auto insurance”. Instead, advertise on longer tail keywords like “car insurance in los angeles” or “car insurance for 2008 honda odyssey”, etc.

3. Keep it small

The most important part of creating a successful campaign on a small budget is to keep the entire campaign small. You’ll need to select a small group of keywords to target and focus on. You should still create separate search and display campaigns but keep them both small and consider focusing more on one than the other.

Your goal is to maximize the spend of your limited budget on a minimal amount of keywords. You need to receive several impressions, clicks and conversions for each keyword and creative in order to optimize. If you only receive 1 click or conversion for every keyword or creative in your campaign you won’t know the actual effectiveness of your campaign.

4. Maximize your budget

No, I don’t mean maximizing the spend of your budget, but rather maximize the usage. Get the most from your budget by learning and spending it effectively.

Advertising networks don’t want you to know that it’s possible to create a profitable campaign by spending very little, but you can create a successful campaign with as little as $25-$50 a day. Of course it’s easier and faster to throw a lot of money at a campaign and learn what works and what doesn’t. But, when you don’t have a large budget, you don’t have the luxury of simply spending more to learn.

Early in your campaign your budget will go towards “learning”. This “learning” is not wasted spend, since you can’t learn without spending. Once you’ve learned all you can you’ll be able to optimize and grow the profitable areas of your campaign.

5. Keep testing to a minimum

Testing and optimizing is what makes PPC campaigns succeed and differentiates the winners from the losers. But, with a small budget you will need to keep testing to a minimum.

With a small budget campaign each ad group should have a maximum of 2-3 ad text creatives and landing pages can only effectively be tested via A/B testing. Remember, you need a lot oftraffic to determine what works, so you’ll need to focus your small amount of traffic on a few tests to learn and know for certain where and how to optimize.

6. Set it and forget it

Set up your campaign and then forget about it. Your budget will ensure that you don’t lose or waste money, but you need to let your campaign run for a while so that you can learn from the statistics that you gather.

It will be difficult to sit back and watch your campaign run and spend without touching it. But, resist the urge to make any changes before your campaign has received enough statistical data to make the correct decisions.

7. Grow and then grow some more!

Once your campaign is achieving profits you can begin increasing your budget. You’ll start by slightly increasing your campaign budgets a little bit at a time. Increase your budget by double, and then run it for few days or a week. Make sure it’s still profitable, then double it again and run for another few days or a week. Continually repeat these steps until you’ve got a very profitable campaign that is self-sustaining.

Once you are at this point you’re budget becomes irrelevant and as long as you have the cash you can continue spending and growing your campaign based on profits, rather than based on a budget. Now you can grow the existing campaign and/or start another niche market campaign and repeat the process again and again.

Mike Williams is the Founder and President of Clickworks Marketing. Mike has been involved in online marketing since 2004 and has a wealth of experience in lead generation, search engine marketing, landing page optimization and web marketing strategy. Mike is a Google Adwords Certified Professional and has years of experience managing advertising campaigns on Google, Yahoo!/Bing and Facebook.

Should You Optimize to Show at Top of Page?

As always, some accounts/keywords perform better on top, and others on the side or bottom. In order to determine if you should optimize for Top placements, segment your view to see what ad position (Top Vs Other) performs best for you. If your analysis shows you want to be on Top, then enable the column Est. top page bid. This tells you what Google things you need to bid at auction in order to have the best chance to show at the top position.

From there, it’s pretty simple. Adjust your Max CPC bid to those estimates, and you are good to go. And Google has just made it easier to make these changes in bulk. They did this through an update to both the Automatic Rules and the AdWords Editor.

Using Automated Rules for Top of Page Bid Changes

1. Click “All online campaigns” in the left panel of your account.
2. Go to the “Keywords” tab
3. Click the “Automate” button and select “Raise bids to top of page CPC when…”
4. Fill in the details of the rule so it will perform as you desire.

Here’s a screen shot of creating an automated rule:

Using AdWords Editor 9.7.1 for Top of Page Bid Changes

The newest version of AdWords includes an option under the “Advanced bid changes” link when you are on the Keywords tab. Clicking on this option will bring up a dialog box. From there, you simply select “Raise keyword maximum CPC bids to their top of page bid estimates” and it does the work for you.

Thanks for reading, and stay tuned for more news updates from PPC Hero!

Check out our video blog page for more video blogs!

AdWords Bidding Options Overview

There are currently three main categories of keyword bidding:

• Focus on clicks
• Focus on conversions
• Focus on impressions

Within these three categories are specific bidding options to choose from…

Focus On Clicks

With AdWords cost-per-click bidding system, you only pay when someone clicks on your ad. If you are focused on driving traffic to your site you should use one of the focus on clicks keyword bidding options below.

Manual Bidding For Clicks

With manual bidding you set the maximum CPC you are willing to pay at the ad group, keyword, or placement level.  Manual bidding gives you the most control over your account.

Automatic Bidding For Clicks

You just set a daily budget for each campaign and AdWords automatically adjusts the Max CPC to bring in the most clicks possible within your budget. With this bidding option you can’t set a specific CPC bid but you can set an upper limit for bids.

Enhanced CPC Bidding

Enhanced CPC bidding is a feature you can use in conjunction with the two bidding options above. The feature automatically raises or lowers your Max CPC bids to get more conversions at or below your current cost per conversion. AdWords analyzes historical conversion data to estimate the conversion rate for each auction in which an ad is eligible to show. It then automatically adjusts your Max CPC bids based on the probability that your ad will convert. This feature can increase your bids by up to 30%, so you could pay more than your set max CPC. There is no minimum bid limit.

Enhanced CPC bidding works in the same way with manual or automatic bidding. If you use Enhanced CPC with manual bidding, you can continue to manage your CPC bids as often as you like. If you use Enhanced CPC with automatic bidding, the CPC bid limit you enter will be treated as a limit on the Enhanced CPC bid. Your campaign budget will continue to work as normal.

Enhanced CPC continually monitors and optimizes its performance by keeping a portion of your traffic with your regular (not enhanced) Max CPC bids. If it detects that it’s hurting your campaign performance, Enhanced CPC will automatically reduce its impact. The goal is that opting into Enhanced CPC should have a positive or neutral effect on your campaign’s conversion volume and CPA.

Focus On Conversions

The focus on conversions (Conversion Optimizer) bidding option uses historical conversion data to find the optimal CPC bid for your ad based upon the cost-per-acquisition (CPA) parameters you set for your campaign. You can use this option for campaigns targeting both search and display networks. However, there are a few requirements a campaign must meet to use CPA bidding.

1. AdWords conversion tracking must be enabled
2. The campaign must have receieved at least 15 conversions in the last 30 days.
3. The campaign must have been receiving conversions at a similar rate for at least a few days.

There are two bidding options under focus on conversions:

Max CPA Bidding

A maximum cost-per-acquisition (CPA) bid is the amount you’re willing to pay for a conversion (such as a purchase or signup). When you enable the Conversion Optimizer for a campaign, you set a maximum CPA bid for each ad group.

Target CPA Bidding

This option allows you to bid based on the average amount you’d like to pay for a conversion. For example, if you want to achieve an average CPA of $25, you could use this option and set your bid to be $25. If you have CPA targets that you’d like to reach, you might prefer to use Target CPA so you can specify those goals directly.

For more information on CPA bidding basics and best practices, you can view this post I wrote back in July.

Focus On Impressions

Focus on impressions bidding is only available for campaigns that only target the Display Network. Instead of bidding and paying for clicks you bid for ad impressions. This option uses the cost-per-thousand impressions model (CPM) which means you pay every thousand times your ad appears. CPM bidding works best if you are interested in increasing brand awareness through ad visibility.

When you choose CPM bidding, you set a maximum CPM bid or the amount you are willing to pay per thousand impressions. CPM ads are ranked for display according to their CPM bid and compete with both other CPM ads and with CPC ads. A CPM ad always occupies the entire ad space, with either an image ad or other multimedia ad, or an expanded text ad. For this reason, you might wish to bid higher for CPM ads than you would for CPC ads.

Analysis of AdWords Bidding Options

Now that you are more familiar with the bidding options, I want to share some of my experiences with how they affected campaign performance.

Manual vs. Automatic Bidding for Clicks

I tested automatic bidding for clicks on a client with a small budget account. All campaigns were limited by budget in AdWords but we didn’t have the option to spend more. This client also sells high priced, custom items so has few conversions per month. Because of this, driving traffic to the site is our main focus.  I set up automatic bidding for clicks in the highest traffic campaign and let it run for 30 days. Below is the comparison in average daily performance between manual and automatic bidding for clicks. (During this period daily budget remained the same.)

I was actually surprised by how well this bidding option worked. It brought in an average of 19 more clicks per day for $0.17 cheaper than manual bidding. The decrease in cost came from a decrease in position, which once again proves that being in the first or second spot doesn’t automatically mean improved performance. I also had 5 conversions with automatic bidding than with manual bidding, which I think is partially due to driving more traffic with our budget. I would recommend testing out this bidding option if you have an account that focuses on driving traffic and has a limited budget.

Enhanced CPC vs. CPA Bidding

I’ve had success with CPA bidding for campaigns which generate many conversions per day. My CPA is always around the target I set and it is a great time saver. I expanded CPA bidding to a very targeted campaign which had a high conversion rate but only a few clicks and conversions per day. During a call with a Google rep they discussed the differences between Enhanced CPC bidding and CPA bidding. They said CPA takes a little more tolerance to risk, and works best for campaigns that generate 50-100 conversions every 30 days, even though you only need 15 conversions to be eligible. Enhanced CPC has less tolerance for risk and is recommended for campaigns with 10-15 conversions in the last 30 days.

Well, my campaign I was working on only brought in about 20 conversions per 30 days so I decided to test out Enhanced CPC. The data below shows the results with each bidding option running for one week.

Needless to say, the test did not go well. Enhanced CPC did increase my clicks, but more than tripled cost per conversion! My conversion rate also decreased from 10.76% to 2.56%. Since this client’s main performance goal is CPL, I turned off enhanced bidding and switched back to target CPA.

Notice that even though cost per conversion was back in the $18.00 range, conversions were about half of what they were prior to Enhanced CPC. Since conversions dropped, when I switched back to CPA bidding Google was more cautious since in the campaign’s history there was now a week with only 1 conversion. It took a while to ramp back up to normal performance so I would suggest going back to manual bidding for awhile to build up good history before enabling CPA bidding.

Also note that if your conversion tracking stops working you need to switch to manual bidding immediately! Google doesn’t know conversion tracking was removed, all it sees is that your ads are no longer converting. In response they will pull back heavily on impressions and you will get very little traffic.

Overall I like using automated bidding when it works. Test, test, test to make sure you are actually improving performance before committing to any type of bidding strategy. Have any of you had similar experiences with these bidding options or do you normally stick to manual?

The majority of people are using manual bidding for clicks in their accounts. Less people overall are using any automatic bidding options in Google and only 11.8% use CPM bidding in Display campaigns. When asked which bidding option was the most successful, Manual bidding was again the winner.

We also got some great comments about bidding options which you can check out here. I’ve personally tested all of the bidding options in my accounts except for CPM bidding as none of my clients are focused on branding. What I’ve found is that different options work better in different situations, but I still prefer manual bidding most of the time. I guess I’m just not comfortable yet giving all the control over to Google.

Tomorrow I’m going to share my experiences with these bidding options and which ones succeeded/failed in different accounts and campaigns so be sure to check back! Thanks to everyone who participated and feel free to leave more comments about AdWords bidding strategies below.

We know what you're watching.

To start, it is pretty logical to assume that with majority of keywords, if you bid higher, your metrics will improve. Yes, that is a simplistic analysis, but in general, hey, that’s a pretty solid prediction. So, while bidding on high value keywords, this is what I came to expect. I improved a keyword’s average position that had been performing well to around top position, expecting to reap the rewards. However, I found that even though it was spending more, it performed better in terms of CPL and conversions at a lower average position.

I spent long hours trying to find out why certain keywords performed better at lower positions. There were many variables to consider. I checked the competition in terms of my ad space, I looked at the quality score to see if maybe it had dipped, I looked at search queries., I felt I had exhausted all my options. And then I looked at a wider range of data, and segmented by month in order to see what had changed. Simply put, the only thing that I could see changing month to month was the average position. And then I came to a realization.

Eureka!

When it comes down to it, very few times will we be able to, as internet marketers, narrow down our problems to one variable. And oftentimes, there are too many variables at play to concretely act upon one. So, all we can do is obey the numbers. If a keyword performs best at position 3.5-3.7, and despite all logic and mathematical projection does terrible at position 2, then keep it at position 3.5-3.7. This, is what I have deemed, the “Sweet Spot.” For infinite combinations of reasons all playing together, certain keywords just perform better at a range of positions. And here is how you figure that out.

For as many keywords as you want (I typically do a top 50 list, otherwise this can be very taxing on both Excel and your brain), look at the data for a 6 month to year long spread. Segment by month in your spreadsheet (it will be HUGE), and identify which 2-3 months your keyword performed “ideally.” And then, take the average of those average positions, accounting for a small spread, typically .2 in each direction. And voila, you have your optimal bidding position, or “Sweet Spot.” Target this position, and keep in mind that the bid may change month over month, but the average position should stay stagnant.

To clarify, this is for problematic keywords—i.e. the ones that seem to defy logical best practices. This is a great way to add another metric, another way, to explain poor performance, and then act upon it. So, gather up your problem keywords, check out the data for a wide range of time, and see if their position fluctuates. And if so, find out where they best perform.

I know certain situations where I prefer one over another, but wanted to get some feedback from you guys on which bidding options you are using. Below is a short survey about the different bidding options and please feel free to elaborate on your experiences in the comments section. The results will be published next week along with a post about using the bidding options in my accounts. Thanks!

Google Analytics

Quick Guide to Analytics Multi-Channel Funnels

Dealing with Google AdWords and Analytics Data Discrepancies

Heroview – CRO & Analytics for PPC with James Svoboda

Creating Custom Reports in Google Analytics

Our Guide to Google Analytics IQ Testing: Series

The Display Network

How to Succeed on the Display Network: Series

Rob’s #1 Tip for the Google Display Network: Scale Your Campaigns

Heroview – Unveiling Display Network and ACE Tactics with Melissa Mackey

Remarketing

Adwords Remarketing Success

Remarketing Success & Advanced Strategies

Quality Score

The Ultimate Guide to Google AdWords Quality Score

Understanding adCenter’s Quality Score: Video

5 Tips to Improve Quality Score: Video

Comparing Quality Score Across AdWords & AdCenter

Case Study: Improving Low Quality Score Accounts

Mobile

10 Mobile Landing Page Best Practices

Why All Your Accounts Should be Running Mobile Campaigns

Are You Sure You’re Optimized for PPC Mobile?

Bid/Budget Management

Managing A __________ PPC Account: Series

AdCenter’s Explicit and Implicit Bidding: Video

Strategies for Campaigns on Smaller Budgets

Using Top vs. Side Ad Segmentation to Make Bidding Decisions

AdWords CPA Bidding Basics and Best Practices

Bidding Strategies: Video

If you’re looking for more information about a topic not listed in this post – never fear, PPC Hero is here! (sorry, I had to…). Just head to the red “Categories” tab at the top of our blog!