"My current vendor is doing a great job and is taking great care of us” is something I hear frequently.  What they may actually be saying is “I don’t know what is going on, they are nice people and seem to know what they are doing”.  What if you knew exactly how to manage your PPC vendor?

 Here are a few tips:

#1. Define outcome: You are in business to make money?  You make money from selling products for more than they cost you (including fees to Google and vendor).  Know that cost and set a hard cost of revenue (Cost per Value) target and measure against that.

Fact: Recently most companies are tracking the revenues that comes from their AdWords ad spend, but 100% of the clients Finch starts working with did not use revenue data when deciding how much to bid for the next click. (hint: they are bidding for conversions (CPA) while expecting revenues (CPV).

#2. Keyword coverage:  You sell products, your prospective customer are searching for products; make sure your product titles, UPC codes, etc. are in  your keyword bank.  Ask the question and do spot checks.

Fact:  The average eCommerce company Finch starts to work with has less than 25% of their product catalog listed as keywords (hint: they ignore 75% of their market).

#3. Influence the Click-through-rate (CTR): Your CTR drives ad rank and how much you pay per click for a position.  Ad copy, extension use and best practices, and ad parameters are key components that needs both strategy and structure to isolate the variables in order to influence them.  Track the CTR on your top producing ads over time.

Fact: 100% of companies Finch starts working with groups keywords into an ad group with multiple ads associated with them.  Isolating a high impression ad with a keyword becomes impossible and optimization is simply not feasible.

#4. Leverage how Google AdWords really works: How Google AdWords works is really simple in principle, you pay them $1 and you get a click in return.  The challenge is that most your competitors are also willing to pay Google $1 for that same click.  That is why Google developed a highly sophisticated auction platform where they sell clicks so that you can bid more or less.  In addition Google developed a very sophisticated “black box” called Quality Score that for all practical reasons enable them to calculate which ad will give them the best click probability/revenue combination.  That is what is called ad rank, you must have a strategy that you are executing against.  

Fact: Exact match clicks have a higher CTR, fewer clicks means you are willing to pay more per click, higher bid/CTR gets a higher position which triggers top 3 ad features (extensions), which again gets a higher CTR, driving a higher quality score, resulting in a higher ad rank (better and more clicks for less).  

#5. Google feature adoption: There has been more changes and enhancements to Google AdWords the past 18 months than the previous 10 years combined.  This is more visible in the Ad than anywhere else; i.e. all extensions give you more real estate on the SERP (search engine results page) which means your competition gets less.  Product listing ads best practices, remarketing for search configuration, bid adjustments on ad group level in the new Enhanced Campaigns (i.e. Desktop vs Mobile, Re-marketing for Search bid adjustment for different shopping stage profiles).  Early adoption is key to benefit early and before others, proven best practices are key over time to remain competitive. 

Fact: The above best practices can influence your CTR and profitability by over 50% just by turning on a feature, turning on all of them with best practices will change your business as it has done for most of our clients.

Bonus #6: Check your log file to monitor the vendor activities (bid changes, Ad changes, keyword additions, etc.)  

Fact: If you pay a vendor by the hour you will see a lot of activity, if you pay a flat fee or a license you will see limited activity.  Unless you pay for performance in a model where your and the vendor’s outcome is aligned, one will always try to get ahead of the other.