November 2014

10- Nov2014
Posted By: DPadmin
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P&G Shifts Marketing Dollars to Online, Mobile

Procter & Gamble Co. is now spending more than a third of its U.S. marketing budget on digital media, an aggressive shift as Americans for the first time are expected to spend more time online this year than watching television.

P&G chief executive A.G. Lafley said the consumer products giant’s digital spending on things like online ads and social media ranges from 25% to 35% of its marketing budget and is currently near the top of that range in the U.S., its biggest market. That is well beyond the estimated 20%…

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10- Nov2014
Posted By: DPadmin
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My Grand Experiment: Turning Off AdWords

As I explained in my last post, I recently found myself with a surprising new problem: all the work we can handle. Because our backlog of orders is as high as I want it to be, I decided to take the opportunity to run an experiment: What would happen if I stopped running Google AdWords?

I have been spending $500 per day on sponsored search, and I believe the results have been well worth the money: $1.8 million in sales as of this morning. But I also believe this is a rare opportunity to see whether AdWords is doing the heavy lifting in our marketing or whether our search engine optimization efforts are yielding results as well.

In January, I started keeping track of the number of inquiries we get each day. The most we have received in a single day has been seven, which has happened three times. There have been 11 days when we received no inquiries. The daily average is 2.65. The weekly number has ranged from eight to 22, with an average of 13.5. So far this year, we have had a total of 569 inquiries.

My own prediction is that our number of inquiries will fall below average, and I would be surprised if it’s not a significant drop. If the number remains close to the average, it would imply that I could be spending a lot less on AdWords than I am now (here’s a previous post I wrote about my experiences with AdWords). I can’t tell you how many times I’ve heard from so-called S.E.O. experts that there is no need to pay for traffic, that I could just run a good S.E.O. campaign and the inquiries would come for free. The experts imply that people tend to ignore the paid links at the top of the page, in favor of the free links further down. I am deeply, deeply skeptical about this. And that’s why I’m running the test, starting today.

2:41 p.m.: We get a call from a furniture dealer in Tampa who is looking for a table with a logo. He says he was told to call us by a client who went to Google to look for tables with logos. He couldn’t remember whether the client had searched this week or not. Out of curiosity, I checked the search string “logo conference table.” We are the fourth and fifth free listings. Nos. 1 and 2 are competitors, and the third is an irrelevant result. Score one for S.E.O.

5:30 p.m. No other calls today.

Total for Monday: one inquiry.

Tuesday, October 25, 8:45 a.m.: I find an e-mail from a potential client who submitted our Request For Info form through the Web site at 8:35 the previous evening. He’s looking for a 12-foot square conference table. I search Google for “square conference table” (using Safari) to see where we land, and our “square and u-shaped tables” page is the eighth free listing on the first page of results. I’m loving the preview feature that Google has added to its results pages — to the right of each result is a gray arrow. Roll your mouse over it, and you see the whole page that the link points to. It’s a fast way to see what you are getting into before you click a link.

My salesman, Don, follows up with the potential client by e-mail. It turns out it’s a monastery where the monks have taken a vow of silence; the client requests that we not communicate by phone. Also in my in box this morning is an e-mail from a guy who wants me to convert a walnut tree in his backyard into a dining set. This most likely came through our old Web site, which listed lots of dining furniture. I send him an e-mail with a link to a lumber dealer who can evaluate the condition of the tree for him and give him the news that it takes several years to process the lumber before anything can be made from it.

5:30: No more calls or e-mails, and it’s time to go home.

Total for Tuesday: two inquiries. Week to date: three.

Wednesday, October 26, 9:39 a.m.: Incoming phone call from a local seminary. (Hmmm. The second inquiry this week from a religious organization.) The seminary is looking for a U-shaped table. The caller says he searched Google and found our site. I tried a search for “u shaped conference table” (using Chrome) and found that we were the top free listing.

5:30: No other action. Calling it a day.

Total for Wednesday: one inquiry. Week to date: four.

Thursday, October 27, 3:56 p.m.: An e-mail arrives from a possible client. I call her and learn that she searched “conference tables,” which returned a bunch of cheap-looking stuff she didn’t like. Seeing the suggested search string listing at the bottom of the page, she clicked on “custom conference tables” and found us. We are the top free listing for that search. When I first designed the new site, I imagined that “custom conference tables” would be a very heavily searched phrase, but our search stats reveal that “boardroom tables” gets more than 100 times as much traffic. I have since added a landing page to the site that specifically shows boardroom tables. This shows up near the top of the second page of free results. We do extremely well with “custom boardroom tables” — it’s the first free result — but unfortunately it gets less than 1 percent of the traffic that “boardroom tables” gets.

Total for Thursday: one inquiry. Week to date: five.

Friday, October 28, 2:30 p.m.: I have been out of the shop most of the day. My lead salesman, Nathan, who is back in the office after working a couple of weeks on the shop floor, reports that there have been no new inquiries.

4:32 p.m.: I’m alone in the office now, and the phone is extremely unlikely to ring this late on a Friday, so I declare the experiment over. As I expected, turning off our AdWords program has led to a big decrease in inquiries. Only five for the week — well below our previous low of eight calls and way below the average of 13.5.

I take a look at Google Analytics to see the raw traffic numbers. Comparing this week to last, I find that the number of visits from AdWords has declined 97.5 percent, from 316 to eight (where did those eight come from?).

My conclusion: If I stop paying, I stop getting clicks.

What is surprising to me is the steep drop in organic visits, the clicks from free links. They have fallen 47 percent, from 328 to 173. Stopping the AdWords payments seems to have affected unpaid traffic as well. According to everything I’ve been told about search engine optimization, this shouldn’t have happened. But from a business standpoint, it makes sense to me. Google is in business to make money by selling searches. Why shouldn’t it boost the free listings of its paying customers — and degrade the results when they stop paying? It’s also possible that people are more inclined to click on free results when they see the same company has the top paid link. Maybe it’s conscious, maybe it’s not. I’d be interested to hear any theories readers may have as to why my organic traffic took such a fall.

In any case, I’m not willing to continue this experiment. The amount of money saved, $2,000, is peanuts compared to our average weekly sales, $42,242. I am perfectly happy to put 5 percent of our revenue toward advertising. So as my last act of the day, I unpause my campaigns. I’m looking forward to hearing the phone ring again.

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10- Nov2014
Posted By: DPadmin
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Seven Ways to Make Pay-Per-Click Pay

Among web marketers, it is the big debate: SEM versus SEO. Sound like just a bunch of letters to you?

If you owned a web site, you wouldn’t think so. SEO stands for search engine optimization, a process that seeks to boost a site’s traffic by helping it rise within a search engine’s organic, or un-paid, search results. It is often seen as the Holy Grail for Internet marketers, as people tend to click those links over their paid counterparts. However, the conversion rate—that is, the number of shoppers that turn from browsers to buyers—tends to be lower in…

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10- Nov2014
Posted By: DPadmin
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The Actual Impact of PPC on Sales

 

Everyone knows that PPC helps to increase sales. After all, PPC almost always drives incremental traffic to a website and some of those visitors are likely to convert. Much was made of Google’s 2011 Search Ads Pause study, which showed that 89 percent of site visits were incremental to organic results.

It’s important to keep in mind, though, that Google’s study focused on site visits, not sales. Most assume that more visits mean more sales and that fewer visits mean fewer sales. However, not all visits are created equal.

This case study illustrates the true value of PPC visits.

The Situation

The advertiser in this study is a B2B ecommerce advertiser. Let’s say they sell widgets to businesses via their website. The advertiser recently launched a new site and wanted to test using PPC to boost sales. The test lasted 10 weeks.

Before we jump into details, let’s revisit the current search landscape. Here’s a good example of an ecommerce SERP. The product isn’t what the advertiser in this case sells, but it’s a good approximation of what their SERPs look like.

serps

About 80 percent of screen real estate above the fold is dedicated to ads, including shopping results from numerous competitors. Let’s face it – this is not an easy space to play in for any ecommerce advertiser. Multiple sellers often sell the same thing, frequently at different prices. PPC is almost a must in order to appear above the fold.

During the test, the advertiser bid on brand and non-brand terms. While brand terms usually perform better than non-brand, it’s important to bid on brand terms anyway, especially in a competitive ecommerce environment where competitors may be bidding on your brand name.

So what did results look like?

Both Traffic and Sales Increased

With PPC, site visits increased by 17 percent. No surprise there.

The surprising fact was that sales increased by a whopping 136 percent with PPC.

mmtrafficandsales

Now, this data is for all visitors & sales, not just those from PPC. One may think that the increase came from other channels, as well as from PPC. In this case, the advertiser was indeed doing other marketing. Few marketers use only one advertising channel at any given time.

This is where attribution comes in.

Attribution, in a nutshell, is data that shows all the channels a customer used to access your website before making a purchase. B2B buyers, in particular, frequently make multiple visits to a website before purchasing. They might find out about you from a PPC ad and browse, but not buy. They might return later from an organic search and sign up for your e-newsletter, and then return to buy via an email. That’s three touches from three different channels.

PPC often influences other marketing. It’s frequently the impetus that gets potential buyers’ attention.

Buyers Touched by PPC Were More Valuable Than Those Not Touched by PPC

Because attribution is so important, we analyzed it for this advertiser. We found that purchases that were touched at some point by PPC had a 21 percent higher average sale than those not influenced by PPC.

averagesalemmdec

Clearly, using PPC resulted in higher-value orders in this case. When analyzing the impact of PPC, it’s important to look not only at total conversions, but conversion value as well. You may find that PPC is driving more valuable customers than other channels.

At the end of the test, the advertiser turned off their PPC campaigns to evaluate the results of the test and reassess their overall marketing strategy. The results after the shutdown of PPC are telling.

Interestingly, total site visitors held steady after PPC was paused. There could be many reasons for this: perhaps PPC increased awareness and people sought out the site from other channels. Those searching on brand names likely came to the site from organic listings. Seasonality could also play a role.

With visitors holding steady, one may assume that sales held steady, also. Not so.

Sales Dropped When PPC was Paused

Both total orders and conversion rate fell off when PPC was paused.

mmsalespostpause

That’s right: both online orders and buyers per visitor (conversion rate) fell by 23 percent when PPC was paused, even though total visitors stayed the same.

Why?

If a visitor is a visitor, regardless of source, why did sales fall off? Shouldn’t we assume that traffic would decrease when PPC stops, and if it doesn’t, that sales would hold steady?

No.

The reason for the decrease in sales boils down to conversion rate. If you look closely at the chart above, you’ll notice that overall conversion rates on the website were very low – below 1 percent. Let’s take a deeper look at conversion rate by source.

mmconversionrate

That picture tells the whole story, really. PPC conversion rate was 2.25 percent, so it wasn’t bad, although for ecommerce it could have been better, but the conversion rate on the rest of the traffic was barely above 0.50 percent. More than 99 out of 100 non-PPC visitors did not purchase. PPC traffic converted 3.5 times better than non-PPC traffic. There’s the impact of PPC.

Takeaways

So what can we learn from this test?

  • The ecommerce SERPs are dominated by paid placements, so PPC is important.
  • PPC can increase site visitors, but more importantly, increase sales.
  • PPC visitors are more valuable than non-PPC visitors from a revenue-per-sale standpoint.
  • PPC visitors convert better.

Have you tried pausing PPC ads to gauge the impact on visitors and sales? What happened? Share in the comments!

 

 

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