All seem to agree that 2009 will be the toughest year for business in many decades. Marketing budgets are being slashed across the board, and even pay-per-click (PPC) search -- the most accountable direct-response medium -- is not immune from cuts. But cutting your search engine bill can be a risky strategy, because cutting the wrong way can choke off your business' lifeline to customers. Think like a surgeon, not a lumberjack, when making cuts. Here is some advice on how to think about reining in your search engine bill.
1. Understand and apply the fundamentals
PPC search is a "zero sum game." A finite number of users perform commercial searches each day, with marketers bidding against each other to reach them. When you buy a click on Google and the other engines, you're buying these clicks away from your competitors. Marketers often fall into the trap of waging expensive battles for high-volume keywords within the search engine results page's "golden triangle" -- the F-shaped area on results pages where websites appear for optimal search engine visibility in both paid and natural listings -- without evaluating which positions actually convert best. Determining the answer to this question requires data, analytics, and a mechanism to put a conversion-optimized strategy into action on a 24/7 basis.
2. Pull all the efficiency levers
The best PPC marketers use all the tools provided by the search engines to eliminate waste. Conversion rates can vary dramatically by geography and time of day. The result is that you can save money by turning off your listings to avoid compulsive, non-converting clickers while bidding aggressively for those audience segments most likely to convert. Make sure that your bidding strategy thoroughly aligns with what you know about your audience. If you don't know enough about your audience to make these decisions, your efforts will likely be unsustainable.
3. Practice marketing jujitsu
The martial art jujitsu uses the weight and heft of an opponent against him. This ancient practice is relevant to PPC because the skillful position of paid listings allow savvy marketers to use the demand-building expenditures of competitors against them by stealing traffic at the moment it is most likely to convert to the competitors' offer. Pay attention to what your competitors are doing (both online and offline); you may not have to spend much to harvest this demand without having to spend anything on stimulating it.
4. Automate!
I don't think it's possible to execute any kind of cost-effective, sophisticated PPC strategy without automating the process. If you're bidding for any more than a handful of keywords, you'll drive yourself (or your staff) crazy trying to optimize your listings manually. Even if you are using a capable automation platform, PPC remains a labor intensive business. However, your scarce (and expensive) personnel will be performing strategic tasks, not mechanical actions better performed by machines.
5. Stay out of harm's way
In tough economic times, criminals and malefactors emerge from the woodwork. Click fraud auditor Click Forensics reported that click fraud rose to 17.1 percent in Q4 2008, the highest rate since it began tracking the problem in 2006 (Google questions the methodology used in the report, and claims that the figure is only 10 percent). Wherever the truth lies, there's no question that this tough marketing environment puts a premium on fraud detection/prevention. This means watching for unexpected changes in conversion rates, click volume, and click source, and taking appropriate actions to prevent budget damage.
Yes, it will be a tough year, and nobody knows how long the macroeconomic chill will last. But I have no doubt that marketers who are smart about PPC can seize powerful opportunities and be profitable, even in what seems to be the most challenging year the search ecosystem has yet endured.
Dave Pasternack is president of Didit, a New York-based search marketing firm.
