Summary of the Presentation made by Bobbi Leach at Affiliate Convention
December 3, 2009.

In case you missed it, or want the notes to look at, here’s a summary of the presentation RevenueWire’s General Manager, Bobbi Leach, made at this year’s Affiliate Convention in Los Angeles.

It’s packed with useful data, insight, and information, so be sure to read to the end! Also, if you’d like to see the presentation’s accompanying visuals, you can download the Powerpoint file here.

Presentation Agenda

• Why is pay-per-click an important strategy for growing your business? It’s not to say it should be your only strategy, but if your objective is to make lots of money then PPC will likely be a key component.
• An overview of how you should manage your PPC campaigns. PPC is a system that requires time to perfect and needs ongoing management.
• The three key ingredients of a PPC campaign. This presentation simply provides an overview of how they need to work together.

Search Primary Source of Sales

-    As we all know, more and more people worldwide are using the Internet to make purchases.
-    There are lots of different studies projecting the growth of ecommerce in the US and around the world over the next 3 years. Three different US studies (Forrester, Jupiter and eMarketer) project anywhere from $200 to $300 billion for B2C. Europe is expected to be $125 billion. Worldwide is expected to reach $1 trillion by 2012.
-    So if more people are purchasing online, it makes sense that, as affiliates, you want to capture some of that market.

-    The number one source of traffic for online sales is search. Email is a distant second in terms of driving traffic that generate sales. Other methods represent an even smaller proportion according to a recent ComScore study.
-    PPC is a key method to capitalize on the volume of people who are searching for items to buy online.

Super Affiliates Use PPC

-    If you’re still not convinced that PPC is the best method for earning revenue, then let’s look at what the high performing affiliates do

-    On average, the high income affiliates use PPC 2.5 times more than the low income affiliates.
-    Plus, high income affiliates are more likely to invest significant portions of their budget into driving PPC traffic. According to the same Affiliate Benchmark report, lower income affiliates spend less than $1000 per month, where as higher income affiliates spend over $5,000 per month. In fact, super affiliates usually spend tens of thousands each month.
-    The higher income affiliates are also more likely to use multiple search engines – Adwords, Bing – for driving traffic.

PPC Has Other Benefits

-    PPC has a number of other advantages over other methods for driving traffic.
-    On average, PPC drives much higher volumes of traffic than other methods such as SEO and email – usually 10x the volume.
-    On average, it also generates higher conversion rates – usually 2 to 3 times — than other methods including SEO and email.
-    Paid search is also very targeted not only because of the key words you’re buying but also by other criteria such as regions, timing and ability to control your messaging – tying specific key words to ads and landing pages.
-    And more importantly, PPC is very easy to track and measure your ROI
-    Testing is the path to gaining market knowledge. With PPC you can very quickly determine if there’s a market for the product you are pitching.

PPC is a System

-    If you want to be successful with PPC, you need to manage it as a system of interrelated parts that require continuous improvement. That sounds simple, but it takes a lot of work and it’s what separates the people who run basic PPC campaigns and those affiliates who run very successful PPC campaigns.
-    The overall process includes building your campaign, tracking the results, systemically testing elements of the campaign and deploying those improvements. Your initial goal should be to build a successful campaign – generate a positive ROI – perfect your system and then test new stuff in separate campaigns.

-    And just when you think you’ve got your campaigns optimized, the market changes. Search is a dynamic field – what works today may not be profitable tomorrow.
-    You need to stay abreast of changes in the marketplace and with search engines. For example there are new regulations from the FTC on endorsements, and you should always be checking the Editorial Guidelines of the search engines you’re using.
-    A top PPC affiliate is systematic, analytical, detailed and good with numbers, while also being creative, intuitive and entrepreneurial.

Calculating ROI – The Most Important Metric

-    The only metric that really matters in tracking your success is your ROI.
-    While you are going to track your overall profitability for your business, you need to track your ROI for each campaign.
-    The great thing with PPC is how easy it is to track. You simply need to know is your campaign cost and revenue then you can calculate your net profit and ROI.
-    While the net profit shows that you are making money, the ROI shows how well you have your money working for you and provides a metric to compare from campaign to campaign. All of your campaigns might make money, but if some are only generating a 5% ROI then it might be better to move your money into the campaigns that are generating a higher ROI.

Calculating ROI – Planning

-    Besides evaluating active campaigns, you should be projecting your ROI before even starting a campaign. By making some assumptions such as the CTR and CVR, and then entering your revenue per customer, you can quickly determine how much money you can spend on a key word in order to be profitable. After doing your keyword research, you might find that the likelihood of making money on this campaign is pretty low.

-    By using this tool you can determine go, no-go decisions as to whether you even start a campaign or if you have existing campaigns that you are evaluating, you may move more of your budget into the campaigns with higher ROI.
-    So just to give you a sense of what you should be aiming for – if your campaigns are generating <5% ROI, you may need to continue optimizing them or if you’ve tried that already, then they may not be worth continuing. Likewise, if your campaigns are generating a 10-20% ROI, then you’ve got some winners.

The Elements of PPC

-    Managing PPC campaigns as a system also means optimizing the ingredients from key words to ad copy and landing pages.
-    If you are using PPC to drive online sales, then you need to understand not only the product features and benefits, but also your customer’s purchase behavior.
-    While understanding the product is going to give you certain key words and messages to highlight, it’s equally important to develop a customer persona. Who they are, What they need / want, What purchase process are they going through, Are they ready to buy versus just evaluating options, etc.
-    Each product feature and customer need will likely lead to separate key word lists, multiple ads groups and multiple ads – all optimized for this specific need / feature.
-    The more targeted you can be, the better your conversion rates and therefore your ROI.
-    So let’s look at each of the three ingredients and then we’ll come back to campaign structure.

Keywords

-    Start generating a list of key words – there are tools to do this such as Google’s keyword tool and Wordtracker to KeywordSpy and KeywordDiscovery – plus sources of data like your Google Analytics and competitors.
-    Once you have a comprehensive list of key words then add things such as misspellings and plurals as well as negative words you don’t want to pay for.
-    Then organize your keywords into categories – how you organize them will depend on each campaign, but essentially put them into relevant groups based on how your customers will search for this product.
-    Don’t worry about have too many categories – the more categories means the more targeted your ads and landing pages will be. In fact, how you organize your keywords is secret sauce for some affiliates.
-    If you’ve done your ROI for this product, you should have a CPC that is your maximum. This is what you need to monitor when you’re evaluating the success of keywords.
-    The high income affiliates who use PPC manage lists with thousands of keywords. Usually using spreadsheets, you will be continually culling your keywords – moving them into different buckets from active and tested to negative keywords.

Ad Copy

-    Writing ad copy takes practice. It’s not something that most people do well right away.
-    You need to practice the 3 Cs – be concise, be compelling and communicate your competitive advantage.
-    It’s difficult getting across a motivating message in very few words.
-    The most important thing to remember is that your ad should reflect the key words you’ve bought.
-    You need to know the Editorial Guidelines of the search engine you’re using inside out.
-    Because you’ve generated hundreds of keywords and organized them into dozens of categories, you are going to have many ads.
-    As a general rule, you may start with 4 ads per ad group, track performance and keep pruning the non-performing ads.
-    Tracking the success of each ad isn’t simply looking at the CTR, but ultimately if you converted these clicks into purchases or sign-ups.

Landing Pages

-     You’ll likely have a landing page for every theme, and probably multiple landing pages for each campaign.
-    Again, the point is to make it as consistent as possible from what the customer is searching for, to the ad they click on to the landing page they view. The more consistently it meets their needs, the better your conversion rate will be.
-    In addition to testing different landing pages – which one converts better – you’ll want to test elements on each landing page.
-    Split testing takes a very systematic approach. You don’t want to be changing to many things at once otherwise you don’t know what change generated better results.
-    But you do need to test everything – start with the overall look of the page, then start changing major copy, graphics, colors, button placement and secondary copy.
-    The most important element on the landing page is the call to action button. Make sure what you want the customer to do – buy, register, download – is very clearly and prominently placed on multiple locations on the landing page.
-    The most important thing to measure for your landing pages is the CVR.

Campaign Structure

-    When setting up your campaigns, the structure of how you organize everything is very important.
-    Structure means creating multiple ad groups for each keyword category you’ve created.
-     Keyword categories should be grouped by close-knit themes and they should be appropriately named.
-    This will help you to easily track the success of your campaigns – kill unprofitable ad groups and invest in expanding profitable ones.
-    If everything is lumped together it’s more difficult to know what keyword and ad combos are working best, therefore it’s difficult to track ROI and prune the non-performing ones.

Building Block

-    PPC should by no means be your only method for driving traffic BUT it is one of the major ones.
-    If you want to be a high income affiliate, then more likely you’ll need to use PPC to get there.
-    But it will take time to succeed and you’ll need to be very disciplined about following a systematic process.
-    And no matter what it should be part of an overall mix of marketing tools that you use from SEO and email to social media.