May 8, 2014
One of the hardest thing to do in the PPC biz is scale accounts that already perform well and have history. I believe this is because we focus on small optimizations and lose sight of the enhancements that will catapult the account.
This applies to the business as a whole. Sometimes I focus on one or two things we do that I don’t like, instead of the 1 or 2 things we aren’t doing that would revolutionize our business.
I’ve turned to the 80/20 Manager (which I’ve referenced many times in the past) for a reminder in how to prioritize correctly. For those who don’t know, the 80/20 rule states that 80 percent of your results come from 20 percent of your effort, and that 80 percent of your effort will lead to only 20 percent of your results.
This time through the book, the lesson that resonated with me is that this doesn’t mean some things are 4 times more effective than others (80% instead of 20%), but rather that some things are 16 times more effective! Here’s the math using a simple example.
If there are 100 tactics, or activities, that drive 100% of your leads, 20% of those will drive 80% of the result, while the remaining 80% of the activities will drive only 20% of the result. If you assume the tasks in each of these groups contributes equally to their share of the result, that means:
20 leads / 80 activities = .25 leads per activity
80 leads / 20 activities = 4 leads per activity
.25 goes into 4 16 times; activities that generate 80% of your results actually have 16x the impact of those that drive the other 20%.
Does this change anything? For me it does. When I think through an account, I don’t think about what would drive 4x the impact. I think about what will likely drive 16x the impact. That’s a big number. Simply adding negative keywords isn’t going to drive 16 times more cost savings than pausing one or two ad groups that waste a lot of money (even though they get a few conversions).
By that same token, adding a few keywords isn’t likely to drive 16 times more leads than launching an entirely new search engine.
A lot of small stuff will get missed in the application of the 80/20 principle. A lot of little things that do impact an account on a smaller level will be overlooked. Many opportunities to drive a few more leads will remain untended. But your account will scale by leaps and bounds.
*Edited by Kevin Klein