How Expensive PPC Advertising May Payout For Keyword Testing

by Randy Pickard · 39 comments



ppc keyword research fight

It's a cat fight... Which side are you on?

A recent Traffic Generation Cafe post prompted me to try and come up with a case for Pay Per Click (PPC) advertising.

Although I have to admit that the suggestion to avoid buying traffic in 5 Traffic Generation Strategies I Stay Away From is sound advice for most blogs, it’s not always the case.

Having spent a huge portion of the last decade working on PPC campaigns, I am now frustrated to see how difficult it is for me to put all my knowledge to good use due to bid inflation. As a matter of fact, So much dumb money is being wasted on PPC spending that this tactic is scorned by scores of SEO and blogging veterans and abandoned by many of its early and smartest adopters.

However, after reviewing why PPC has become so expensive, I found its best value in keyword testing.

Making PPC Viable

PPC remains a tool that can be useful to determine keywords that perform well.

It is particularly helpful in differentiating the opportunity presented by SEO and social media campaigns focused on short, broad phrases versus long tail terms. Keyword research by itself typically only yields information on searches and impressions.

PPC reports provided by the vendors offer more detailed impression data than keyword research. The reporting also provides results on the terms that actually generate clicks, and information on user behavior and conversion rates following the clicks upon specific terms.

This can be terrifically helpful in defining whether keyword optimization efforts should be focused upon a category term or upon a subgroup within a category.

Google Keyword Tool vs PPC Campaign Results

Research around keywords for a new site that we are developing, Shopping Baskets Plus, provides a good example of how PPC can eliminate keyword opportunities.

Utilizing Google’s keyword tool shows that “shopping baskets” receive 3.5 times at many searches as “plastic shopping baskets”. Thus, initially we thought we should optimize for the term shopping baskets.

ppc keyword research image

However, conducting PPC testing on these two terms provided evidence that “plastic shopping baskets” produces more clicks, as well as visitors that view more webpages on the site.

While the results are not definitive as the numbers are small, based on this research, we are focusing our efforts on optimizing on the three-word term “plastic shopping baskets” instead of just upon “shopping baskets”.

ppc keyword difference

PPC is also useful for narrowing down large lists of keywords and determining the best candidates for optimization efforts. The reporting tools make it easy to segment out the keyword terms that are producing clicks and offer the best opportunities for driving traffic to your blog.

A Word on Match Type

The capability to adjust the match type of keyword terms on a PPC campaign also provides useful information.

Comparing the number of impressions and clicks a keyword term receives depending on whether it is set to broad, phrase or exact match can define the potential of long tail versus broad terms.

However, be cautious about utilizing broad match. Broad match is useful early on for keyword phrase discovery, but on an ongoing basis is practically an open invitation to get stuck paying for traffic from searches on marginally relevant terms.

For ongoing campaigns, I typically either use phrase match exclusively, or a combination of phrase match and exact match. If using both phrase and exact match, bid higher for the exact match term by at least a penny, otherwise the phrase match will sometimes be served even for exact match queries.

As an example, the term “shopping baskets” set to broad match generates traffic from visitors searching for “shopping carts” - a product we don’t sell. Setting the match type to “phrase” delivers desirable visitors that are searching for terms like “shopping basket with handles”.

Exact match only delivers visitors imputing “shopping baskets” into the search box.

Marketing Takeaway

In many cases, it can be difficult for a blog or website publisher to justify the cost and effort of a PPC campaign.

But don’t write off PPC entirely. It still can be a productive tactic when utilized strategically.

In particular, the quick learning about keyword optimization for a new product or service with high margins can provide a positive ROI.

A Note From Ana

I am definitely not a PPC expert of any kind. The only thing I DO know about PPC is the fact that you’d better know what you are doing before diving into it.

Randy had a valid point when he approached me about writing a guest post on this topic, and I thought it was only fair to give you a chance to see the other side of the coin.

Bottom line for me: I agree with Randy on the validity of PPC as a keyword research tool, SPECIFICALLY for narrow niche blogs that are designed with one goal in mind - to make money.

Since Traffic Generation Cafe is not one of those blogs, I choose to remain in blissful ignorance regarding this tactic and keep my money while at it. :)

A Note From Alex Whalley

(to spruce things up, I decided to ask for a second (or is it third?) opinion - from a keyword research King, Alex Whalley)

I am with Ana on this one and have never actually delved into the Paid Traffic strategies, but as an avid abuser of keyword research tools and services, I can definitely see the validity of using the information to further define your own organic traffic campaign.

The thing about Keyword Research is that, as Randy pointed out – you are only really getting the big picture, and unless you really understand the niche you are approaching, or you are just lucky when choosing which keywords to optimize for, you are going to waste a lot of time and energy getting ranked for phrases that either don’t convert or are simply not as relevant to your target audience as you initially assumed.

I would also add that, like Ana I have no intention of utilising PPC on my own blog since the niche is too broad (and the competition too insane). I would however consider it on any one of my product specific niche sites.

Build | Rank | Profit. Alex Whalley’s Niche Site Marketing Blog.

QUESTION FOR YOU: Do you see the validity of PPC for the specific task of keyword research or is it a dying breed in your book? Are you still successful with PPC and do you intend to continue using it?




{ 38 comments… read them below or add one }

Ellen from Small Business Marketing July 3, 2011 at 11:13 pm

You describe a nice view in good manner. I am getting information on starting a PPC campaign. But I first I want to know its draw backs. Today I came to know that it is really a different task to start a PPC campaign without any proper assistance. Otherwise Google will eat me.

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seph from mobile advertising January 27, 2011 at 10:10 pm

It depends on you,because so much dumb money is being wasted on PPC spending that this tactic is it is scorned by scores of SEO and blogging veterans.

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Perry Yu January 8, 2011 at 2:17 pm

@ ANA , Google PPC is tough for newbies . & great post!

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Ana January 8, 2011 at 9:55 pm

I know, that’s why I stay away from it! :)

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Amr Boghdady January 8, 2011 at 1:03 pm

Good article Randy!
I’ve never thought of the idea of using PPC in such way before, although I’m sure I’ll be doing a few campaigns in the very near future, as Google Keywords Research is showing very low competition for the keywords I would love to target, and a low Avg. PPC cost as well.

Thumbs up to Alex & Ana for contributing to the article with their notes
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Randy Pickard January 8, 2011 at 3:50 pm

Amr - Congratulations on targeting a niche where PPC still offers an opportunity to be profitable. Good luck
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Mobile Application Developer January 5, 2011 at 12:24 pm

First I thank you for written a awesome article on PPC.PPc is benefit for our website.It is true or not and one more thing is PPC campaign is expensive.What I do?Tell me Ana

I hope you reply me

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Ana January 5, 2011 at 9:40 pm

PPC can definitely still benefit some niche websites like yours seems to be. If you can manage to keep your costs down and are getting a reasonable amount of traffic that leads to sales, I would advise to continue doing it.

Hope this answered your question!

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Create Facebook Application January 6, 2011 at 12:23 am

Recently My website traffic going down and down.After that I increase my PPC Campaign around $5000 per month.It’s ok Ana

Thax Ana
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Alex January 5, 2011 at 12:14 pm

PPC can be something that bring you lots of happiness and sales if used right, but it can also be a wallet thinning exercise if you don’t know how to use it right. I know that ppc can drain your money like there is no tomorrow (especially AdWords), and if your ROI is low you can find yourself in a hole.

I recently bought an ebook that talks about StumbleUpon PPC and it’s great conversion rates (for websites that promote affiliate products). What do you think of social media PPC ? Is it better then google. I heard lots about facebook ads and such.
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Randy Pickard January 5, 2011 at 12:36 pm

Alex - I tried a small campaign on Facebook for a client. The initial results were not not very promising, but the client pulled the plug to soon to really learn much about advertising effectiveness on Facebook.
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Mavis Nong January 5, 2011 at 7:21 am

Hi Randy,

Great information here. PPC can be intimidating and costly if you don’t know what you’re doing.

I love your tips on how we can use this strategy to drill down on keyword research - very good.

Thanks for sharing.

Mavis
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Randy Pickard January 5, 2011 at 9:57 am

Mavis - Hope the tips are useful if you give iPPC a test
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mark January 5, 2011 at 6:27 am

Hi Randy,

I am glad you wrote this here.

I have wondered if there was something that could help to cover the lack of info regarding conversion in google’s keyword tool. PPC is something that I had wondered about for this and micro niche sites, but could never get started as I could never find information on using it in this way that I could understand.

Very nice post. Thanks!
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Randy Pickard January 5, 2011 at 6:54 am

Mark -A quick and dirty analysis of whether PPC pays out is fairly straightforward. If each click costs $0.50, and 5% of visitors purchase my product of service, and the net margin per sale is $10, then break even has been achieved. For a new product of service that is just been launched, trading dollars may be a good strategy. However, the ROI calculations become much trickier once lead attribution and lifetime value consideration are factored into the equation. The PPC reporting tools report whole numbers for conversions per keyword and ads, but there may have been other clicks that contributed to the sale. And justifying a money losing sale based on the lifetime value of a new customer can lead to cash flow problems.
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Dennis Edell January 5, 2011 at 6:05 am

Excellent points. I never would have thought it, since I really don’t get KW research to begin with.

Personally, I’ll stick to free methods for blogging and leave the paid avenues to product sales; it’s my understanding that is what it is best for.
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Randy Pickard January 5, 2011 at 7:02 am

Dennis - Agreed. PPC is not for everyone, particularly if you have productive methods of driving traffic to your blog or website.
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Deck January 5, 2011 at 12:15 am

Hey Randy,

Interested post man. Some great points on PPC Advertising. I really like the notes from Ana & Alex!

Great work. Thanks for sharing.
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Jared Holland January 4, 2011 at 11:29 pm

I have used PPC in the past and actually made a lot of money in a short period of time from it. I don’t recommend playing that game everyday though, it can be stressful and time consuming.

I’ll stick with writing awesome articles that the search engines will eat up.

Great guest post!
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Randy Pickard January 5, 2011 at 9:58 am

Jared - Congrats on your success with PPC and also for being wise enough to take the money and run.
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greg urbano January 4, 2011 at 4:42 pm

although i do not plan a large ppc campaign anytime soon i found your information usefull at a different level pertaining just to keyword choices, thanks for the info
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Randy Pickard January 4, 2011 at 6:52 pm

Greg-glad you found the guest post informative.
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Alex January 4, 2011 at 3:00 pm

Excellent article Randy!
When Ana sent it over I was very impressed by both the information and the style in which it was shared.
Before I go on, Ana - thanks so much for allowing me to contribute to an already impressive article.

I think what this post does is highlight the validity AND importance of using paid keyword research tools and services as they provide so much more detailed information about the commercial viability of a particular keyword or phrase.

Thanks again Ana, and Randy - excellent.
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Peter Fuller January 4, 2011 at 1:59 pm

Hey Randy and Ana

Running short-term PPC campaigns to determine if a keyword is a money one is a great idea.

Sure it costs, but how much would it have cost you in the long run if you optimized for “shopping baskets” instead.

Peter
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Randy Pickard January 4, 2011 at 2:22 pm

Peter-Good question. It’s a new site so too early to tell about Google. But on Bing, the site is on the first page for both “plastic shopping baskets” and “shopping baskets”. So adding “plastic” probably expanded the number of searches that we appear for.
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Sheila Atwood January 4, 2011 at 1:59 pm

James,

I was scared off early from doing PPC for my blog and niche sites. Too many people loosing big. My interest has peeked again because of the low cost for PPC on cell phones. It is something I have not researched. Have you?
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Randy Pickard January 4, 2011 at 2:27 pm

Sheila-Just dipped my toe in the water on mobile PPC. Haven’t learned enoough offer suggestions. Good luck. If you test, I would be interested in learning the results.
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Kerry Thomas January 4, 2011 at 1:34 pm

Great discussion on PPC. I only use PPC now as a testing method for the conversion rate for my website designs. I also only run short campaigns (24hrs usually) that provide enough data for Google to generate a report.

As for keywords, to be honest by the time I have the keywords to run my ads then I usually have enough data to help me decide what my target keywords are for my website’s organic search optimization efforts.

PPC is something that I do try to avoid in longterm marketing efforts. Google really can rake you over the coals if you try to advertise affiliate links and sites. (Probably because they have their own Google affiliate network now)
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Jordan Schultz January 4, 2011 at 8:59 am

Ana,

Very interesting post coming from you. It’s an interesting way to exact your keyword research.

Jordan Schultz
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Randy Pickard January 4, 2011 at 9:55 am

Jordan - Hopefully, the caveats in the article serve as a warning that PPC is not something that everyone should go out and just give it a goh. As Ana indicates, this article is probably more informational than practical for most bloggers.
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Sherryl Perry January 4, 2011 at 8:25 am

Ana,

It’s good to see someone else writing about PPC advertising. I’m not an expert either but I have had success with it. I’d like to add a word of caution to anyone new to Google PPC advertising. The default is to include the “Google Display Network”. (This used to be known as the “content” network.) When this is on, your ads display whenever your keywords are in the content as well as when someone is specifically searching for your keywords. Your best bet at generating sales is when someone who is at the buying stage is searching for your product or service. (This means also considering “buyer-intent” when selecting your keywords.)
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Randy Pickard January 4, 2011 at 10:15 am

Sherryl - Good point about the Google display network. They tend to convert at a lower rate than search network clicks. If testing the dispay network, consider setting up a separate campaign just for display network ads, and only bis 1/3 to 1/2 as much as for search network ads.
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Dwayne Huggins January 4, 2011 at 6:57 am

PPC. I haven’t written it off, I just don’t find it fun.
As a tool to drill down on keyword research I can understand and see where Randy is coming from. But in order to be able to drill down properly you have to know PPC to a good / great level and this learning curve has the potential to suck you money out of your purse / wallet very quickly.

However. If PPC is your thing. Go brave and conquer.

Thank Randy, Ana and Alex for your opinion.

Chat soon
Dwayne
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Randy Pickard January 4, 2011 at 8:06 am

The cost of the learning curve has gone way up in price. Bids for many categories are 10 times higher than they were in 2003. Anyone planning on testing PPC should use the dashboard to set a daily budget limit to an affordable level. Also consider starting out on Bing and Yahoo through adcenter.msn. Cost of clicks is lower than on Google Adwords. However, I agree that unless you have a product or service with good conversion rates and high margins, PPC is too expensive to pay-out for most blogs. Given that PPC has become too expensive to pay out for many on-line retailers, it is really challenging to pay out for a site with an ad or affiliate supported revenue model.
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Lisa January 4, 2011 at 6:50 am

Randy:

Great article. I agree with Ray up here that more localized targets have a better ROI. I only dabbled in PPC for a bit last year and noticed a higher CTR when I geo targeted my campaigns. I think people need to be more educated in PPC before diving into their wallets because unfortunately, one mishap can cost a bundle.
It was quite interesting your research on shopping baskets vs plastic shopping baskets. Just goes to show that more laser targeted keywords can and do get more clicks.

Lisa
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Randy Pickard January 4, 2011 at 9:46 am

Lisa - Seems like you did your homework and were appropriately careful. It is amazing to me how much money some newbies throw at PPC is order to “win” the auction. Google’s own research indicates that position on the page does not dramatically alter conversion rates. So the highest bidders get positions at the top of the page in the sponsored search results and a lot more traffic and sales, but at a much higher cost per transaction than lesser bidders.
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Ray Higdon January 4, 2011 at 6:43 am

Good stuff, I have seen PPC costs go crazy too, local stuff still works well though as Google seems to like the relevancy
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Randy Pickard January 4, 2011 at 9:37 am

Too bad we can not return to the early days of PPC when a $0.15 click was expensive. Good advice on local focus. The settings menu provides an easy way to set up targeting limited to desired geographies.
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