Why Too Many E-Commerce Business Owners Wrongfully Give Up on PPC – PPC Tuesday

By Kevin


One thing that has always concerned me in the e-commerce world is how often I hear from business owners that they tried PPC, but it didn’t work for them and they turned it off. It runs counter to everything that PPC is supposed to stand for: a profitable way to drive qualified traffic, and a scalable way to grow your company. So I’m going to dive into the main challenges that I hear from those business owners and give you an idea of what I tell them. It’s actually quite simple.

So when I hear that there’s no real accountability in PPC or that the search engines are making it too difficult to find out what’s truly wrong with the campaigns, I interpret it as follows: the PPC accounts are not set up for accountability. It’s very simple, if you jumble all your eggs in one basket, then you won’t know which eggs are smelling bad, only that the basket now stinks.

That’s what you’re seeing on the left side. It’s all too often that when a business owner first tries PPC, they either do it themselves or hire an amateur and the amateur way to create a PPC account is simple: put everything in one campaign. There’s no foresight to the whole build. And it is incredibly difficult to make changes to structure later on, so it continues to grow and modify in one little chamber, getting more convoluted every month as changes are made with no sort of organization.

Like all things in business, hard work pays off.

Creating a structure that makes sense, follows the natural patterns of your website, will allow you to granularize your data in levels and then analyze those levels in a way that gives you clarity. On the right, you’ll see that an ideal approach is creating a new campaign for each category that you have; then following up with Ad Groups within those campaigns for all the products that exist in that category. That way, you’ll know which products are the most suitable for PPC traffic, where your strengths and weaknesses are, what categories are hot or cold and what inventory you should be focusing on. That’s just a small taste of the numerous benefits you’ll get from a better structure. But the best part, is that its easy to modify and improve over time. It has the bones to support a strong muscular system.

In this slide as well, we’ve kept the wrong way on the left and the right way on the right. Let’s see the wrong way: this is specifically the wrong perspective to take when analyzing the cost effectiveness of your PPC accounts. Most e-commerce companies focus on two key metrics to determine the overall effectiveness of their PPC accounts: cost-per-conversion and average order value. This is too simple of a view. It does not account for individual successes nor pinpoint specific issues within your accounts. It gets a bit complicated. It’s easy to get cost-per-conversion data through most PPC management platforms all the way down to the keyword level. But there’s not an easy way to get revenue values at that level. So, in the end, business owners are left with the option of only being able to address the ROI of their investment at the highest level possible.

Well – that’s not entirely true. There are ways to bring revenue data into every level of your PPC program.

We do this for all of our clients and it’s the right way to manage a PPC store. It would be one thing if you could honestly say that the value of every sale was exactly the same, but that’s rare in e-commerce. So the right side of our slide shows the right perspective. Drill in. Drill into properly structure campaigns, ad groups (which are products) or even keywords. Here, we show a product-level analysis of cost versus revenue. Like on the left, there are sections of this product spectrum that are either very unprofitable or just not profitable enough. Yet, there are diamonds within this rough scenario. Product 3 has stellar performance at a $15 cost and a $125 actual order value. The left-side scenario would not have appreciated that level of data mining. Maybe this lack on insight would have caused the owner of this business to stop PPC altogether when there were so many shades of grey to discover before making that conclusion. The keen observer would also notice that product 2 is almost there in terms of becoming a highly profitable PPC investment and with the right investment of time, analysis and creativity, this business owner could see his PPC spend turn around significantly.

That’s where the biggest hang-up enters: time. Granular data mining into performance to discover issues and opportunities is a time consuming activity. It’s a lot easier when your structure tells you the story the right way of course. Creative changes like ad text and promotions are time consuming of course, but tracking that back again in the data stage is what makes the effort worth while and hopefully, with the right analysis, it will make your next batch of creative changes that much more effective.

Getting to an accountable structure takes a lot of work, but once you have built it the right way, you’ll have all the flexibility in the world to scale with new products or modify existing products with keen insight. Finally, tracking month-over-month to determine whether or not your activities are improving your ROI is a key to growing your store. That’s the essence of good PPC marketing. Looking months ahead will also help you steer your Titanic way from icebergs and into clear waters. Never underestimate the value of good pre-season planning when it comes to PPC.

Sure, this is a daunting task – but its not so daunting that you shouldn’t commit to one of the greatest means to grow your e-commerce store.

If you fail to leverage this wonderful infrastructure of paid advertising that is timely, controllable and ever-so-customizable, then you’re giving up far too early. If you don’t have the time, work with a company like ours to pick up the opportunity that exists for your company.

We perform audits for people who want to get their PPC program analyzed. We’ll let you know if your structure is sound; if you are able to see revenue at the granular levels and much, much more. If it makes sense, we’ll be the ones who help you take your PPC marketing program to the next level. If you’re ready to get PPC working for you, give us a call at 800-504-4324.

Thanks and have a wonderful PPC Tuesday!