Congrats! You’re A Winner At The Game Of Paid Search

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Paid search is a game.  Unfortunately, it is a game where the rules constantly change, players regularly come and go, and slam-dunk strategies are typically fleeting.  Furthermore, the players do not start with the same set of tools: some have large budgets or a lengthy history of clicks; others have dedicated representatives and access to beta products.  The biggest players are armed with large teams, software, and algorithms.  No one said it was a fair game.  Nonetheless, at any given time, the rules are set, the competitors are in place, and the opportunity to succeed is present.

The best part of the paid search game is that everybody can win.  Conceivably, every advertiser could profit.  In reality, the Game is too competitive for everyone to win.  Day in and day out, there are big winners and big losers and players who struggle to break even.  Winning is about continually finding effective strategies for an ever-changing landscape.

1.  Collusion

One strategy to win at paid search is to combine forces and fight the Game itself.  The Game is defined by competition.  Without intense competition from advertisers for a given keyword, Google’s profits would plummet.  If all advertisers targeting “purchase structured settlements” (currently around $70 per click) agreed to cap their bid at $1.00, all of the advertisers would be better off – leaving only Google to suffer lost profits.

The same holds true for all targeted keywords.  If every major marketing company in the US agreed to cap their paid search bids, every player in the Game would be better off.  Regrettably, the players are humans and fighting to win is better than risking one player hording the profits – essentially the Prisoner’s Dilemma played out on Google search 35,000 times per second.

If collusion is a viable option, it is by far the best strategy to the Game.  If you have a small enough niche of advertisers targeting your keywords, consider scheduling a conference call, hash out the details, and join forces to keep bids artificially low and profits high.

2.  Divide & Conquer

As with any game of Monopoly or Risk, collusion is destined to fail.  The capitalistic impulse is far too strong for marketers (whose salaries hang in the balance) to restrain themselves.  Sooner or later, someone is going to depart from the agreed upon bids because it will make her company money in the short run.

Once the Game is clearly a free-for-all, you need to identify where you can be most successful.  Most advertisers can target an array of relevant keywords.  For example, the aforementioned advertiser targeting structured settlements could be targeting a laundry list of terms from insurance settlement to financial agreement to tiered payments.  All of these queries could lead to potential customers and sales, but many may not be profitable.  Winning the Game is about identifying the strategies that work and setting aside or abandoning the strategies that have a history of failure.

If your top volume, most relevant keyword is too expensive on Google, stop targeting it.  If bidding to a top 3 position loses money, stop.  Focus your efforts on improving the strategies that have shown success.  What are your top ten keywords in terms of ROI?  What is your impression share for those keywords?  Doesn’t increasing your impression share for your top keywords outweigh losing impressions for non-converting or expensive keywords?

Although allocating the bulk of your budget to keywords that drive sales is clearly an effective strategy, too many advertisers target broad campaigns out of fear of missing out on potential customers.  In paid search advertising, you go to war with the monthly budget you have, not the budget you want.  Use it on keywords that are going to lead to sales.

3.  Counter Attack

As mentioned previously, the game of paid search is not a stagnant affair.  Search engines are constantly changing the rules, and competitors are constantly changing their strategies.  In order to win the Game, advertisers must have a counter attack for the moves made by search engines and competitors.

Google is by far the greatest rule changer of the search engines.  The company is constantly releasing products for competitors to utilize in their paid search strategies.  The best way to retaliate against competitors’ use of new products is to preemptively strike.  If you don’t have dedicated AdWords and adCenter reps, pursue them.  Once you are working with dedicated reps, regularly ask about new products and the opportunity to join beta programs.

Beta testing new products provides significant advantages: you gain valuable experience with the product and you can capitalize on the period before the product is released to all advertisers.  For example, in late 2009, Google began testing Sitelinks in AdText.  Google rewarded advertisers who took part in the Sitelinks beta with 4 extra, highly visible links, simultaneously increasing clickthrough rate and lowering cost-per-click – talk about an advantage.

4.  Have Fun

All-in-all, winning at paid search is about enjoying the Game.  Whether it is spying on competitor ads or running statistical analysis to determine your maximum ROI, strong players in the paid search game enjoy what they are doing.  Most everyone enjoys winning, but to win you have to enjoy playing the Game too.

About the Author

Mike has worked in the online marketing industry since 2005. Mike started Obility Consulting in 2011. Obility works with b2b companies looking to lower customer acquisition costs through improved performance in paid search and conversion optimization. Please visit obilityconsulting.com to learn more about Mike or Obility.

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