Considering automated solutions for your paid search accounts? Columnist Jacob Baadsgaard lists the six questions you should ask yourself when deciding whether to invest in paid search management software.
On the surface, paid search management software has all the glitz and glam of a new-age technological marvel. It’s sleek, it’s chic, and it takes the guesswork out of your account management. After all, humans make mistakes — computers don’t. Right?
Well… maybe that’s giving them too much credit.
Automated account managers are often sold as more intelligent than they really are. Unfortunately, when you buy paid search management software you’re not getting Iron Man’s “Jarvis”…
… you’re getting a trained monkey.
Now, there are advantages to trained monkeys, don’t get me wrong. They’re great for predictable, menial tasks, and they’ll work for bananas. But you’ll want to think twice about how much of your business you hand over to them.
So, if you want to avoid monkey business in your paid search account, here are six questions you should consider before signing off on paid search management software:
1. Why am I doing this?
The first thing you need to ask yourself is why you are actually considering the software purchase.
Bad reason: “I want to keep up with the Joneses.”
So a salesman told you that he’s set up software with all your competitors. You’ll be left behind if you don’t follow suit, right?
Everybody wants to keep up with the competition, but just because monkeys are all the rage, it doesn’t necessarily mean your company needs one. In fact, if all your competitors are switching to automation, a personal touch on your account may be just the edge you need to pull ahead.
Bad reason: “I don’t want to have to worry about my account.”
If the real reason you’re considering software is to get your paid search account out of sight and out of mind, you need to reconsider now!
You can’t just set your paid search aside and assume it’s making money. Even paid search accounts with high-quality automation require frequent supervision by a human being to make sure that everything is working the way it should.
Remember Mickey Mouse as the Sorcerer’s Apprentice in from Disney’s “Fantasia?” The automation you put in place when you were awake may cause trouble when you turn your back on it.
If you’re hoping that a software solution will get your paid search results out of the gutter, think again. Get your account running effectively, and then consider using paid search management software.
Good reason: “I have a complex account and need assistance with basic tasks.”
All this being said, if you’re committed to staying involved in your online marketing but you have a big enough account that you feel that you’re spending a lot of time and money on jobs a trained monkey could do, then you might benefit from an automated solution. (Another option is to simplify your account, but I’ll get to that later.)
2. Can I report on marketing revenue?
Your software monkey will do anything you tell it to. If you say, “Get me more clicks,” it will modify your account to maximize ad clicks. If you say, “Get me more conversions,” it will optimize for conversions.
But are these what you really want? Successful companies don’t advertise to get clicks or conversions — they advertise to make sales.
Sure, clicks and conversions are good indicators of successful marketing, but they’re not quite the same thing as revenue. In fact, clicks are the part of paid search advertising that cost you money. Hire a monkey to get you more clicks, and you could be headed for disaster.
Before you consider a software account manager, you should be sure that you can track the revenue your marketing generates. How you approach this depends on whether you sell directly from your site or not.
For e-commerce businesses, connecting marketing and revenue is very simple because a sale is essentially the same thing as a conversion, and most paid search platforms offer easy ways to track conversions.
In Google AdWords, for example, you can add a script to your page that will let AdWords know when your site makes a sale. You can easily see how many sales your ads are producing in AdWords and optimize for maximum profit.
You can find this function in your AdWords account under Tools > Conversions > New conversion action:
If conversions are sales for your business, then you’ve got it easy. Just set things up right, and you or your software can easily optimize for sales.
Other business models
For many other businesses, however, things are more complicated. Sales often take place in person, on the phone or after several different types of conversions (calls, chats, form submissions and so on). In these cases, linking paid search marketing to actual sales is no less important, but it is a little more involved.
I’ve seen clients use several different approaches to solve this problem. Some use customer relationship management (CRM) software like Prosperworks, Salesforce or Zoho. Others create their own CRM. Still others keep track of things manually in an Excel spreadsheet or other digital medium.
Regardless of how you track your sales, simply tracking them will do wonders for your business — even if you aren’t using management software.
In fact, simply tracking sales will put you ahead of most of the competition. Only 58 percent of businesses track any sort of paid conversions, just 29 percent of them do it well, and a mere 21 percent track all the way through to return on investment (ROI).
The question is, how does that affect your campaign performance?
Well, according to Hubspot’s State of Inbound Report, if you aren’t tracking ROI, your marketing campaigns have a 97 percent chance of failing. So, if you aren’t tracking paid search performance through to sales, paid search (with or without the software monkey) probably isn’t for you.
However, if you are tracking your ads from click to close, you can use that data to optimize your campaigns for maximum revenue and profit.
3. How many conversions do I get?
Up ’til now, I’ve called paid search management software a “trained monkey.” Unfortunately, I don’t mean a pre-trained monkey.
If you’ve ever trained an animal like a dog or a horse (or a kid), you know that it takes a lot of repetition. An animal can figure out patterns, but it has to see the good and bad consequences of each action again… and again… and again.
The same goes for the paid search monkey, except that managing multiple online campaigns is a tad more complicated than “Roll over, Fido.”
As a rule of thumb, it takes about 50 sales or conversions per day for your software to figure out what works and what doesn’t. So if you’re not driving this many leads, you’re probably better off putting some TLC into improving your account performance before you try handing it off to a computer program.
4. Does my account really need this software?
Needing automation and wanting it are two different things.
Management software handles the mundane tasks of an account: increasing and decreasing bids, generating reports, suggesting new keywords, creating text for ads and so on. In large, complex accounts, there can be a lot of these tasks to do, making a computerized monkey more cost-effective than a human being.
But what do I mean by “large accounts?” Sure, you might be spending tens of thousands of dollars a month on paid search, but a big budget doesn’t always equate with a complex account. I’ve seen effective accounts that spend over $100,000 a month on a handful of keywords.
In general, regardless of ad spend, if you have less than 10 campaigns and 100 keywords, you’re probably just fine to run things on your own. However, if you have hundreds of campaigns and thousands of keywords, you might be better off delegating some of your day-to-day management tasks to a software program.
That being said, you should also consider whether or not your account really ought to be so complex. Are all those keywords actually producing? Chances are they’re not.
After auditing over 2,000 AdWords accounts, I’ve found that, on average, 100 percent of conversions and sales come from just six percent of an account’s keywords!
Of course, if you have great analytics in place, it’s not too hard to figure out which of your keywords are unproductive. Eliminate them, and you’ll save a save a ton of money and make your account a lot easier to manage.
However, if you’ve trimmed the fat from your accounts and still have a lot of keywords and campaigns, then by all means, pay for software.
5. Could a monkey figure out my business?
All businesses are both a science and an art to one degree or another, but if marketing your business is more “art” than “science,” your marketing may need a more personal touch than a software package can provide.
For example, if you are in the fashion, entertainment or consumer technology industries, trends may change so rapidly that you have to predict the “next big thing” to stay abreast of the market. If you hand your advertising over to your trained monkey, he’ll need a lot of data before suggesting new keywords, so you’ll always find yourself on the tail end of the wave.
Automated account management can also make a monkey out of companies that rely on seasonal sales.
Consider the travel industry. If you sell vacation packages, the keyword “spring break” might be highly profitable during a very short window but get few hits during the rest of the year. When the software sees how poorly “spring break” performs for rest of the year, it will conclude that it’s not worth your money and decrease your bids. Then, when buying season comes around again, you’ll have lost a big money-maker.
Paid search management software does best with consistency. This isn’t a problem for many businesses, but if there’s a lot of art to your advertising, then you’ll want to think twice before handing a chimp the paintbrush.
6. Can I get this for free?
Last, but not least, if you’ve gotten this far and feel that automation is a good fit for you, then consider this: Do you really need to pay for it?
In recent years, platforms like Google AdWords and Bing Ads have added a lot of basic account management features like automatic bidding, pausing ineffective keywords and sending email alerts. So before you run off and buy an expensive software package, it’s probably worth your while to look into these native features and see whether the functions on your wish list are already available for free.
This solution isn’t as chic as buying software, but paid search management style points don’t fill your sales queue.
By now, I’ve probably run my “trained monkey” analogy into the ground and you’re starting to think, “You’re getting a little extreme here — paid search management software can be a lifesaver, Jake!”
You’re right. Paid search management programs have some powerful computing ability and many wonderful features.
However, the point I’m trying to drive home is that these software solutions aren’t a replacement for a skilled marketer. They are very beneficial when they’re doing the right jobs for the right company. For the wrong company, they’re a waste of money and may end up doing more harm than good.
The only question now is whether your business is right or wrong for paid search management software.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.