ExpertAdWords

Looks like Google has finally announced its Pay Per Action experiment and it will be interesting to see how it is adopted. I hope I’m not violating my NDA by talking about it but hopefully, now that the news is out there, it will be alright (don’t slap me Google, I love you). The PPA experiment, to my knowledge, was another separate content network that advertisers were opting into. Seeing that the information is not on AdSense makes me believe it will still be a little while till it is totally implemented. I’m interested in seeing how Google is selling the network to publishers or if that was just how it was tested. PPA will be perfect for customers with a low conversion rate (see my last post) or customers that are worried about click-fraud.

I’m also curious about how pricing habits will develop. Will a mortgage PPA be around $2000 a conversion, Car financing, $1000 a conversion, Life Insurance $500 a conversion? This approach will definitely appeal to advertisers with fully developed backend marketing programs and less to scam artists and affiliate marketers.

What do you do if you have a product that is converting poorly? Currently, a product I manage is getting a measly 600 clicks a week. This amount of traffic is just pathetic and I have been talking with the brand owner about increasing visitors to the site. However, the only reason I am reluctant to do this is that the conversion rate for this landing page is a horrible .15%. That means in a nutshell, if 10,000 visitors clicked on our ads and visited the site, only 15 people would make purchases. At this rate, even if our cost per click was a meager $.50 and our average order value (AOV) is $90 we would be losing money hand over foot.

(2 orders * $90 AOV) - (600 clicks * $.50 CPC) = -120

Extrapolating this data, if we increase traffic a ten-fold:

(20 orders * $90 AOV) – (6000 clicks * $.50 CPC) = -1200

Obviously, the landing page needs a lot of work. That is the biggest problem if I am trying the core traffic to the site associated with this product. Additionally, I was trying to figure out the standard deviation of the conversion rate in order to justify not driving more traffic and I remembered a couple of concepts.

1. Standard deviation is irrelevant in this situation because an increase in sample size could dramatically change the average. If I make my net bigger, I may catch more fish.
2. Advertising and Marketing drive sales and not the other way around.

Obviously, what I am doing isn’t working and needs to be changed (lower Max CPC) but lowering my overall budget is not the answer. Being more creative and aggressive is.

Stop the information monopoly, originally uploaded by Ben Werdmuller.

Interesting promotion by Ask.com (and a lot of experts believe Yahoo.com) to persuade consumers to look at other search engines for information (by other, it’s assumed, not Google).

Most of these early promotions have been found in the London Tube. It will be interesting to see what other channels the PR Company responsible decides to pursue.