Does the PPC budget determine the agency fees?

This is a question that I often get from direct clients, smaller agencies or larger agencies who are just starting to offer search marketing services. In all three cases, my client (e.g., the agency or the advertiser) is looking to me to help them price out search services.

For agencies, I actually favor a hybrid model of media percentage and flat fees for larger and more complex PPC campaigns. I personally base my fee structure on hours worked, something I provide prospective clients in the form of a 2-3 page estimate after we’ve hammered out the overall scope of work.

Estimating a PPC Job - A Consultant’s Viewpoint 

To answer the main question here - I rarely base my estimate on the size of the budget because there’s not much difference between putting together a campaign with a $1000/month budget and a $10,000/month budget (for example). In my opinion, budget should only influence fees when it’s very large – over six figures a month, and that’s mainly because it’s generally indicative of a more complex campaign.

Here are the factors that I think should affect the estimate:

• The number of vendors (engines) in the plan – it’s a lot more work to launch campaigns on three engines, monitor, report and optimize them than it is to focus on just one (*cough* Google *cough*) engine
• The number of keywords/categories in the campaign– An e-commerce site with 12 categories and thousands of products has many keyword variables to test, while a company that just sells one product or service (e.g., online tax filing) has a limited number of keywords. Keyword expansion and refinement directly impacts the number of hours spent optimizing a campaign, and should be a factor when estimating hours.
• The potential for campaign growth. Many campaigns I launch start small and then grow into great monstrous beasts that require a lot more time to manage then when they initially launched. As such, I find it’s important to do three-month trials so the scope of work can be re-evaluated to see if 1) an agency is even needed at all and 2) if the campaign has grown/changed significantly where the number of hours needs to be revisted
• The amount of reporting involved. I provide weekly summary reports to most small clients as well as monthly keyword reports. If a client requires more reporting than this (e.g., CPA reports by keyword by week) than I would likely increase the amount of the estimate. Very large campaigns (of the type I manage with the large agencies) often are very complex and have teams of PPC specialists working on them, which justifies the higher cost of retaining these companies to manage a campaign. Well, that and the higher ROI the campaign achieves.

Many of the projects I work on with small agencies or directly with the client amount to about 25-40 hours to launch, and 20-30 hours/month to manage. This doesn’t seem to deviate much for budgets of $50,000 or less, and I’ve begun moving to a flat monthly retainer fee for these types of campaigns.

I’m certainly not sayng that the way I do things is the best way, but so far my clients feel it’s fair and I’m happy with the compensation. I have begun exploring the idea of getting paid for performance with e-commerce or lead-generation campaigns, but I haven’t yet taken that plunge. Still, it’s got some exciting potential.

 

Add comment June 28th, 2007 Jackie

Are you on Wikipedia yet?

Have you noticed how often Wikipedia pages come up in Google’s search results lately? You can bet that the search marketing community has noticed this!

A recent whitepaper released by Karin Blake of Avenue A | Razorfish (full disclosure: Karin is a colleague of mine) provides an interesting perspective on Wikipedia’s role in search marketing.

Karin’s whitepaper titled, “Wikipedia in Search Engine Marketing” provides an overview of the type of company information that is acceptable to post on Wikipedia (hint: no advertising allowed).

The whitepaper states that Wikipedia listings for certain brand terms receive over 2 million impressions (searches) a month and drive over 50,000 visits to that company’s Wikipedia page. And if this juicy stat isn’t enough to compel you to at least add a (legitimate) link to Wikipedia, then this post on theGoogleCache blog should do the trick. It states that 96.6% of Wikipedia’s pages rank in Google’s top ten results.

I did a search for “Avenue A Razorfish” out of curiosity and discovered that the company Web site is listed in the first and second position, and their Wikipedia entry is listed at #3!

Clearly Wikipedia should be considered in your overall search marketing strategy, at least for now. Remember to check out Karin Blake’s whitepaper for tips on what’s acceptable to post about your company.

 

1 comment June 27th, 2007 Jackie

The grasping hands of media (planners)

During the last decade I’ve managed a variety of campaigns for a variety of clients. I’ve forwarded numerous articles, statistics, insights and case studies to a number of clients, prospects, colleagues and friends on the topic of reaching audiences using various channel combinations (online only, naturally).

Here are some of the possibilities of campaign combos for the online channel ONLY (so it doesn’t include other forms of media such as print, TV, Radio and Out of Home (OOH - eg., billboards, etc.).

• Display/Banner Ads via CPM
• Display/Banner Ads via CPC
• Text/Display combo (e.g., Blogads.com)
• Search Marketing (PPC, SEO or a combination of the two)
• CPA (cost per aquisition) alone
• CPA with Search
• Search/CPA/Display
• E-mail Stand-Alone (Direct Mailing to Third-Party Lists)
• E-Mail Stand-Alone/Search Marketing

(and the above list is based on my experience only, it doesn’t include podcasting, blogvertising, mobile ads which are directly related to online ads becauses of the connectivity interweb thing, wikis, and so much more).

If someone were to ask me what was most effective, I’d have to disappoint them with a vague answer such as, “it depends on the campaign, the goals, the target, etc. etc. etc.” But one thing I do know - using one single tactic exclusive of all the others is probably the least effective way to handle your media. It’s like putting all your eggs in one lead-generating basket.

It’s also impossible to underestimate the effectiveness of different online tactics across various industries. Even though my focus is search marketing, I have worked on some campaigns where I’ve sat back and said “search will not work for this client” for any number of reasons including too much competition, not enough money (on the client side), too targeted, too broad, horrible site (again, on the client side) and more.

Media companies grasp at search because they read about how huge chunks of revenue are shifting from traditional channels to online and, paticularly, search. But what they fail to understand is that search is more than a buzz word and it’s way more than a tactic that can fit neatly into every media plan.

So, if you’re planning search into your media the way you plan everything else, then you’re doing it wrong. Take some time to read about why search is special on Search Engine Land, or John Battelle’s Searchblog and while you’re at it, read Battelle’s book titled, “The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture” which provides an excellent background on the history of search, and why it’s so remarkable and compelling.

It’s not that those of us in nontraditional media planning roles don’t want to welcome our traditional bretheren into the fold, it’s just that we want you to get it first.

Add comment April 27th, 2007 Jackie

Where will search be seven years from now?

Search Engine Strategies New York has come and gone. It’s Saturday, so I’ve been home for a full 24 hours, yet I can’t stop thinking about  my experience as an old timer/newbie.

How can I be both?

It’s a funny story that begins seven years ago when I attended the only other Search Engine Strategies conference I’ve ever been to, also in New York. I was able to dig up this old press release about the event and the conference agenda is still available right here on the SES Web site.

Wow, things have changed. The conference wasn’t even a conference back then - it was a one day seminar with back to back sessions all taking place in the same room. I clearly remember having a blinding headache by 5 pm. I also remember shaking Danny Sullivan’s hand (and only having to wait about 5 minutes to do it) and thanking him for putting out all the content on Search Engine Watch, which is how I learned about SEO in the first place.

Last week’s conference was so utterly different from that one-day seminar about getting listed in search engines that I would’ve sworn it was a completely different industry if it weren’t for that fact that many of the same faces still circulated the sessions. But there were so many changes that made me feel like a wide-eyed newbie in an industry I’ve worked in for nearly ten years that I can’t quite shake the Twilight-Zone feeling of unreality even now.

Rebecca Lieb, who I had the pleasure of sitting across from at the Women of Search luncheon on Thursday (organized by Li Evans), nailed one aspect of sweeping change in her recent Clickz post titled, “Search Chicks.” The vast amount of women who now dominate the industry is a relatively new phenomenon. Says Rebecca:

“That first Boston conference [in 2001] was attended by a few hundred propellerheads, and there was never, ever a wait for a stall in the ladies’ room after a session.”

I, for one, definitely had to wait in line for a stall.

As an old search veteran in this new search world, I couldn’t ignore the fact that the industry seems to have lost its new car smell. Even though it sort of feels like 1999, when the Internet was going to change everything and startups were burning through VC funds like Monopoly money, things…aren’t….the same.

I felt it, many of the other industry veterans pretty much stated it out loud (when asked what products/services he was most excited about, Danny Sullivan replied, “none.”) Likewise, Dana Todd stated that all search engines but Google were too boring to talk about and warned we were in a second industry-wide bubble which was in danger of bursting.

I have to agree with Dana, things feel very bubbly and uncertain - a feeling that is all-too-familiar to those of us that survived the dot-com massacre which began some time in 2000 and dragged on painfully throughout 2001 and 2002.

It was like I had a jaded, cynical angel versus a wide-eyed newbie angel, sitting on each shoulder, battling for my resolve throughout the entire conference. At one point I met a young woman with only four months of experience in SEO, who excitedly told me that she’d do just about anything to work in this industry, even if it meant working for free. Did I ever feel that way? If I did, I can’t remember. Jaded angel wins.

Yet after speaking with her I briefly let myself see the industry through red-wine colored glasses starting on Wednesday evening when I had the amazing experience of dining out with Dana Todd and some of her close friends.  I found myself sitting at a table having wine and dessert with Dana, Jessie Stricchiola and Anne Kennedy. Yes, I felt completely out of my league. Newbie angel wins.

The evening ended with more drinks at the hotel bar where I got some great advice on speaking on a morning SES panel from Dave Williams (don’t drink coffee or you’ll talk too fast) and finally got an opportunity to introduce myself to Chris Boggs whose company I actually work for (freelance). I know I’m name dropping. I don’t care. (newbie angel wins…again)

It was almost anticlimactic that I got my chance to speak at SES, finally, after all those years, on Friday the 13th. Half the attendees had left on Thursday, the exhibit hall had been torn down and it was the first session in the morning. I kid you not when I say no more than 50 people attended, I was the first to speak after the moderator, Sara Holoubeck, and I think my slides missed the mark (the topic was “Ad Agencies: Understanding the Search Difference”)

I should’ve talked about how I love search, how being a search marketer has changed my life, by giving me financial independence and putting me on an amazing career track, but also by allowing me to flex my writing muscles time and time again. And, oh, the people I’ve met!

But instead I gave a short intro about my background that mostly read like a resume and scurried to my seat at the panel in terror (Newbie angel wins). But when it came time for Q&A, I decided to forget my fear and talk about what I know including exactly how I think a campaign should be managed, if one is to manage it correctly (jaded angel with big ego wins).

So now, as I sit here marveling at the sheer length of this post and trying to suppress a new, rising feeling of excitement about the industry, I can’t help but wonder what Search Engine Strategies will be like seven years from now when SES is a two-week long conference with 500 sessions and the whole event is owned by Google (jaded angel take a bow). Looking back is fun and amazing, looking forward is scary and uncertain. In any case, I hope I’m still along for the ride.

By the way, I almost didn’t go to that luncheon event because of the pouring rain, but Dana Todd leant me her umbrella and told me that she couldn’t believe there was anyone in search marketing who wasn’t adventerous. Dana, it was the newbie angel who almost made me miss that amazing event, I swear!!

Add comment April 15th, 2007 Jackie

Google Acquires Doubleclick? Holy Crap!

It’s the Saturday after Search Engine Strategies New York and for two seconds it actually felt like I was caught up on all the hot search news. Hell, I wasn’t even going to read the blogs, forums, news alerts or even look at my favorite Internet Marketing E-Zines which piled up last week. Still, I couldn’t resist taking a quick peek on Search Engine Land where I saw this post titled “Google Acquires Doubleclick for 3.1 Billion.” My reaction? Whhhaaaaaaaaaaaaaaat??

What could this mean? Google now owns one of the largest online ad networks in the universe, one of the industry-standard bid management tools and, well, Performics. It’s official, Google is a media company.

Add comment April 14th, 2007 Jackie

Useful Search Marketing Statistics

The Basics

• The share of searches performed in the US as of July 2006: Google 49.2%, Yahoo 23.8%, MSN 9.6%, AOL 6.3% and Ask 2.6%.
  Source: Searchenginewatch.com/Nielsen Netratings 

Response Rate by Position

• The top three organic listings are viewed 100% of the time, with lower positioned listings getting incrementally less attention as follows: rank 4 (85%), rank 5 (60%) rank 6 & 7 (50%), rank 8 and 9 (30%), rank 10 (10%).
  Source: Eyetools, Enquiro & Did-it.com Eyetracking Study.
• The top paid search listing is viewed 50% of the time, with lower positioned listings getting incrementally less attention as follows: rank 2 (40%), rank 3 (30%), rank 4 (20%), rank 5-8 (10%)
  Source: Eyetools, Enquiro & Did-it.com Eyetracking Study.

Conversion Rates for Paid v.s Organic Search Listings

• Conversion rates for paid vs. organic listings are nearly identical, with B-to-C conversion rates for paid search at about 3.40% vers 3.13% for organic search results.

The Retail Channel

• 25% of conversions occurring from users who click on more than one ad
• Branded search offer the highest conversion rate (9.3%) occurring when a user’s first and last click resulted on searching for a branded term. 
• When the first click was the result of a nonbranded search and the last click on a branded search, the conversion rate was slightly lower at 8.73%.
• For searchers who began their search using a nonbranded term, but ended with a branded query, conversion rates were seven times higher than when they used only nonbranded terms.
• Only 8.4% of searchers used multiple unique keywords, but they accounted for nearly 20% of transactions.
  Source: 360i and SearchIgnite

Market Growth for Paid Search

• The average number of active keywords in Q1 2006 was up 36% compared with Q1 2005
• The total number of clicks to paid search ads rose 24%
• Sales from paid search ads increased by 72%, as measured in dollars
  During the December 2005 holiday season, nearly 30% of clicks came from keywords costing .50 per click or more, but that proportion dropped to 20% in March 2006
  Source: Doubleclick Performics 50 Search Trend Report Q1 2006
• Search spend increased by 44% from 2004 to 2005, with advertisers spending 5.75 billion in search in 2005 and 64% from 2005 to 2006 (or 9.45 billion) (Source: SEMPO)
• In 2006, SEM programs were primarily funded by shifting budgets from offline media including print magazines (20%), Direct mail (16%), TV advertising (13%), newspaper advertising (13%) (Source: SEMPO)

Add comment March 10th, 2007 Jackie

What is Google’s Content Network?

I get this question a lot and so I decided to blog it. After all, my clients can’t be the only ones who are wondering.

<====================>

The content network is part of Google’s network of sites that display Google ads unrelated to keywords. The ads show up beside content that is contextually relevant to the keywords you’re bidding on. You can enable content-targeting at the campaign level (as opposed to the Ad Group level) and you still pay per click. There are often many more impressions (times your ads show up) when you implement content-targeting, but the clickthrough rates are usually much lower because it’s a more passive type of advertising than keyword search.  Here is a link to Google’s help page which summarizes the content network and gives examples of some of the sites that are displaying Google ads:

https://adwords.google.com/select/afc.html

And here is an example of a Web page that is displaying Google ads (note the ads at the left of the page beneath the link that says “Ads by Google”):

http://www.wikipregnancy.com

Yahoo and MSN both offer versions of content-targeting, but Google’s network seems to be the most comprehensive. It’s important to test the performance of content-targeted ads because some categories can literally rack up millions of impressions in mere weeks, which translate into thousands or tens of thousands of clicks and can become very expensive. These ads generally don’t convert as well as keyword ads, so if you’re managing a campaign to a specific ROI goal or CPA, content-targeting may blow your performance out of the water (in a bad way).

Add comment March 1st, 2007 Jackie

The Power of Search and Breastfeeding

What does search  marketing have to do with breastfeeding?

I’m glad you asked! A popular search marketing blogger, Jennifer Laycock, is the editor of Search Engine Guide, but also maintains a breastfeeding blog called The Lactivitist. Apparently she’s been selling t-shirts featuring a slightly revised version of the slogan, “The Other White Meat” which has gotten the pork folks all upset. They sent this work-from-home mom who is promoting the value of breastfeeding a threatening, lawyerly letter. This is riduculous, and you can read the sordid details on The Lactivist right….here.

Why am I even mentioning this? Well, because I want to lend my support as a fellow female search marketer and former breastfeeding mom (with child #1, anyway). I also love, love LOVe how great this entire situation exemplifies the power of search marketing and the blogging community online - and i’m not even an active member of this particular blogging community. I’m just someone with a Web site who can contribute a measly little link, that when combined with lots of other links from blogs - large and small - will most certainly have the National Pork Board deeply regretting its decision to pick on someone who knows a thing or two about search marketing.

By the way, Back off National Pork Board.

Add comment February 2nd, 2007 Jackie

SEMPO Introduces the new SEMPO Institute

The Search Engine Marketing Professionals Organization (SEMPO) (of which I am a member) opened its cyber doors to the SEMPO Institute yesterday with an online course on search engine fundamentals.

Just about anyone is eligible to enroll which can be done at the SEMPO Web site right HERE. There are currently two course - SEM Fundamentals which is ready to accept students now and SEM Advanced. The advanced course will be released in the spring.

I’m proud to say that I wrote a module for this course (check me out in the list of SEMPO Institute Authors, Executive Team & Contributors) here. My Lesson is on Search Branding and Campaign Integration, but authors are not being listed with the actual courses they wrote because the entire project is a collaborative effort. Still, couldn’t resist plugging my module on my own blog now could I??

Danny Sullivan’s Blog, Search Engine Land, has a nice concise list of what’s included in the Fundamentals Course. Good stuff.

Add comment January 24th, 2007 Jackie

Search Industry Predictions for 2007

I’m not one to make big sweeping predictions, mostly because I’m often buried to the eyeballs with work and just trying to muddle through it all. However, in the name of refreshing my blog’s content (one of my 2007 New Year’s Resolutions) and in light of the fact that 2006 was a great year for the search marketing industry, I’ve decided to make an exception.

Full disclosure: My predictions for search marketing in 2007 will be highly influenced by my own involvement with search. Thus, I do not deny that there is more than a little bit of ego involved in the following list. Can I help it? I can’t resist the self-fulfilling prophecy style of annual predictions, particularly when I stand to benefit by being fully in the thick of things.

So, without further ado, here are my search marketing predictions for 2007.

1. Relevancy makes a comeback. Okay, so maybe relevancy with regards to great search marketing never went away, but I’ll tell you this, I’ve seen many advertisers spending scads of money on SEO and paid search without spending any time ensuring their web site is relevant to the keywords they’re bidding on.  I’m not talking about adding articles and product information to your web site, though that is important of course. I’m talking about customizing your landing pages so that they are relevant to your ad copy and the keywords you’re bidding on. I’m talking about bidding on keywords that actually make you money and deleting keywords that don’t, even if you really love them. Even if your CEO wants to see his company come up for “blue widgets” when all you sell on the Web site are the green ones. I’m talking about actually reviewing the ads you created for Google three years ago and see which ones work (if any) and which ones are sabatoging your campaign.  2007 is going to be the year of relevant and great and (did I say?) relevant content. 
2. Search is used as a branding tool. Okay, well so much for relevancy. I do believe that relevancy in the form of campaign optimization will be a huge trend throughout 2007, but I also believe search will be leveraged for branding purposes more than ever this year. I’m not so sure that’s a good thing. I do so love relevancy.
3. Searchers Look Beyond Google. The most exciting prediction for 2007 (in my opinion) are the sites, old and new, that encroach on Google’s current domination of search. I’m not just talking about Yahoo, MSN and AOL. I’m talking about sites like eBay, Amazon, Shopping.com, Business.com, Craig’s List, CitySearch, Realtor.com, Rentals.com, Expedia, CheapTickets, RottenTomatoes (movie reviews), and just about any web site that focuses on one specific industry sector or topic AND that people use as a starting point for search (as opposed to always starting at Google or another popular search engine). I think this is a sign that use of the Web is maturing because they now realize they have more than one resource to find information. It’s also an aspect of Web 2.0 - that is, new and emerging companies, business models and technologies are springing up every day to meet the needs of searchers.
4. Keyword costs will skyrocket. Without even quoting any statistics, I can tell you this will be an ongoing and escalating issue in 2007. The very nature of Google’s Quality Score index, plus Yahoo’s new platform which supposedly  mimics the Quality Score concept will cause the price of keywords to go up notwithstanding increasing competition as more and more advertisers move their media dollars into paid search.
5. Search Marketing will kick all other tactics’ ass. Not exactly demure of me to word it like this, but the point is not that search marketing is, will be and always was one of the most effective forms of reaching consumers and driving sales – EVER – but that marketing managers, CEO’s, COO’s and grizzled old ad execs will finally, finally, FINALLY  realize the truth of this and (for heaven’s sake) start integrating search into their overall media mix in a way that doesn’t force them to defer to the one computer geek in the company who always gets stuck redoing the web site and figuring out how to retrieve someone’s deleted in box.

There’s so much more to say, but I’ll end here or I’ll never get this posted.

Add comment January 12th, 2007 Jackie