Pay Per Click Advertising from a SEMA Seminar

Slide 1
Hi, as Pat said, I’m Dan Jondron with Advanced Digital Strategies.
I have been teaching eMarketing for SEMA, other trade organizations and private companies all over the world since 1995. ADS provides eMarketing training and eMarketing services including Pay Per Click for companies in the Fortune 100 and many smaller companies all within the automotive aftermarket industry.

I am leading the eMarketing Panel at the Aftermarket eForum in Chicago in July. By the way this is a great venue for technology topics for our industry and I strongly encourage you to attend. You can talk to myself or Jim Spoonhower at SEMA for more information about the Aftermarket eForum.

My assistant today is Natasha Dennis from Sparkplugs.com, a wholesaler and retailer of sparkplugs, filters, shocks and Denso products. Natasha and I have worked to grow gross sales at Sparkplugs.com by over 25% in the last year through a combination of Pay Per Click, Search Engine Optimization, forum sponsorship, banner advertising and other eMarketing techniques.

OK, let’s talk about Pay Per Click Advertising.

Slide 2
Advertising Dollars moving to the ‘Net
Internet advertising is undervalued because there is a huge amount of content and therefore available ad space out there for any given topic, the internet is still relatively new and advertisers are just now learning to use it effectively.
Internet advertising allows you to create new and robust relationships with your buyers because you can provide instant access to everything that buyer wants and needs and it can’t be misplaced. It also allows you to narrowly target specific markets, and keep track of your user base. Internet advertising also allows you to inexpensively market products through whatever channels you decide to create. I can’t tell you how many companies are experimenting with selling direct, thereby shortening the supply chain and keeping more of the profits. Sometimes these companies are marketing their products through third parties or through subsidiaries that they have created specifically to hide their identities. One well-known company that I am working with discovered that over the Christmas season, they could sell direct to consumers using PPC and pocket an additional $90/unit sold.
Also, advertisers can track every mouse click and every dime they spend. With a magazine ad, you can run a special 800# for each ad and track orders per ad with some accuracy. With internet advertising, not only can you track the source of your orders, you can experiment with and hone your advertising message on a daily basis, if need be for maximum effect. This may be the strongest incentive for eMarketing projects.

Slide 3
Pay Per Click Advertising (PPC) is an online advertising format that allows you to buy your way to the top of search results pages for search phrases relevant to your business. Businesses buy advertising on specific search phrases, and are then charged each time a person clicks through to their web site. Branding is free. You only pay when someone clicks on your ad and visits your website. Again with magazine advertising, which I do use and recommend, by the way, circulation figures can only tell you how many people may have seen your ad.

Slide 4
Before you decide to spend your hard earned money driving additional traffic to your website, you want to first make sure that your online presence, or your store, if you will, is open for business. You may think this is a no brainer, but you would be surprised how often these issues come up and doing this work now will benefit your company in every advertising project you undertake.

Take a look at your website with a fresh perspective. Identify your various groups of users, identify their needs and within a reasonable budget provide for every need of every group of users of your website.

Look, customer service is still king in this industry. If you get new people to take a look at your website because they are interested in your product line, you might want to insure that you exceed their expectations by providing a nice looking website that answers all of their questions, provides great product photos and encourages them to return. If your website doesn’t meet these criteria you are really creating barriers between the customer and your company.

Lund International (look them up on the net) recently completed a careful study of their existing and potential website users and determined that these users could be broken down into distinct groups. Among others, they identified:
1. Consumers
2. Jobber/installers
3. Warehouse distributors
For consumers they provided things like branding and all of the components that worked to create desire for the product plus dealer look-up capability and live chat tech support.
For jobber/installers, they provided installation instructions and print and radio ads that the dealers could modify for their own businesses.
For WD’s they provided information on sales incentives, new products information and product availability. Are you impressed? By the way, you can’t see all of this functionality unless you are logged on as a dealer, but its there. In the first month since site launch, they have received something like 50 new dealer sign ups, so it is working. Lund will be presenting their findings at the Aftermarket eForum in Chicago next month.

Ask the people who use your website what it is they want and need. Ask a lot of them, ask them often and provide all of that information.

Mike Williams, a VP at O’Reilly Auto Parts tells the story of his search for a pressure washer. He did his research online, found several models that interested him and then went to the Sears website where he found specifications, drawings, photos, parts lists and online parts ordering, contact information for sales and service. The Sears model was significantly more expensive, but he bought it figuring that anyone who provided that much information would be there to service the unit after the sale.

Also determine what the purpose of your PPC advertising will be. What is a “sale” for you? For a retailer, you actually want to get the consumer to part with their credit card number and place an order. For a manufacturer, a ‘sale’ might be a dealer lookup, because that is as close as they can get to a sale unless they sell direct to consumers. Determine what action you want the user to take and what that action is worth to you. Is a dealer lookup worth a buck? 60 cents? Determine what a specific action is worth and that will help you budget your ad funds and track your success.

Shortest distance between two points.
As part of your PPC adventure, you get to decide what page of your website your advertising will link to. You can choose different pages for different ads. Again, if you are a retailer with a PPC promotion for a specific audio unit, you might have the advertisement click through to the page that describes the audio unit and has a button to add that audio unit to the shopping cart. You want to create the shortest distance between your PPC ad and the specific action you want that user to take.

In a few minutes we will introduce the ability for the PPC advertising to track specific actions within your website. These are called ‘conversions’. For a retailer, a conversion is when that retailer actually makes a sale. You can track the cost for each sale to the penny.

A couple of other notes. These website design problems are ubiquitous on the internet.

Contact info
Make sure you provide contact information for your company on virtually every page. If the consumer has a question prior to making a purchase, you want them to be able to pick up the phone and have their question answered. In our world of want products rather than need products, a moment’s hesitation could be a lost sale forever.

Eliminate confusing navigation
I was running a PPC campaign for a major manufacturer of audio equipment. The PPC ads clicked through to the page that highlighted the product and allowed the user to add it to the shopping cart, so that was good, but along the top and left side of the page there were 50 navigation elements that covered everything from Investor Relations to a biography of the company founder. Users were confused and often wandered off into a wilderness of company information and got lost. Keep it simple. Get the consumer to part company with their credit card number, that’s the goal for a retailer.

Site Looks Credible
One fellow who heard me speak last year at the eForum asked me to coach them on building website traffic. When I looked at the website, it looked like it had been designed by some kids with colored construction paper and crayons. My advice was for them to forgo Internet advertising until they had a functional website that looked professional.

Collect all relevant information
In this day and age of shrinking margins and costly marketing, it is senseless not to collect contact information at least for as many website visitors as you can. If they place an order, get their email address especially, if they don’t place an order, give them a chance to win a free t-shirt and again collect their contact information. The cost of acquiring a new customer is substantially higher than selling products to someone who has already expressed an interest. Every website visitor is a small chunk of gold for you company. Don’t lose track of them. In a future webinar, we will talk about email marketing, which is probably the best bargain in advertising today. How much does it cost to send out 10,000 brochures via the usps? With printing and stamps its around $10000. The cost of sending out 100,000 promotional emails once a month is close to zero.

Slide 5
PPC Venues
We have identified hundreds of sites that accept PPC advertising. The major ones are the ones listed here. The problem is that each site has a different user interface, different sign up and you have to keep track of your ads on as many sites as you are running PPC ads. This requires a substantial investment of time. I strongly suggest you focus on one of the larger ones for about 6 months, get your feet wet, learn what works and then expand your efforts to some of the others. I started out with Google and Yahoo, mostly because they were the first to offer PPC. Google has an easier interface, Yahoo has better key word tools. Google has a very tight set of rules for use of trademarked terms, Yahoo is a bit more easy going about such things. I guess I would say that they each have their pluses and minuses.

I have included one content site, Ten Magazines because they are a little different. They offer PPC advertising not by choosing key phrases to target but by type of product. They are also not a search engine, but a group of content sites and paper magazines that currently target the light truck market. They have recently acquired a group of enthusiast content sites for the import performance market, so they will address that market in the near future. Tenmagazines.com is the URL. I’m particularly excited about them because of the very strong targeting. I’m a big fan of narrowcasting. Average click through on a banner ad on the Net is .5%, we saw click through rates as high as 25% for Ford Truck ads on a content site that focused on Ford Trucks.

Each of these sites has a different user interface and due to technological hurdles, I am not able to show the interfaces here. The PPS site will ask you for all of the usual contact information and then walk you through the process of creating an ad campaign. They make it easy for you to part with your credit card number because they have done it right. It’s no tougher than acquiring an account at eBay, Barnes and Noble or your favorite online store.

You will find that in order to really examine the interfaces of the various PPC venues, that you will have to enter a credit card number to create an account. None of the search engines charge your card until you create an ad and have your first click through.

Slide 6
Here’s what you need.
1. A fresh crisp bit of plastic
2. a list of key words that you want to target
3. A compelling ad or group of ads related to your chosen key words
4. A great website
5. A great product

I can’t help you with the credit card, so let’s move on to the second critical point. Let’s look at key words.

Slide 7
Key words
Key words actually tend to be groups of words that you will select for your campaign. For instance in the case of sparkplugs.com, when a user enters the phrase “high performance sparkplugs”, or “ngk sparkplugs” a sparkplugs.com advertisement appears near the top of the page that displays the results of the users search. The search results page displays a combination of results from normal search algorithms plus a group of paid ads usually across the top and the right side of the page. These paid ads are PPC ads like the ones you will be running.

Selection of key words is of critical importance to your success. You will want to create a spreadsheet of these that will help you manage your campaign. The first step is to come up with a large group of key words related to your advertisement. Let’s stick with the sparkplugs example for this. Key words for your sparkplugs campaign might include the following:
Spark plug
Sparkplug
Spark plugs
Sparkplugs
High performance sparkplug
High performance spark plug
High performance sparkplugs
High performance spark plugs
NGK
NGK sparkplug
NGK plugs
Champion
Autolite
Denso

Note that in the first 8 keywords, I have attempted to identify both plurals and incorrect spelling or usage. You need to create a list that encompasses all of the possible uses of your potential key words. This is a one-time exercise that will help you build a tool that will assist you throughout not only any PPC ads you will run, but also for Search Engine Optimization and SEO tracking. This is a major asset to your company for all time, so do this work thoroughly. For sparkplugs, filters, shocks and Denso products, we came up with over 240 key phrases. You may actually come up with more than that. By the way, Natasha tells me that Google allows plurals and singulars and overture kicks them out as duplicates.

Slide 8
Once you have identified the ones you can think of, you can use a variety of tools, listed here to actually see how many times each month people use these key words and phrases to search for the types of products that you offer. Let me say this again. You can use the key word tools to see exactly how often users search for these phrases on the various search engines. Why in the world would you go out and build an ad campaign based on a best guess of search terms utilized by people searching for your products? This is a fairly common error. In addition people optimize their webpages for natural search results without researching their key words. You might end up optimizing your webpages or buying ads for the phrase high performance sparkplugs, when people are actually searching for the phrase racing sparkplugs, for instance.

Now, create a column in your spreadsheet, titled searches/month and enter the number of times these phrases are used from the results of your key phrase queries using these tools. Each of the keyword tools has different strengths and weaknesses. Although I prefer the Google interface for running ads, I prefer the Overture/yahoo key word tool to select key words, because it gives you other key word suggestions and tells you exactly how often they are used on the Yahoo search network.

You will have to decide which key word tool you like best, but base your efforts on facts, not conjecture. By the way, just because a key phrase is searched on less often, doesn’t mean that these keywords shouldn’t be used. You might find that prices are lower on less popular terms and that conversions are higher. You will just have to experiment. That’s what PPC is all about. Run small budgets at first, test every aspect and then eliminate those phrases and ads that don’t result in a ‘sale’ and expand those that do cost-effectively convert.

Slide 9
Write Compelling Ads
Most of you all are responsible for some or all the marketing at your companies and you know how to write advertising, right? PPC ads have some different limitations to them. For instance at Google, your headline is only 25 characters, then you get two lines that are 35 characters and the last line is your URL. All of the search engines have some pretty serious ad size limits.

Another difference with PPC ads is you are in new territory. The message that works in a magazine might be different then the message that works online. What you will want to do is to write several ads for each group of search terms and see what works. Here are some other guidelines.

Promotions do get attention. Let’s say we are choosing a group of key words targeted to sell struts to owners of Honda Accords. We chose the key phrases:

Struts
Gas Struts
KYB Struts
Accord Struts
Honda Struts
Honda Accord Struts
Honda GR2 Struts
Etc.

Obviously we could come up with another couple of dozen key words for this topic and as an experiment we are going to run with all of them to see how they do. Not only that, but let’s try writing 3 different ads for this same group of phrases and run all 3. We will find out in pretty short order what works and what doesn’t. In paper advertising, we talk about the value of appearing with some consistency in an ad venue over the course of 6 months or so before we review the results of the ad. With PPC, I recommend 30-45 days before you decide to make adjustments to your campaign.

Now we are going to write some ads. Here are 3 examples I found when I searched for Accord Struts.

Honda Shock Sale
Ppd Shipping, No Sales Tax, Save To
80%, Online Or Toll Free 8662862051
www.alleurasianautoparts.com

Accord Struts
Shop for Shocks, Struts & More by
Vehicle. Helpful Fitment Guide.
www.TireRack.com

Discount Products
Find a new car today.
Save on deals.
www.ebay.com

Let’s talk about limiting clicks from non-qualified customers. Let’s say your product is an upscale audio system that sells for $300. Do you want to write an ad that says how great your stereo is and have everyone who is interested in stereos click through to your website or do you want to state the price in the ad to limit click throughs to those customers who can actually afford your product. That is a decision you will have to make. I can tell you that at least at Google, the ranking of your ad (how high it appears on the page) is related to your number of click throughs. In other words, if you DO limit your click throughs intentionally, your ad may appear in 4th or 5th position even though your bid is the highest bid. We will get to bid prices in the next slide.

We all know about asking the buyer to take action. Call now, order today, limited time offer, etc. These calls to action are valuable and you can test them in your advertising and adjust as necessary.

Branding is free. You don’t pay for the ad impressions, as we have said before, so consider that in the construction of your ad. You may want to ensure that your ads help with your branding whether or not they result in a click through.

I think we have clearly stated that you are going to measure the results of your ads and adjust them and your key words to enhance your success.

Slide 10
Budgeting
In the early phases of your PPC campaign we are going to be doing nothing more than experimenting and measuring. Sure, you can go out and run full steam ahead with your campaign without this step, but you will be wasting a large part of your budget on phrases and ads that don’t convert.

Here’s a description of this experimental method. Let’s say you have a $10k budget for a 8 month campaign. You are going to run 240 phrases in 5 groups with 10 different ads in the first month. Let’s say this is costing you $2500 for the first month. Your results will be less than stellar, because you are trying every possible combination of phrases and ads in month one. In month two, you are going to check your conversions (sales) and find that 3 of your ads aren’t paying off and that half of your key phrases are absolute losers. In the second month you have dumped half of your key words and written 3 new ads. Your bill for the month is $1250. In month 3, you might decide to cut another 50 phrases and adjust your ads again. Your bill for month 3 is around $1000. You now use the remainder of your cash to run the ads for the following 5 months; you have maximized your ROI for these ads.

By the way, if your products are prone to increased sales during the holidays. Items that can be given as gifts, make sure you have a decent budget for the season. We sold $350 units at a cost of $8 during Christmas, they are now costing us $40 to make the same sale.

Let’s talk about bidding for phrases. If you look at any of the PPC interfaces, they will tell you what a particular phrase will cost you for top position. Conventional wisdom currently tells us that you want your PPC ad to appear in one of the top 3 positions. I’m not sure that this is true in all cases. Again, you will have to experiment. Let’s say that top position for Honda Accord Struts is $1.00 at Google. 2nd position might be 80 cents, third might be 70 cents. Remember that if your click throughs are rather low, your position might drop to #2 or #3 even though you are paying more than anyone else. I usually start out with a bid that puts me in #2 or #3 position on the larger engines and test the results. Experiment, measure and adust.

Slide 11
Content sites
Many of the larger search engines automatically include your ads in content sites. Content sites like Cardomain.com, which is a great site for banner ads also shows ads from the google network. You will be paying for click throughs from all of the content sites that display related google PPC ads. I personally have found that conversions from these Google content sites do not convert effectively and I tend to turn them off by default. Your results may be different. Again, you can run on both the search sites and the content sites and measure your results before you make a decision.

The extreme popularity of paying only for results has expanded into another content arena. Ten magazines is a large group of online truck enthusiast sites run by some former Primedia car magazine folks. Ten offers Pay Per Click advertising on its websites that work a little differently. You choose a product set like Tonneau covers and your ads appear next to articles about that particular product set. You don’t have to mess with key words, Ten takes care of that for you. I know that Ten has recently acquired a group of street performance sites, so you should be seeing PPC available on those sites as well. If anyone here knows of other content sites offering PPC, type the information into the question box and we will mention you as well. I personally haven’t heard of anyone else in our industry doing this.

Slide 12
Conversion Tracking.

We have alluded to tracking your conversions so far, so let’s cover this. Each search engine allows you to generate a bit of code that you can glue into your webpage that will help you track actual conversions or ‘sales’ if you will. If you are a retailer and glue this bit of code into your order confirmation page, the PPC system at the search engine will track every order confirmation per key word. This helps you track your sales per key word. If a ‘sale’ for you is having a use enter his contact information, you would glue the code snippet from the PPC system into your form submission success page.

By the way, studies show that most people research extensively before making a larger purchase. These people will click through, not make a purchase the first time and then come back to your site to make the actual buy. These sales will obviously not be tracked by the conversion code snippets unless they come through from the PPC ad when they make the buy.

Slide 13
PPC is a major initiative that is very popular. You will find extensive research and information on the net about this very popular topic. Here are a couple of sources.

Slide 14
Ditto

Slide 15
Reviews of popular PPC sites are available from these sources. The first URL is at PayPerClickanalyst.com, the second is at payperclickguide.com. These are the best we have found, but there are others.

Slide 16
You can exchange information and ideas through PPC forums at these following sites. The first one is our own Advanced Digital Strategies Aftermarket Forums. These are fairly new and cover all aspects of eMarketing and traditional marketing as well as data standards issues for the automotive aftermarket. The second is specifically information about overture/yahoo and again payperclickanalyst provides forums for this topic.

Slide 17
Conclusions
It’s relatively simple especially due to the fact that you can track every click and every dime you spend.

Slide 18
Questions?