Breaking Down Paid Search, Part 2

Even though the affiliates work within Google’s system, you can see why, taken together, Google might consider them a sub-optimal user experience. As we’ve seen, affiliate marketers, especially for popular offers, inadvertently allow the same company to occupy more than one listing. In Google’s eyes, sites that regurgitate results don’t add value; they take value. So, Google continually looks to curb such results, leading to the love / hate relationship with affiliate marketers. In the case of Blockbuster, when the payout on the Free Trial offer skyrocketed, that created opportunity where opportunity didn’t exist before. Like boats vying for the best position to fish, affiliates simply rushed in to gain their share of the search clicks that they could now afford. Perhaps better put, they now moved their boats to an area that previously didn’t look like a good place to fish, and they’ll fish it as quickly as possible. 

The landscape for leveraging search to generate revenue on a pay for performance basis has, expectedly, matured over the years. In this,Part 2, we describe what you would need if you decide to enter into the performance-based paid search business and how certain aspects have changed over time.

Pre-Launch: Before you truly go live and activate your campaigns, here’s what you’ll need…assuming you’ve decided what you want to market.

• Site Creation / Landing Page Design – In the past, affiliates using paid search often didn’t have to design pages. Webmasters created sites and they owned the organic listings. As we see with couponmountain.com showing up, the lines are blurring as to who fits where. Now, affiliates no longer need to simply understand how to successfully advertise on the engines, they have to understand how to do everything. New to the process and something that has accelerated in the past six months is being able to build sites; this includes registering the domain, setting up hosting, design, and content. What makes current affiliates unique is their speed to market. A network will come out with a new offer or increase the payout of an existing offer, and the savvy affiliates will have something listed within 48 hours if not less. Of all the changes to the landscape, this one has the least certainty and least math. It’s the biggest challenge, a moving target, and should not be underestimated.
• Keyword Generation – It goes without saying that any search marketer needs keywords. As we have progressed, two things have happened in this arena. The first is commoditization. For some companies, this will remain a proprietary strength, but for those who can make do with the 80%, you can now buy access to very large lists of related keywords. Trellian is the perfect example. For less than you would probably spend on employees, development, and/or time, you can obtain the same results with them. The tools assist in the second major trend, going deeper in the keyword set. In a trend that doesn’t look to slow, marketers have not hundreds of words, but thousands. It no longer sounds shocking or surprising to hear those with tens of thousands, hundreds of thousands, or even millions of keywords. 
• Clustering – For Retailers this makes sense and comes naturally. Think of someone like Office Max. They would create campaigns around major product groups, perhaps Office Chairs or Printers. Then they could have ad groups for the subsets, say Herman Miller chairs or HP Printers. For many of the offers in the affiliate world, groups don’t form that fluidly. Take something like Blockbuster. You could bid on new releases and genres, but you are also bidding on behaviors. The classic example of why you need this are words with multiple meanings. If you have apple, how does the engine know whether you mean the fruit, the computer company or New York City. And even if the fruit, do you mean it in a biblical context or as part of an old wives tale to keep the doctor away. From what I’ve seen though, no good tool exists to help with the process of clustering words. Those that do it right can have a huge leg up, and they know it.
• Uploading – Google has made this much easier thanks to their editor, but other engines still have manual interfaces or clunky bulk upload sheets. More than just the act of uploading though, comes what to upload. This comes into play for larger volume people. You don’t want the engine to think of you as a spammer so you must have some strategy as to the order you plan on launching. In this phase comes something that could have its own bullet point in between this step and the previous one, ad creation. Your clusters will often determine your ads, and you will need to have decided whether you have one ad per campaign, a special ad per ad group, etc. It’s no small feat. 

Post-Launch: You’ve gone live, now make the most of it by doing the following.

• Ad Optimization – Despite your marketing genius, you will need to keep the engines happy by making sure you have the highest performing ad. Some services exist to help you test many creatives in a shorter period of time or you can use the engine’s rotation option. A high CTR, while it might cost you more in the number of clicks, generally saves you more in the long run. Be diligent about maintaining or increasing your CTR.
• Bid Optimization – Until the time when Google or others offer a target CPA (think Right Media where you pay on their preferred metric but they try and target yours), bid optimization can make you, or the lack can break you. A slew of third-party SEM’s exist to help with this and many other steps, but only now do we see the emergence of outsourced solutions to help with bid optimization as it pertains to those trying to hit a certain CPA. There is room for the Trellian of bid management, but until such time, either keep your costs low through great quality or have a super excel / access junkie on hand.
• Landing Page Optimization – Along with bid optimization, landing page optimization offers one of the few areas in your control where you can cut your costs by double and triple digit percentages. People have done a good job incorporating A/B testing with others stepping it up to multi-variate. Here, as with keyword generation, a bevy of third-party firms from those working on profit share (SiteTuners) to the enterprise level Offermatica’s exist to help you both optimize conversion rates and/or manage the mapping of your ads to specific landing pages.
• Keyword / Campaign Expansion and Refinement – With search your work is rarely over; you can often hit a point where it runs on its own, but if you want to keep growing your revenue and/or lower your costs, it takes constant work. After you go live, you will want to see what is working and expand on that as well as modify those that aren’t working, and modifying could mean changing the ad text, looking at bids, or not running on those words. Incredibly smart people can make almost a full-time job out of this. Tweaking the account is as much an art as it is a science.

It probably comes as no surprise to learn that each step of the way has become more complex, with greater granularity needed. It also makes sense that as each step requires greater skills, services have grown to assist affiliates, and any search marketer, achieve better tools than many could develop on their own. You don’t need to excel in all, and many companies can do well by being very good at one from each group. Over time though, even if tools level the playing field in most, without some differentiating asset in at least one, you will find it harder and harder to compete in a marketplace that will only see more competition and greater sophistication of the players. And, in the end, you need skill but luck doesn’t hurt either.