Baseball and PPC – Know Your Cleanup Hitter
December 28, 2011
I love the game of baseball. There’s a reason it’s America’s pastime. It’s the perfect blend of individual effort and teamwork. I only played baseball for a few years but I have so many fond memories of those playing days and even more from my time as a fan since then. My team is the Chicago Cubs. No reasonable person should root for a team that brings him or her so much sorrow. You’ve got to love baseball to be a Cubs fan. So what does baseball have to do with PPC? Well, they’ve each got a cleanup hitter.
In baseball, you want to put the guy most likely to drive in runs in the fourth position of the lineup. This lets the first three batters get into scoring position, waiting for the big bat to come up and drive them home with an extra bases hit. You’ve got the same thing in PPC and it’s called remarketing.
You see, remarketing campaigns will typically have high conversion rates and drive low lead or sale costs. Remarketing only serves ads to folks who have picked up the cookie by visiting your website previously. These people have already interacted with your brand and are more likely to convert that the average player. You need to get some runners on base so remarketing can drive them home. I feel that people often give up on certain PPC channels too early because they don’t see the instant results that they’re looking for. With multi-channel funnels you can now (and without cost) see what channels are assisting others in conversions. This technology allows us to dive deeper into the true value of a click.
Lets say you have a search network keyword click that costs you a dollar and you have 1 conversion after 100 clicks. If the margin on your product is $99, you just lost a buck. If this happens over and over again, you might be inclined to turn that keyword off as running it keeps costing you a buck. What I’d like you to consider is what happens to the other 99/100 clickers who didn’t convert? Sure some of them might have no intention on coming back but I’d say it’s good money that some of them might truly be interested and simply don’t purchase right that second. Maybe some of those folks can’t remember who you are in the future and can’t replicate how they found you to begin with. That’s where remarketing comes in.
With remarketing on display, you have the power of Google’s network behind you. The display network will work to put your ad right back in front of that customer who just needs a simple reminder. The first click put that person on base, remarketing is going to hit them home. Your going to have lots of campaigns, adgroups, or keywords that you feel are underperforming but if you start looking at assists, you might change your mind. In the example above, if you had one conversion and two assisted conversions, wouldn’t that make you reconsider turning the keyword off? Even if you only assigned 10% of the value to an assist (which I feel is low), that would still put you at $21 profit on your $102 investment (the original $100 in search plus an extra $2 for the remarketing clicks). If the other 90% of the value gets assigned to the remarketing campaign itself, you would just need a remarketing conversion rate of greater than 1.1% to be profitable all around. A 1.1% conversion rate on remarketing and 90% value would mean roughly $0.80 profit on $100 investment in remarketing.
I’ve over simplified the math here and obviously the conversion rates are conservative but hopefully you get the point. You’ll need to shift the numbers around as they apply to your business but sometimes campaigns are truly performing better than you think they are based upon conversion numbers alone. You could be severely limiting your reach and effectiveness by not considering how to make these fringe campaigns work for you. Can you afford slightly higher CPLs if it means more top of funnel leads your remarketing campaign can drive home later? In every instance where I’ve explored this, this has been the case. Sometimes you just have to let your heavy hitters do what you signed them on to do and let your role players be role players. You’ll win a lot more often if you do.
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