Should large PPC advertisers outsource their PPC management?

I thought I’d ask the question, and see what others think..

My 2 cents is that I think there’s a bright future for the management of SME accounts as many SME’s will seldom have the experience or expertise to manage their accounts effectively. The whole set up and learning of the adwords system and marketing in general, makes it an almost no brainer for the non experienced SME to go with a specialist agency charging reasonable fees.

There are of course tools out there like Kenshoo and Marin which make the process a little easier, but ultimately as a piece of software alone, lack the marketing nous and understanding that a human being can impart.

In order to broaden understandings for the less than familiar, it’ll be useful to take a quick look at a hypothetical scenario of spend, and adjust it against a reasonable agency fee and throw in a  PPC management and exec  salary that includes employer contribs, holiday cover and associated expenses of  a modest 75k per annum.

Granted, many of the models offered in the marketplace are a whole lot more sophisticated than what I’m using to illustrate ( management fee plus lower %, performance fees + management fee, pure performance, set up fees etc) but I think it’s still worthy of discussion.

Figures that are in green show a net benefit of using an agency, figures in red show the opposite.

1. Business spending 60k per year at 10% management fee = 6k additional expenditure
2. Business spending 500k per year at 10% management fee = 50k additional expenditure
3. Business spending 5million per year at 8% management fee = 400k additional expenditure

Some might say, ah but Rob it also depends on the size of the account, how many ad groups, keywords, reporting required etc and yes indeed, that all counts too, but in my opinion a good PPC person abley assisted by a competent executive should have all those tools in the box, assisted by tools like Kenshoo, the efficiencies gained are only  increased.

Options 1 and 2 for me, show that it makes little economic sense to go out and employ someone.  However, go above a threshold (80k) and it begins to get a little different.

It’s useful to look at the leak Google spend for a selection of US brands in June 2010 from http://adage.com/digital/article?article_id=145720 demonstrating that PPC spend levels for some companies are pretty impressive

• The University of Phoenix  $6.67 million
• Expedia – $5.95 million
• Amazon – $5.85 million
• eBay – $4.25 million
• Hotels.com – $3.30 million
• JC Penney – $2.46 million
• Living Social – $2.29 million
• ADT Security – $2.19 million

Other interesting features are that sub 200  spent  > 500k per month, 350 spent between 100k and 500k  per month, 1,356 spentbetween 10k and 100k per month. All in all pretty big numbers. As a commenter notes,  7% of spenders account for 60% of spend
26% of spenders account for 84% of spend.

And that’s just the tip of the iceberg, ad spend is expected to grow at continued rates as competition and awareness increases, moving companies and spend further up the numbers chart.

Ok, I’ve digressed slightly. Getting back to my point, at those levels, for the bigger spenders, why would you continue to increase your cost base, when you could reduce it through setting up in-house?

The days of smoke and mirrors are  coming to an end, the mists of obscurity are being blown away by the simplification of process and the proliferation of tools designed to increase efficiency and simplify bid management and reporting.

What is the future of PPC management?  Does agency have a future? Maybe the tools will marginalise the SME pot too, perhaps some other disruptor will come in and change it all again even,  what say you?

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Is that trackback link a pigs ear or a silk purse?

Did you ever look in your comments box and spot a trackback that had just your snippet and some anchor text of a site trying to rank for their target keywords? Of course you did! You probably didn’t approve it, but if you did then they got you and you are a sucker! Yet what is it with these annoying things? What is their point? Why don’t they just feck off and die a nasty somewhere?

Just this very day I received my own piece of trackback spam from a site that had been made to look like it actually added value.

The site itself had a sign up form, it talked about anti spam initiatives, it used words like community and participate, it gave account holders the option to review content requiring a sign up to view the reviews, it did lots of things that amounted to not very much. It was also butt ugly, and about as useful as a bacon sarnie at a barmitzvah. It reminded me of an old keyword stuffing project I played with some time back in 2004. Keyword after keyword after keyword supplemented with rss feeds and not very much else, and for very good reason too, but more on that later. It looked like the kind of site that you just wouldn’t really want to play in. It had no coolness factors, it wasn’t styled, it wasn’t anything really other than a big pile of texts beneath crafted titles designed to get search referals from people who knew not much better.

General Footprints and Red Flags

The site sending this particular trackback had obvious footprints, yet to some these might not have been so apparent. Not everyone looks at a site through cynical eyes, some just think ‘oooh a link to my blog, how cool’ and approve it, or worse still their blog is set to automatically approve such things.

Snippets snippets snippets

This is where it usually starts, you see a snippet a little like the one above in your comment moderation thing, you hop on over (usually out of curiosity) and find that chunk of your text in some long list of other chunks of text from other scraped rss feeds from other unsuspecting bloggers discussing similar things. No commentary, no context, just snippets.

Ads ads ads

You are also likely to see a huge smattering of contextual ads all over the shop, presented in a way that leaves you little option other than to either click an ad or hit your back button. Your reasons for interaction are limited by the lack of availability,followed very closely by the lack of motivation to do so – in essence you see very quickly that its a big pile of old crap.

Now to the person following this trackback, the semi or experienced blogger, the likelihood is that he’ll just hit his back button. He’d have seen the scraped snippets, muttered a little, (deciding it’s a splog )and left it at that. Just another one of those nonsense crap websites he’d be forgiven for thinking, yet in truth that would be about as far from the truth as you could get.

Splogging pays

These things, whilst limited in shelf life, really have a window of time whereby they earn people money. Some of these things do things like cloak the content to search referrals so that visitors don’t even get the sploggy content, instead just getting the adverts dressed up as links. Others put in sneaky noscroll attributes in the body tags and disable the history so that users have little other choice than to either hit the red x or click the advert to escape.

There’s a certain idealistic nonsense with the notion of so called ‘clean’ SERPs. Search engines like to wax lyrical about the integrity of their indexes, the natural search teams are big on extolling the virtues of their anti web spam mechanisms and creating the best experience for their users, whilst at the same time their revenue generation departments are continually looking at ways of getting their advertisers both clicks and eyeballs. It’s almost like there exists an agreement to continually disagree. There’s this very hot potato that is perpetually passed back and forth between the two departments, as these competing constituencies look to achieve their individual aims whilst continually frustrated by the requirements of the other.

Bad SERPs are Good versus Good SERPS are Bad

If we consider a notion that ‘clean’ SERPs = good user experience, and that too good a SERP = bad advertiser experience and that bad advertiser experience = low revenues, then we can begin to at least appreciate some of the reasons why sites that offer a poor user experience are allowed to thrive. We can also begin to attach legs to the idea that in lots of ways a SERP that contains an imprecise or mixed bag (think wikipedia, social media) of results that may not be as useful, might just help that user click on one of those contextual ads to the top or left of the results. Net outcome being, a dollar in the pocket of the search service.

All things to all men

I’m sure that there exists a mind or two in paid corporate search, whereby they dream of a time where every one of their top ten results is filled with a paid ad of sorts. Just think of a SERP that contained paid links for every single query! Wouldn’t that be the most phenomenal economically efficient use of it’s technology ever? Relevancy would shoot through the roof as advertisers clamoured for very specific keywords relative to their content, ad prices would rocket with SEO becoming little other than a quaint memory of some idealistic information retrieval system.

Imagine further, a world where every query had a page with a perfect score, or a page trying very hard to fit that perfect score and paying for the privilege too. We might even laugh and snort at such a conception as being completely ridiculous and unlikely, yet there is a reality that suggest that the continued upturn of investment in search and the web in general can only realistically lead to one outcome for both natural and PPC search. Those paying the money will cherry pick and invest in the keywords and topics that are most profitable, which will be those that are most easy to convert and monopolise and monetise.

The splog creators of today are the lazy version of the real content creators of tomorrow. Sites like Mahalo and wikipedia should be petrified by the likes of Google Knols a sure fire sign of where the minds at Google at least are seeing where the future lies. Heck, why return a wikipedic result when a knol of the same, can be plastered with contextual ads or subtle product placements.

Some might suggest that Knols has missed the boat already. A look at some of the SERPs of today reveals that there are a multitude of savvy site builders already seeing the benefits of associated keywords and themes; building traffic to serve the needs of people looking for information. Domains are skillfully leveraging their authority and trust scores to grow their content bases and SERP penetration, the traffic gained being used to get people to sign up to ideas, buy associated products, click on ads, make money. Every single day, the Internet becomes that little bit more commercial. Niches increasingly populated, hobbyists outdone by smooth sophisticated technologists doing the same, only better – web 2.0 versions of stuff already done. People like this certainly see the value and are actively advertising on knol based searches, already building preparing for the opportunites presented.

Idealism versus reality on a competitive planet

Of course it’s wrong to suggest that splogs and mashup real content creators are one and the same. They are not. Whilst they both share an equal objective of making money they are very different in one important and fundamental way in that one creates and adds value for itself and others, whilst one creates and adds value for itself alone. Therein lies the difference.

Should anything be done about companies creating real content for monetisation purposes? Isn’t it what the search engines want after all? Does it really matter that a better ‘free’ SERP damages their bottom line, or does the dichotomous nature of the factors that make up its business dictate that these are just a side effect of the business that cannot be effectively policed, not without some huge hue and cry from the publishers that benefit.

I find it a little amusing that despite all the crap, despite all the mutterings about how good content is defined as that which gives the user a better search experience and of how web spam is all evil and bad, the reality remains that these things continue to thrive, even though a responsible ad channel could reduce their raison detre in a heartbeat! Cut the ability to earn at its source and you instantly reduce the motivation to do so, right? Well perhaps not.

Impressions and clicks equals money in the bank.

Stock price is king – Despite all the words the fact is that these splog things earn them money. Forget the idea of SERP pollution, that’s just collateral damage which can be fixed with a periodic clean up; so long as the advertisers of their networks continue to see a ROI, then sites like the ones described will continue to proliferate.

What effect this will have on the whole web economy in general is up for debate. Perhaps the continual battles of the internal constituencies of the search engines themselves will help keep things in equilibrium. Perhaps it’s simply a case of one not being able to function without the other. A near perfect index, with near perfect results giving people too much choice and options would certainly lead to a diminution in click throughs to ads, whereas a SERP that went too far the other way would quickly lead to complaints and at worst lead to some altavista type meltdown of user base.

It’s a clever duck and it never stands still

What is abundantly clear is that splogs and the content that they use can be a complex moving target that is never that easy to pin down or eliminate. We can’t rely on others to deal with what is a problem for us all. We can’t dictate to the search engines that they shouldn’t allow such things to prosper as in most cases our individual voices will fall on deaf ears. It isn’t really in their interests to eliminate this stuff, and we shouldn’t be too trusting of them either. Sites labeled as thin affiliates know only too well the pain of arbitrary decisions, not to mention the individuals targeted for far lesser crimes.

As for the likes of me and you – Maybe it helps to bear in mind that we can make a difference, we can choose not to help them or make their lot easier. Look at your trackbacks critically, don’t accept them all carte blanche, take timeout to see what they are about, if you are about in forums or other blogs then think of who you are linking to and in what way, if you are a blog owner or forum operator then don’t allow these types of ‘visitors’ to use you to fuel this stuff. These people just crap on your doorstep and don’t care for the mess they leave behind. Don’t rely on nofollow to do it for you either as you never really know what power your link is giving them, be that today or a couple of years down the line!

Cheers

Postscript: I have to laugh else I’ might blub like a baby; can you believe that a mere 2 hours after writing this, 10 splogs are trackback spamming me for links, using my content and supplementing it with ads. Something tells me that RSS feed were never intended to be used in this way

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Before I say too much else I just wanted to say that generally in most cases I think it unnecessary to be too specific when highlighting the failings and flaws of others. It’s too easy to point fingers and say, oh look at how crap so and so is, or look at how so and so are doing that. In most cases it’s simply not necessary, you can say the same thing without making an enemy for yourself.

Why am I gabbing on about this? Well I guess I’ve been partially inspired by a piece by a guy named Loren Baker at search engine journal, a site I read regularly and most of the time simply love to bits. Yet today, I was left with a bit of a hmmmn taste in my mouth asking myself whether it was really necessary to out the guys he did in the way he did. In one fell swoop he has effectively smashed the revenue stream of one particular website ( or seriously diminished its efficacy) and no doubt condemned the sites advertising to declining revenue streams at some latter point.

The power of the written word eh?

Ok, so sure , anyone could have dobbed these guys in via a search engine report link, we all know that and hey perhaps people have already. The point is though that SEJ is read regularly has a hefty subscriber base what is written there is practically guaranteed to be read by Googlies and Yahoos and Msn search dudes. I don’t know Loren, so I can’t comment on the type of guy he is or even try to second guess his motives. At worst he might have a payday loans site at position 11 and at best he might just be as perplexed as us all by the apparent power of the noscript tag and authority domains and is wondering why this is still so effective, I expect it is the latter.

Where is the juice – Noscript tag or Authority domain?

To think that noscript content could have such an impact on SERPs in isolation would be pretty silly.

Lets get this straight right here right now. The noscript tag is no magic bullet. The examples highlighted at SEJ are not (or weren’t) sitting at positions 1 and 3 in Google simply because of a few links contained in a noscript tag, they were there because the sites that contained their links were from sites of multiple themes and disciplines all of which contained the hit counter code from Hitcountermaster.com.

False authority too easily attained

Why does (or soon to be did) Hitcountermaster.com have so much power and authority?

For those of you who may have been asleep for the past 3 or so years, domain authority in SEM terms relates to a domains ability to rank or convey link juice or pass pagerank. The idea is that if enough domains are linking to a singular site then it might well mean that the site or sites being linked to from so many different points (domains) in the web graph, could well be an on topic site for the keywords being used to link through to it. It’s one of the reasons why blogs and SMO sites are considered favourably in the search ranking fraternity. The idea is bolstered by the belief that individual bloggers are less interested in gaming search engine rankings than the minority of so called SEO’s and webmasters that are. The democratic effect of lots of people talking about a topic dictate that this social effect should be looked at and noticed and absorbed in any over all ranking score.

This all sounds somewhat perfect and idylic even. A meritocritous way of ranking sites from the social chatter ofweblogs and other live mediums. Harder to game, seemingly more reliable in any scoring system.

The applied semantic technology of old (we were told) was a vital tool for classifying content into its various themes and classifications. People have blogged and bragged about the importance of getting on topic themed links from related sources ( me included at some point I’m sure) yet when we look at that example it shows that in reality huge aspects of all this is bollocks. Forget your themed links from the right sites and directories, feck that, just go out and get any type of link from any type of domain that you can for your singular target keyword and…kazaaam, you’ll get the rank you want.

I was going to show what I meant further by using the Google link command link:http://www.hitcountermaster.com yet curiously it shows no backlinks already, I wonder why that might be

Anyways, not to worry we can use Yahoo’s site explorer with that funny old seo-rd parameter that they like to chuck in there and note that there are actually 2500 + reported backlinks for that domain. I can’t say whether this accurate or not as the SE’s may already have applied their SEO paranoid counter measures, but the point is, that a cursory glance over the sites shown reveals that domains that used the hitcounter code were from a very broad range of domains and blogs. They were not all from finance or loan related sites, in fact very very few of the sites discussed finance or laons in anyway at all!

Their backlinks came from .edu’s, .orgs, .coms, .co.uk blogs, websites about religion, books, wood, horses in fact you name it and there was probably a site of one sort or another linking back to hitcountermaster.com’s advertisers.

What it sreveals is that Google in particular doesn’t appear to work too hard in establishing domain authority. It seems to rely on numbers and not very much else. Why else would an uber competive term like payday loans be so easily and readily attainable?

Success for attaining payday loan SERP numero uno status was arrived at just like this.

1. Create a keyword domain that discussed finance and loan stuff within its content.

2. Get lots of links from lots of different domains with your ideal keywords

Yep, that was all there was to it. No need to get the right types of links from the right types of sites, just get links of whatever type and you are good to go.

So they went to hitcountermaster.com and checked out their advertising rates and happily used their advertising program to boost them up the SERP’s. Hitmastercounter.com had domain authority, built upon the juice conveyed back from the 1000′s of domains and sites that linked backed to it within their code. This told Google and perhaps other search engines that here was a site that was being linked to from lots of different domains and IP addresses. It must therefore, be some kind of useful resource and worthy of whatever authority score the algo decided to bestow.

Yet, if you look at that and weigh it against the idea of the social web and multiple voices linking to singular things with related keywords then you see that in this regard, hitmastercounter.com just shouldn’t have been in the same kind of crowd. It hadn’t done anything wrong, hit counters have been around long before Google or link text algorithms; it’s how they work, they sit on a site and link back to the mothership to read things like referals and times and dates and click paths.

So to me at least it shows that the whole ‘authority’ thing is at best a little weak and at worst completley and utterley underdeveloped. Why isn’t the algo detecting multiple same text incursions?

Why doesn’t it count the number of instances of keyword anchor text and decide that a number above a certain threshold or % maybe skewed and perhaps marked down a touch?

Why doesn’t it look insider the containers of where these links are found and make a judgement on that basis. In the payday loan example all of the links were inside a noscript tag! Yet, the algo again didn’t detect this fact and allowed the domain to rank for its keywords.

Why doesn’t it look at the placement of the code itself and notice a pattern? Whatever happened to the concept of Block Level Link Analysis?

The tactic as described is nothing new, there are 1000′s of others all doing the same. Just go to do a search on Google or yahoo fro free hit counter and see who is advertising. I’d bet that most are employing similar tactics to boost their own sites or sites of clients up the SERPs. It’s an exploit that is likely to be grown and adapted.

Is it going to be closed anytime soon? Hell, who knows. Surely it doesn’t take too much effort to say if link is this or that then discount its value. It makes you wonder what some of those search guys get up to all day…

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Communiques of impending doom 

According to Jensense Google are going to be disabling adsense accounts that are being used for MFA type sites.

Numerous AdSense publishers have been receiving emails from Google the past couple of days stating that their use of their AdSense account is an unsuitable business model and that accounts would be disabled as of June 1st, giving publishers about two weeks notice to prepare for the loss of the AdSense accounts

That’s big news, especially if you are one of these people who have gotten kind of comfortable earning what seemed to be a relatively easy buck.

Arbitrage in a nutshell

For those of you who don’t know what it is and how it all worked, the short explanation is that you’d build a site designed to get clicks from users on your adsense ads and earn a buck.

How you obtained the traffic varied. Some people used PPC (pay per click) programs to buy clicks at the lowest possible rate and filtered them through to a site with ads that attracted a higher payback. So if you paid $.05 for a click and got $.06 upwards back then you’d make a profit.

Google being the largest PPC player on the block means that exclusion from their program leaves a smaller pie to play with.

So what who cares, did anyone die?

Is there anything inherently wrong with this practice? Well, Google seem to think so, else why would they take this action. yet, it has to be said that people do similar things in different ways and different markets. Its called Capitalism.

It remains to be seen whether similar programs will take similar actions. They all make vsrious public pronouncements about how they like to protect their advertisers and add value to them and all that old hype, yet the reality is that in the case of Google for example they’ve happily just let the pennies roll on in for some years now without any real meaningful steps to curtail the process.

One can only speculate as to what actually drove this decision. A call to arms to clean up the SERPs perhaps? A cry from advertisers sick of low quality traffic. A general why should an external marketer be allowed to profit from our system using two sides of the same coin even. Who knows.

The bottom line is that the game has changed yet again.

Dealing with it and taking remedial steps

If you are a thin affiliate for example with product feeds and general low quality ‘find it everywhere else’ kind of content with adsense thrown in for good measure, then perhaps you too could find yourself on the receiving end of one of these unwelcoming letters.

Of course it could just be a public purge designed to bolster waning perceptions of ad quality and policing. Advertiser confidence is key to the success of any program. Advertisers using the adsense network don’t want to have low quality shitty visitors to their sites from people who had no alternative other than to click an advert, the view being that this type o traffic simply doesn’t convert. If advertiser confidence in the adsense network is improved then it follows that more will participate. More participants equals more revenue of course.

I can understand this too. On sites I run, Ive opted out of the adsense network from the off, simply because of all the low quality non converting crap I used to receive.

Don’t get me wrong, the adsense network can be great from a brand building and getting your url out there perspective, and it really does depend too on what kind of market sector you operate in. The big arber sharks of this world tend to target the highest paying keywords as these offer the biggest payback for them, perhaps an additional problem has been that as more people have gotten in on the act, this net has increasingly expanded downwards with arbers being forced into going for the smaller paying terms as the larger ones margins were squeezed.

On days like this, I’m glad I’m not an arber

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I was just over at tech crunch reading some of the broohah about some deal that fell through regarding performancing and payperpost and was kinda surpised at the level of snorting and derision being applied there. There is this guy named Ted, who like most people trying to get things off of the floor in life has managed to obtain $3 million dollars in funding for an idea, which he feels might just fly. So far he has managed to stir up a bit of controversy, with various high profile people like Matt Cutts coming out against the idea in general.

So ok, I can see why a search engine might have an issue with squillions of bloggers being paid to promote and talk about things using keyword rich anchor text to distort the search landscape but thats just tough I guess, they’ll find a way to deal with it, or mightn’t bother even, hardly the end of the world for mfa sites adsense now is it. Besides what with all this talk about mature algos and whatnot, I doubt it’ll make a huge difference anyways, a storm in a teacup even? Perhaps, or maybe some might see it as the thin end of a wedge. The lines get a little blurred when you think ahead and envisage a SERP full of results containing blogs that have been written on the basis of some monetary consideration. In those scenarios, where would the distinction between paid ads and paid ads masquerading as free serps be drawn? Should the search engine be held accountable for its editorial decisions?

Google or any other search engine for that matter wants their free SERPs to be full of stuff that is diverse and in some cases ‘untainted’ by the dirty grubby mits of commerce. Its probably why we haven’t yet seen paid inclusion rolled out yet, its full of issues pertaining to disclosure and ads. Y! for example once had a program that enabled you to appear in their results, provided you paid - it was soon dropped amid a wail of criticism.
A Washington Post article discussing word-of-mouth-marketing references a petition from Commercial Alert, an advertising and marketing watchdog group based in Portland Oregon and the response from the FTC associate director.

“The petition to us did raise a question about compliance with the FTC act,” said Mary K. Engle, FTC associate director for advertising practices. “We wanted to make clear . . . if you’re being paid, you should disclose that.”

So ok, no harm done then, if you are going to blog and get paid for your posts then you should disclose that somewhere – isn’t that what tinytext and footers are for .

I haven’t looked too intently at either ReviewMe or PayPerPost so have no idea whether or not they enforce disclosure in any toc’s. That said, the FTC is just an American governmental organisation with no jurasdiction or enforcement powers outide of the USA. The web is a big place full of other people from different countries and nome de plumes, and aliases. Gambling is still alive and kicking on the net even after a ban , some things just can’t be legislated away.

When people like Guy Kawasaki talk about how he made a paltry $3k adsense revenue from 2,436,117 page views then its hardly surprising when people not half as financially astute look for better earning opportunities. If you are one of these people who write about stuff daily on a topic close to your heart then goodluck to you if you can earn from it too.

The way I see it is that people will soon see through any posts that extol the virtues of some commercial lot of tosh. Try it yourself – try and get enthused on a daily basis for stuff that you don’t really believe in or want to talk about, see how long it takes people to switch off from what you are saying.

I think thats where reviewme could make a difference. I think they say to the bloggers, “here is so and so a company, they want you to write about them, they’ll pay you too, and you can say what you like as well” wheres the harm?

SE Reps to the back of the room please.

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