Students have been dropping by the office more and more as the year moves along…they are looking for internships, jobs or simple career advice. Some of the best questions that have come up so far are: What can I do right now so that you or somebody like you would hire me? What do you look for in a job candidate? What can I read or where can I learn more?

Most of these students are absolute beginners when it comes to pay per click advertising and web marketing in general. I am a fan of learning directly from a blog post, but I think a beginner needs to go out and DO instead of just READ…so the following thoughts are action oriented (or I am lazy…) I want and expect people to leave this page to learn directly from a source.

Here are my thoughts on what a person should know and/or do as a beginner:

The lay of the land

Study the writing, the placement and the style of the ads you find in the search engines, on regular websites or on social media platforms.

Natural/Organic vs Sponsored/Paid

Investigate the search results at a variety of search engines. Learn how to spot the paid vs the organic results. Some of these aren’t obvious believe it or not! Dogpile comes to mind…do you think a normal user can tell the difference there? Yahoo has paid inclusions scattered throughout their ‘organic’ results too. Go check it out!

Content Networks, Image ads & Social Network Ads

Explore a variety of websites and pay attention to the banner ads, text ads and their locations in the website. The publishers (the people that own and operate the website) typically put ads in the most visible, highly trafficked areas on their websites. You can learn a lot from these placements…here are a few very popular places that host content ads, image ads and/or social network ads: Facebook (duh!), MySpace, Gizmodo, New York Times, Digg and MSN.

Know The Basic Acronyms and their Definitions

PPC = Pay per click. You pay when somebody clicks on your ad! Yes! Basically, every time your ad appears it is free. When somebody clicks to see your website, you pay. Simple, right?

SEO = Search engine optimization. The marketing behind a website’s natural organic/natural ranking ability. SEO is NOT PPC and PPC is NOT SEO. Please do not confuse the two.

SEM = Search engine marketing. Search engine marketing is any marketing on the search engines. It is not just PPC and not just SEO. It can be both…

CPC = Cost per click. The amount you pay for a single click. I listed this here because there are several iterations of this metric out there. You might see eCPC which means effective cost per click. eCPC simply divides your total cost for the run of the ad divided by the number of clicks you received. Example: You buy a flat fee ad on a local chamber of commerce website for $250. The ad was live for 30 days. You received 78 clicks from that ad; therefore, $250 divided by 78 clicks gives us your eCPC of $3.21.

CPM = Cost per thousand impressions. An impression is simply a single instance of your ad being displayed on a website. There are several banner ad networks out there that still charge based on impressions. Or you get the choice: you can buy based on impressions or clicks. The industry standard is to price or bid based on a per one thousand impressions basis. You may run into CPMM which is cost per thousand thousand impressions – or cost per 1 million impressions.

CPA = Cost per action. Advertisers pay a publisher or a company based on a desired outcome. This can be for a lead, a page view, a sale, etc. The most common CPA model is the affiliate marketing model. Google ‘affiliate marketing’, you’ll learn a lot.

Keywords

Research

Go search for good keyword research tools. I recommend Google’s keyword tool, Keyword Discovery has a free one – Wordtracker does too. Use them all, compare and contrast them and get familiar with them.

Intent

There are a lot of good articles on the intent of a search query. I think students and beginners that read this are smart enough to determine what the intent of a keyword is…is it transactional? Will it lead to a sale? Does the word lean more towards discovery and research? Is it a branded keyword? Think like your target. What will they search for when they’re ready to buy? What will they search for if they are just starting to discover the product or service you offer?

Writing

Sales copy

I require at least 3 writing samples from each prospective employee. Why? Because writing is essential to success in this industry. If you can’t get a thought across with few grammatical errors or spelling mistakes, then this is probably not the right place for you at this time.

Learn to write well, learn to communicate quickly and efficiently. You are working with severely limited space to convince somebody to visit a website. Attention spans are shorter than ever, so you need to learn to write powerfully, simply and effectively.

Get Experience

Experience is one of the biggest requirements that I am interested in when I am hiring somebody. If you have your own skin in the game, and you can prove it to me by showing me your account/your website/etc, you are much more likely to get hired. I will not accept anybody that hasn’t spent at least $100 advertising something – anything!

Use your own money

Using your own money proves that you are dedicated to learning the trade. You have your own skin in the game, that takes dedication and courage.

Use your own website

If you have a website already or a marketable skill, it is nice to see that you have taken the initiative to do it yourself – it means that you are further along the learning curve than almost every new applicant or student that I meet with.

Use your mother’s uncle’s best friend’s website and money

If you don’t have a website or your own money, at least start working in a relative’s account or a friend’s account with your own user ID so you can see and measure the changes you make on the account via change reports, etc. Being able to show me that you know your way around is better than anything – and the ability to show me the changes you have made is a good sign that you are willing to try things out.

Just do it for at least 30 days on your own and on a tiny budget

A beginner can learn soooo much by doing exactly what they want to learn. Just make sure that you are working on a daily budget, not monthly when you start. If you can afford $3 a day, then make sure everywhere you see ‘budget’ that it shows $3 per day. Don’t lose your shirt with this, just experiment with it.

Don’t get certified

Meaningless

Getting certified used to be cool. It’s not anymore. If you can show a business owner or a website owner what you have DONE, show them your work, then you are showing more competence than one who simply learns the material to take a certification test.

For me, seeing a certification on a resume is meaningless. I. don’t. care.

Reading

Start by reading all of the offical blogs and learning centers. Go google ‘AdWords Offical blog’, ‘Yahoo Search Marketing blog’, etc. Find the offical blogs and subscribe to them. Read through the official learning centers to get a basic background of best practices, search engine editorial guidelines and more. Here’s a freebie…I’d start with the Google AdWords learning center.

PPCHero is an excellent pay per click blog…you’ll accumulate more blogs to read as your knowledge grows. I don’t want a beginner to get paralyzed with too much reading.

This is about DOING. Formulate your own opinions – every piece of advice you read may or may not be true, so test it out yourself if you can.

Show me, don’t tell me

If you can’t tell, the bottom line is that I want beginners to show me what they have done and what they can do. Don’t tell me. Show me. Showing me is more convincing than telling me. The account doesn’t have to be clean or employ 100% of all the best practices out there. What’s important is that you simply know your way around a little bit and that you have the initiative to DO it.

Ok! Get out there and get ready to start at an internship level with PPC…it should take you 30 to 90 days minimum. Good luck!

While setting up a mobile campaign last night I thought “Wouldn’t it be great to see the mobile search volume for these keywords? I bet Google has a tool…let me go to AdWords Help and see.”

Kablam! Here was the 1st result. Google’s search technology is pretty dang good.

And because I don’t think Google does this tool justice, I’m going to give you step by step instructions with screenshots! Woot!

1. Log into Google Adwords…set up an ad group with mobile ads – you can leave it paused if you’re not ready to start advertising on cell phones. The tool will still work.

2. Click on your keywords tab in the ad group.

3. Click on ‘Keyword Tool’. The ‘Keyword Tool’ link is above the ‘pause’ or ‘resume’ button and below the date range.

4. Start searching! Note that “Results are tailored to mobile searches”.

I found a TON of niches where I can bid around $1 per click OR MUCH LESS and sit at the number 1 mobile ad position…when I know for a fact that the regular avg cpc we see in regular search ranges from $2 to $65!

Anybody know what mobile conversions are like? Have you had success with mobile?

We’re going to SMX West next week – and we’re speaking at a few awesome sessions!

Register to attend if you haven’t already, it’s going to be a blast!

The sessions we are speaking at:

Advanced Landing Page Strategies

Writing Killer PPC Ad Copy

Analyzing & Converting Paid Search Traffic

Let us know if you’ll be there! We’d love to meet one and all!

• Quick Update: Affiliate Summit West and Ads on this blog
  Affiliate Summit West 2010 I’m stoked to be going to Affiliate Summit West this year! I’ll be getting in late Sunday night but I’ll be...

As more advertisers are jumping on the paid search bandwagon every day, the ppc marketplace is becoming increasingly emulous. In competitive markets, more and more searches bring up pages full of nearly identical sponsored ads. Here’s an example of a Google search for house painting:

Does anyone else look at this and see the exact same ad over and over again? The only ad that remotely stands out is #4, because the local “Honolulu, HI” makes it take up a little more space.

Does your ad look like this? Well don’t resign yourself to mediocrity. If you think your website is great, but your ad stands out about as well as a single zombie amongst a pack of undead, then you need to keep reading!

(Photo from the movie, Shawn of the Dead, retrieved from Wired.com)

Because of a proliferation of PPC blogs, pay per click tip guides, and “get rich off of Adwords” websites, pretty much everybody has started using the same tricks: capitalization on every word, a call to action that ends in words like “now” and “today” with an exclamation point on the second description line, dynamic keyword insertion, and as many keywords crammed into the ad as possible.

Take another look at the ads for house painters above. Seven out of the eight ads have the word “Free” in them (another common trick), and two of the ads have the exact same call to action, “Get Free Painting Estimates Today!” It might seem counterintuitive, but by employing some of the most “proven” ad copy writing techniques, chances are – these days – that you are going to look exactly the same as everyone else, severely blunting the effectiveness of your ad.

So how can you differentiate your ad in such a competitive space? It seems that by simply writing something unique, an advertiser could seriously increase click-throughs based solely on curiosity or catching the user’s eye. But before you start trying out some wild CTR-increasing gimmick, you should consider your goals. In some cases, simply generating as much traffic as possible is the only goal; however, typically the goal of a paid search ad is to eventually get the click to convert into a sale, lead, or signup. Unique ad copy alone won’t help you in these departments.

Keeping in mind that our priority is probably going to be conversions, and therefore you can’t afford to pay for clicks that have no possibility of making you money, I would like to talk about 3 things that can transform your text ad clone into most attractive ad on the page.

1. Borrow ideas from unrelated, but highly competitive industries

Some industries are more cut-throat than others. Chances are, there are many industries that are more wildly and violently competitive than the one you are advertising in. Think of an industry where competition is fierce and take a look at some of the ads. Take note of the copywriting techniques they use, and use these as a springboard for your own ad copy ideas.

We recently had a client whose ad performance was simply not doing as well as we (and the client) thought it could be doing. A search showed that our client’s ads in certain campaigns were nothing but clones of a dozen other advertisers who had entered the PPC arena in the past several months. We had a brainstorming session to figure out how we could get this client’s ads to stand out. We knew once we got the traffic to the site, we could make the conversion, but we just weren’t seeing any kind of growth in click volume no matter what we did.

So we took a look at some ads in one of the web’s most competitive industries: online dating. Even though our client was in the construction leads industry, we thought online dating ads might give us some insight into techniques we could use in our situation. While these two verticals are highly unrelated, we figured that advertisers in online dating that hadn’t already been driven out of business are likely seeing good results from their ads. And in order to stick out the competition, they would also be forced to write very enticing ad copy in order to snatch clicks from their competitors.

Here are a couple ads that caught our attention right away:

First of all, the ® symbol in the Match.com ad immediately gives it credibility and allows it to stick out. They still use the keywords “online dating,” but they clearly draw attention to themselves. Another attractive thing about this ad is the claim to fame, the “World’s Leading Dating Site.” One of the editorial rules for Google and other major search engines is that all claims in ads have to be backed up on the landing page visitors are taken to. If your business doesn’t have some kind of credibility factor like this, take the time to court some endorsements or enter some competitions. Match.com could be the world’s leading dating site in terms of members, active members, page views, profit, or any number of things. This means that other dating sites could be the “world’s leading dating site” by another criteria. Which also means that your site could be the leader of something in some quadrant of the world. Pursuing something like this can definitely be worth it.

Although we gained some insights from the Match.com ad, we found another one that gave us some material we wanted to immediately work with:

This ad was especially appealing to us for the construction leads market. All of the ads for a search for “Home Remodeling” would show up with the title “Home Remodeling” and occasionally things like “Home Remodeling Quotes.”

So we tested a new ad, based on ideas we got from this one, against our old “zombie-clone” ad. We changed the headline “Home Remodel Bids” to “Top 3 Remodel Contractors,” and guess what?  On that change, our CTR shot up and our conversions consequently increased. Nobody else had a similar ad, and apparently people searching for home remodeling services liked the idea of getting bids from the top contractors (according to us) rather than just getting bids.

You don’t have to confine yourself to pay per click ads, either. Turn on your TV or log onto YouTube.com and watch some ads in another industry. Take note of the calls to action that the ads use. How do they grab people’s attention? What kind of language do they use? Of course, a commercial has a lot more words at its disposal than a paid search ad, but some of the best video ads can condense their pitch into one or two very short sentences.

While you’re at it, go to Barnes & Noble and bust out some magazines. What ads grab your attention? Of course, images can play a big part in attracting you to stop turning pages to look at an ad, but effective copy is essential to print advertising in almost every industry.

2. Write something clever rather than keyword-stuffed

What can cause two ads for the exact same product or service to be light years apart in terms of grabbing attention and invoking action? To stand out in this way, the ad needs to approach the customer from a different direction. A unique angle can give you more than just an edge on your competition. To avoid speaking in too many general terms, here are a few examples, using our same construction leads company:

Instead of:

Start Your Remodel Now
Get Quality Home Remodeling Bids
From Local Pre-Screened Contractors

We tried:

Start Your Remodel Now
Top Contractors So There’s No Delay
Shop Free Bids & Save Today!

What do you think the click through response to this ad was? Well, have you ever heard of the phrase, “through the roof?” Rhyme and cadence are a couple of things that can get your ad to stick in someone’s head. And people like the smooth feel of a rhyme. It may not work in every case, but it’s definitely worth testing.

Here’s another trick we’ve tried: alliteration.

Ready To Remodel?
Compare Custom Contractor Quotes
Click Quickly To Cut Your Costs!

How much friendlier and more clever is this than the generic ads everyone else has, like this one?

Remodeling Quotes
Find Remodeling Contractors
Get Remodel Price Quotes Today

Just a few things to think about. The point is, stop focusing on cramming keywords, and focus on making your ads appealing. Chances are, it’ll pay off.

3. Try something risky

By risky, I don’t mean stupid; I mean do something aggressive. And by aggressive, I don’t mean a call to action like “Order Right Now!” I mean write something that persuades people to click on your ad without looking desperate or the same as everyone else.

This is tricky to do. By studying competitive advertisers in other industries, as discussed in Tip #1, you might be able to find inspiration for ideas if your brainstorming hasn’t gotten you anywhere so far.

Take this example:

Cut The Crap
Expert Remodeling Contractors Are
Ready To Bid. Get A Free Quote Now!

Now there’s an ad that could get your attention. Of course, there are still editorial guidelines to be followed, and taste to be considered, but as the competitive game gets tougher, in order to outshine the rest of the text ad clones, good advertisers are going to have to test risky, aggressive ads.

And that’s the beauty of pay per click advertising. You can test everything, and nothing is permanent if you want to reverse it. If you no longer want to be one of the text ad clones, then start testing some new ads! If they don’t work, then test some other ones!

We’ll walk you through how to use this new tool right now:

1. Access the Search-based Keyword Tool by visiting this link: http://www.google.com/sktool/
2. Enter the URL of the page you want to base your query on in the first box – i.e. the page you want to generate more keywords for.
3. Enter keywords or phrases that you’d like to be part of the suggested terms in the second box. In the example below, we put “UFO” and “alien” in this box because we wanted to generate keywords that included those words:
   


(click to enlarge)

4. Now the cool part. Google now generates two lists for you. One is a list of keyword phrases related to the URL that was input. The other is a list of keyword phrases related to the search words you input. If this URL was linked to our AdWords account, the tool would have made sure to exclude any keywords we are already targeting!

   

   

5. Now you can analyze these results and decide what do with the information. In this case, it looks like the owners of the website should not only advertise on some new keywords, but also might look into expanding its product line beyond alien stickers and t-shirts, perhaps adding some PC games, toys, and skateboards. As an added help, Google tells you how many searches these terms get on a monthly basis, how much ad competition there is, and how much they suggest you bid on each keyword or phrase.

If you haven’t tried the new Search-based Keyword Tool yet, you ought to give it a shot. Tools like this can be invaluable to PPC managers and SEOs, not to mention webmasters and in-house marketing teams.

In his post, Rand poses the question: Why does paid search earn so many more marketing dollars than search engine optimization when organic results get more traffic than PPC ads?

In this post, we’d like to respond to this issue as well as question the assumption upon which the question is made.

Part of the data for the conclusion that most traffic comes from organic listings comes from a study done by Eyetools Eyetracking Research, which shows that out of a study of 50 people, most of them viewed a Google search results page like this:

As you can see, most people looked at the top left corner, with a smaller % looking at the right side. The SEOMoz blog concludes that SEO drives much more traffic than PPC, and several users then debate the reasons why more money isn’t spent in SEO if this is the case.

The assumption behind this conclusion is twofold. It assumes 1) that the triangle in the heatmap moves down to the organic results when sponsored ads are present above the organic listings, and 2) that traffic from SEO converts well enough to achieve a greater return on investment for SEO spending than PPC spending for traffic does.

Eyetools states in this study that the triangle of the most views “appears to include top sponsored, top organic results, and Google’s alternative results.” This would indicate that when ads are shown at the top of the page they receive more exposure than the top organic listings.

So in the screenshot that we see here, there are only sponsored links on the right side, and organic results go all the way to the top on the left. We overlayed a screen shot of a search results page with 3 sponsored results at the top on the left, and drew a box on the heat map where these ads were. As you can see, the majority of users’ eyes would scan the sponsored ads in the top 3 positions most heavily in this case:

So in the case of ads being shown on the left, PPC will get more traffic. This taints the data and the assumption that the SEO is best argument relies on. A more conclusive test would separate search results pages with ads on the left from those without them, drawing heat maps accordingly. This would help us to make some more educated assumptions about the topic we’re discussing.

Additionally, it can be said that traffic from sponsored ads may convert more easily than organic traffic, since many users click on ads with the intention to buy, where organic clicks may be less transactional and more informational. This will definitely vary depending on a lot of factors, and it’s all subject to verification or debate by data from studies, but what I’m saying is that your ROI may not necessarily be greater for SEO spending based on how targeted your traffic may be. Many of you will say “not likely,” but I say “not impossible.”

So who wins? SEO or PPC?

The answer is not to choose one over the other. As James Zolman pointed out,

I [have seen clients'] net income double and triple because PPC and SEO work together. SEO is slower, therefore the expense is lower for these particular clients. They would put more money towards SEO (beyond the $20k-$40k they already spend per month on it) if the results had a wider, faster reach. When they see the return on investment from one set of targeted keywords, they move to the next with the ROI obtained from the previous while leaving some on the table to manage and continue to strengthen their organic rankings. The same goes for PPC – except it is much faster moving, has a much wider reach, and proves a ‘good enough’ ROI to reinvest in it even more. It’s quite scalable… just like SEO, only a little faster for the most part.

Let me tell you about the conversion lift that PPC brings to SEO and vice versa – One company was making roughly $100k/mo from SEO 1 year ago. That seemed to be steady as they ranked in the top 10 for well over 1000 high quality terms. Enter PPC – within 3 months, their new income was at $400k/mo at an expense of $200k/mo on PPC. PPC contributed to doubling their ‘net’ even though the second $100k/mo net was more expensive than that provided by SEO. Their entire net increase could not all be attributed to PPC. We had return visitors, and we noticed that several who clicked on paid search ads would come back via an organic route and vice versa. I would say the doubling of net came because of the natural lift that each (PPC AND SEO) had on the other. Of course, without that added reach and traffic from PPC the SEO may/may not have increased two-fold within 90 days because PPC let us target 10,000+ new keywords/combinations where the company did not have quite the exposure that SEO was currently bringing to the brand/site – coupled with ‘owning’ more real estate for the 1000 or so terms they rank well for.

At the very least, I would never turn off PPC when a client gets top rankings via SEO – the added lift can be incredible. You just have to learn what combination gives you that ROI lift/brand lift. When I say combination, I mean which ad text compliments the organic listing, what position is positive vs negative, when is there a real ROI, etc. It’s all in the analytics.

Bottom line for me: SEO is not better than PPC. PPC is not better than SEO. PPC is not easy ‘out of the box’ beyond the surface. SEO is definitely technical. They NEED to work together because they MAKE YOUR CLIENTS MORE MONEY, MAKE YOUR COMPANY MORE MONEY.

And I’d add to that that the more real estate your website listing takes up on the page the better. Whichever investment is more profitable, both investments together are the most profitable. Until you get to the point that your marginal cost is higher than your marginal return, a joint SEO and PPC spending strategy is a great idea. As long as you can make money back from each investment, why not pile them up together?

And of course, PPC is a great way to sustain profits while you wait for your SEO to take effect anyway.

This flow chart is useful in helping you to not forget important things in your campaign setup like remembering to separate brand vs non-brand keywords. And even if you’re experienced at PPC management, it’s nice to not have to write your own checklist.

So be sure to check out this flow chart at PPCBlog.com!

Why This Firefox Addon Rocks!

This toolbar will display today’s basic key performance indicators at the bottom of your browser.

Double Click this toolbar for your stats to update – it may take 60 seconds to update depending on the size of your account. The data you see will be for today only.

Right click to see the tool menu and drill down into your account level statistics.

Clicks: Total number of clicks accrued today

aCPC: average Cost Per Click today

Cost: Total spent today

Conv: Total number of conversions accrued today

C/C: Cost per Conversion today

Requirements

-FF 2+ preferred while we’re confident this works from 1.5-3.0.*

-AdWords Client Center

-AdWords API Tokens

Tip: Your statistics might take 60 seconds or more to load depending on the size of your account. If you still do not see data, you may need to restart FF and test your credentials again.

How to Install This Firefox Addon

Upon download, Firefox should automatically recognize the extension and install it.

If you get any errors:

Right click the logo, click ’save link as…’, after saving you can scan it with any Anti-Virus program, then open Firefox. In FF, click file -> Open File -> Find the file and open it -> Install

How To Use PPC Management for Firefox

Credentials

Login Email: Your Client Center login email address

Password: Your Client Center login password

Developer Token: AdWords API Token found in your Client Center (My Account->AdWords API Center)

Application Token: AdWords API Token found in your Client Center (My Account->AdWords API Center)

Client Email: The email address of the account in your Client Center that you want to see stats for

Save your credentials, then test! Load is kind of a pseudo button for now…

Tip: You might need to restart FF after saving your credentials for the tool to work properly!

Keyword Estimates Tool

This tool is very similar to the Estimates tool you find in AdWords.

You don’t have to enter a Max CPC if you want to see the absolute maximum you can expect to pay with the highest possible bid ($100).

Keyword Tool (AKA Kewyord Suggestion Tool)

Search Volume and Competition are on the old scale…1 to 5 where 5 is very competitive or very high search volume and 1 is limited competition with a very low search volume relative to other keywords in that space.

In the future we will incorporate the new real number estimates currently available at Google.

Site Keywords Tool

Enter your landing page in the Site URL field and click Generate Suggestions to see what keywords Google thinks the page is targeted towards.

Account Statistics Tool

You can drill down to the keyword level statistics to find out how your account is doing for the day!

Double click your way through and new windows will open displaying the next level of statistics. For example, double click on a campaign to see the ad groups of that campaign in a new stats window. Then, double click an ad group to see the keyword stats!

Privacy and Security

We are confident that this tool is secure and your privacy is protected. semvironment will not and will never ask for or gather the information you enter into this tool. All of your credentials are stored on your local machine, not our servers. All AdWords API calls are made via https. This project is in beta right now so there aren’t any guarantees that a site you visit might have malicious material that could crack this…or one of your buddies could borrow your computer and get your credentials, etc. Please send any privacy concerns back to us asap so we can add it to our development time line as a priority!

Click this screen shot to see the details:

Special note: Every single link above the fold for the query ‘loans’ in Yahoo! is paid! Wow!

Check out what a normal business.com listing looks like:

Eerily similar, right? Business.com’s directory feed has been picked up by Yahoo! and stuffed into the organic results for quite some time now…or business.com has been using ’search submit pro’ for their directory feeds…I can’t confirm anything, just speculating here but I can say for certain that business.com directory listings appear in Yahoo! organic search results…so I wonder if Yahoo! picks up these extra links now as part of the package or does business.com submit them via ’search submit pro’ as part of their package?

Yahoo!’s Search Submit Pro is a program where you can get ‘organic’ results that are really ‘paid’ if you can spend $5K+ per month. The application process is quite rigorous because the quality level of the pages you want in the ‘organic’ area have to be extremely high – or so they say. These ’sponsored’ results are easy to spot as a paid search marketer or SEO but the general user probably does not or would not know the difference. You can spot these results by simply rubbing your mouse over the link and looking at what the status bar says at the bottom of your browser.

You might be surprised at how much those ‘organic’ listings could cost – they are profitable for business.com because they cost less than business.com does. I can say that I know from current experience that the top organic result for some insanely competitive keywords only costs .75 to $2 per click while the sponsored ‘non-search submit pro’ side of advertising would cost $5+/click for the number 1 spot.

eVisibility wrote about their new ppc management price model this morning…and I walked away shaking my head a little bit because I felt like they were attacking a majority of agencies out there (not us, thank you eVisibility).

It seems that there are three typical pricing models for ppc agencies out there: percentage of ad spend, performance based (% of net or gross profits, flat fee for sales/units sold, lead volume, etc) and hourly (eVisibility’s new pricing model). There can be hybrids too…so technically, there are quite a few ways to twist all the models into what you think is best for your agency or your company.

This is my personal opinion and view on each of the pricing models. But, I’m going to give away my bottom line first:

EVERY pricing model can work for the company that is outsourcing the function if the ppc management company is ethical, hard working and willing to manage based on their client’s key performance indicators regardless of the agency’s pricing model. I believe, without a doubt, that most agencies really care about their client’s bottom line, regardless of the pricing model. You build trust and authority with your client base, and deliver fantastic results then the natural course of action is for them to spend more and spending more leads to more sales at an acceptable fee – and if there is ROI, then the client will continue growing…and the agency will too.

Percentage of Ad Spend

This is definitely a tried and true model – and it fits for the traditional ad agency. If a traditional agency is expanding, then they can offer this function as part of their regular services and it would simply make sense to the client that paying this is like paying their traditional media company to do their media buys. It’s normal, it’s trusted and I’m confident this model will stick around for a long time.

Most agencies will not abuse their client’s budgets so for me, the idea that a percentage based model forces an agency to drive a client’s budget up so the agency can make more money is bogus for the majority of agencies out there. Sure, there are snake agencies in any pricing model and in any industry…ppc management isn’t an exception to the rule!

A lot of software and tools follow this model too. It’s an easy way to monetize ppc management services and it makes sense.

You can’t really deny that ad spend gives a company and an agency a hard figure to build a price from whereas the other models are a bit more abstract in nature while still highly competitive and viable.

Performance Based

I developed a thirst for thriving based on my performance which is why semvironment is performance based. I like to think of this model as a commission based sales agency – we’re in it to win it and the better we do, the better the client does…our pay check is directly tied to the client’s pay check.

This is another tried, tested and true model. How long have commission based sales people been around? It’s ancient history…longer than the % of ad spend model.

The key to success in this model is to identify the point at which the client is in complete control of the process and the agency loses control – or, the agency controls the process to what point before the client takes over? If the agency has a strong creative say in the entire shopping cart process, then perhaps the performance based pay should be transaction based or revenue based. Or, in the lead gen business, that point of control for the client is at the lead level – the agency does not control the sale of the service while they control the point at which a lead is generated…therefore, the lead could be considered the key fee point for the agency.

In any case, the performance based model is for those that can honor the system, are insanely hard working, and the client is willing to develop a “partnership”, in a sense, with their agency.

Hourly

Hourly is another model that is tried, tested and true. (Yes, every model is tried, tested and true…lol)

eVisibility has the explanation of this model right, I think. For me, the hourly model is like hiring an accountant or a lawyer. You might have the newest one on the block working on your account, but there is solid evidence that the firm is good at what they do so you essentially get what you pay for in terms of hours. It doesn’t appear to be tied to ROI or anything really…kind of like a regular employee. I’m really quite unfamiliar with this model, but it appears to work for several agencies out there and some clients are going to be happy with it.

Some might say it’s like hiring a consultant. I have only had positive experiences with consultants while others would joke about the ’snake’ consultants that are out there. Again, every pricing model is going to be riddled with snakes.