Jeremy Mayes recently discussed the ad placement option in Google AdWords’ Content Network. He seems to think this is going to be good and, in his words, more efficient. But will it?

I think it might. The gist of the new feature allows advertisers to specify a particular web property they want their ads to show up on only when a certain keyword appears on a page or to raise your bid when a particular keyword when it appears on a certain web property. With the last option your ad will appear across the entire content network, but clicks will cost you more on the property that you specify when setting up the campaign. This allows you to make value judgments about particular content sites within the network. It’s actually a pretty useful feature. But how should you use it?

As stated above, there are two ways to use this feature. First, if your keyword is a low-volume keyword but there is a specific website that it would work extremely well for because of its narrow niche then you can specify that you want your ad to show up on that site on pages that use your low-volume keyword.

The second way to use this feature is to identify specific websites where a keyword is extremely valuable and to offer to pay more for clicks from that website. If you notice that you are getting a lot of clicks from a particular web property and that those clicks are converting well then you might use this option. Lower your bid across the content network but use the placement feature to keep your bid at the higher amount on that web property that is leading to greater conversions.

Here’s an interesting chart showing the average CPC by vertical.

It’s interesting that the CPC for all of these industries is in an upward trend except for the automotive industry. I wonder if gas prices have affected this. If the automotive industry is declining because of lower auto sales and smaller vehicles selling more while larger vehicles selling less then that is very telling for the economy. But even more telling is the increase in every other industry.

The mortgage and auto finance industries have increased - tremendously. Dating, travel, and retail have only slightly increased. I believe these numbers may also reflect more competition as a whole in each of these industries. The travel industry has always been competitive, but fewer people are traveling these days since the cost of fuel is rising. That probably explains why the travel industries CPCs are not skyrocketing. On the other hand, to avert foreclosure, many homeowners are refinancing. That would equate to a huge increase in the competitive field of mortgage financing, driving CPC prices up.

When you plan your budgets for advertising and you are in an industry where CPC is going up, you need to account for that fact. As CPC goes up, you will get fewer clicks for the same number of dollars in your budget. Will that affect your conversion rate and ROI? You need to know.

The Yahoo! Search Marketing Blog recently told its readers not to shoot for the No. 1 ad spot in every instance. I can’t think of any better advice for a search engine pay per click blog to give. In other words, the could just have well said, “We love your money, but not so much as to see you throw it down the PPC drain and never get it back.”

The search engines have an incentive for seeing you be successful. If you make money on your PPC campaigns then you’ll spend more of it on advertising.

The No. 1 spot, as Noah Belson says, is not always the best spot. When bidding on your keywords, only bid on the keywords that will deliver you the most conversions. General keywords will usually cost you more and will usually provide you fewer sales conversions, draining your budget and not giving you any sales, lowering your ROI. You might even end up with a negative ROI.

Do your keyword research carefully and figure out which keywords are most profitable for your campaign and use only those keywords. Then bid on them optimally so that your ads run longer. This will increase your chances of realizing a positive ROI.

You’ll hear marketers often talk about long tail keywords. Many of them will recommend that you focus your PPC campaigns on the long tail keywords simply because they are less competitive. But should you follow this advice?

Think about this. A long tail keyword may be less competitive, but the reason it is less competitive is because fewer people are searching for it. It will also be less expensive to bid on. There are several things to consider before you decide to bid on those long tail keywords:

• Budget - How large or small is your budget? If you have a small advertising budget then the long tail keywords might be more affordable for you. They could be a good place to start. But if you have a larger budget then you might consider bidding on the general keywords to tap into their popularity.
• Importance - Importance of keywords to your niche is a very important consideration. If a long tail keyword doesn’t match your business model then it doesn’t matter how competitive or inexpensive it is. It makes no sense to target the wrong keyword. On the other hand, if a long tail keyword is the perfect keyword for your business where the generic keyword might be too broad then it really doesn’t matter whether you spend 10 cents per bid or $1 per bid, the right keyword is the right keyword.
• Business goals - What are you trying to accomplish with your PPC campaign? Are you looking for conversions or opt ins? What are you selling or promoting? Does it appeal to an audience that is more likely to search for the long tail keyword or the general keyword?
• Targeted repelling - It is just important to repel the wrong people as it is to attract the right ones. Does the long tail keyword do an effective job of convincing the wrong market not to click on your ad? If not then it may be the wrong keyword. If so, on the other hand, then it may be the right keyword to target provided that other factors are considered.

These are by no means the only considerations you should have, but these are important to consider when determining whether the long tail keywords hold value for you. It may be that you want to target some long tail keywords and the general keywords that are more expensive to bid on. Take a look at all the angles and make a decision based on what is important for your business.

You may have heard of demographic bidding, but what is it? In a word, demographic bidding allows you to specify a particular age group or gender for your ads. If you sell feminine products, for instance, you don’t want to market them toward men so why not use demographic bidding to narrow the audience to which you target your ads? You can take advantage of demographic bidding in two ways, through keyword-targeted and through placement-targeted campaigns.

Keyword-targeted ads will appear on content network websites based on the keywords that you choose. For example, you might choose “feminine hygiene” as your keyword phrase. Your ad shouldn’t appear on content network sites that are targeted toward a male audience.

Placement-targeted allows you to select specific sites that you want to see your ads appear on. For instance, if you want your ad to appear on a specific website geared toward women and you know that website allows ads from the content network then you can tell Google AdWords to show your ads on that website. This allows you to tap into the target market that you know exists on that niche website.

To take advantage of demographic bidding you simply add a % of your bid for a particular demographic group that you want to bid on. So if you want to target your ad toward the 50+ age group then you’d enter your bid (let’s say, $1.50) for your keyword then add a percentage (let’s say 100%) that you are willing to pay extra in order to capture that target market. Whenever your ads appear for that target market then you’ll pay up to $3 per click instead of $1.50 for the non-targeted keyword clicks.

Keep in mind that these ads will only be shown on sites where demographic information is tracked. If a website doesn’t have stats on their users then it won’t apply. But many websites do track demographic information so this could help you.

If you find your PPC campaigns reaching their daily or monthly budget caps sooner than you’d like then perhaps you should tweak the settings on your campaigns to make them run longer. Here are a few ways you can stretch your budget our further:

• Budget Per Day - If your monthly budget is running out too soon then try setting a budget per day. If your monthly budget is reached in the middle of the month and you’d like your ads to run all month long then a daily budget can stretch that out. You’ll have fewer ads running each day and when you reach your daily budget the ads will stop running for that day. But they will run every day throughout the month.
• Set campaign settings to stretch the budget out - You can also set your campaign settings to pace your ads throughout the budget period instead of pausing the campaign when you reach your budget. If you set your settings to pause when your budget is reached then your daily budget might be low enough that you reach it mid-day. Your ads will then stop running at that point when you hit the budget mark. But if you set your campaign settings to run your ads throughout the day then you’ll miss some opportunities in the middle of the day but your ads will not pause until the end of the day. They will be paced throughout the day based on your keyword bids.
• Use negative keywords - By including negative keywords in your campaign settings, you’ll keep your ads from appearing for keywords that you do not want to bid on. This will cut down on unwanted clicks.
• Narrow your match types - Instead of setting your campaigns for broad matches of your keywords, narrow your match types. This will also cut down on the number of times that your ads run and eliminate unwanted clicks.
• Establish a time of day - Is your peak conversion time in the evening or the middle of the day? You can set your campaign settings to keep your clicks active during your peak conversion times. Establish a time of day that your ads run and eliminate unwanted clicks. This will also save your budget for that time of day.

If you want to make the most of your pay per click advertising then you need to start tracking your conversions. Google AdWords makes that easy with its free conversion tracking tool.

As explained on the Inside AdWords blog, by tracking your conversions by keyword you can narrow down which keywords are converting better for you per landing page and per product. Then you can use that information to bid on keywords that deliver more ROI. You can actually bid higher on those keywords that you know convert more sales and bid lower on those keywords that don’t. It’s a very powerful tool for the serious advertiser.

Google AdWords has recently updated its conversion tracking tool to help advertisers do a better job of watching their conversions and increasing their ROI (isn’t that good news?). You can now define and track types of conversions. Just click on the Conversion Trackink link in your account to use the tool and start optimizing your landing page and your ads for better conversions.

You may notice from time to time that your minimum bids move. If you’ve had a PPC campaign that all of a sudden stopped because your ads no longer met the minimum bid for the approval process then you’ve likely been frustrated by that. Yahoo! Search Marketing has a solution for you that will help you keep an eye on that minimum bid.

When you log into your account you should see a notification that lets you know your ads no longer meet the minimum bid. Let’s say you bid 10 cents for your keyword and the minimum bid is 13 cents. On your user interface within the advertising management system, you’ll see your actual bid and a red note one field to its left telling you that your bid is too low. Right below the red type you’ll the the actual minimum bid necessary to keep your ad active for that keyword.

What you do is log into your account and click on the Keywords tab. If you haven’t seen that before, it’s because that’s a new tab. But it lets you see all the keywords for your PPC ads no matter which campaign they are associated with. That’s a cool tool. Now you can see the minimum bid information described in the last paragraph. You can either raise your bid or let your ads pause for awhile. An easy way to manage all of your keywords at a glance.

Another cool feature of this new tab and new reporting tool is that your ads do not automatically go inactive right away like they do with Google AdWords. Instead, you have a grace period during which if you raise your bid to the minimum then your ads will never pause. You won’t lose a beat. If you do not raise your minimum bid, of course, then your ads will pause, but you at least have the grace period.

While your ads are pending inactive, you can raise the bids for your keywords to the minimum necessary to keep them active, but the minimums are just that. They are not minimum bids for competitive purposes, only minimum bids to keep the ads active. So be sure to remember that.

I’ve given it a lot of thought and I’ve come to the conclusion that it doesn’t always pay to bid on your own brand. Sometimes it does; sometimes it doesn’t. So when should you not?

Well, there are no hard and fast rules. Every situation is different so we can’t say definitively that you should should always or should never bid on your own brand. But there are principles that we can employ.

For instance, if you have the top organic listing and no one else is bidding on your brand then you might very well be throwing money away by bidding on your brand. You could draw clicks away from your organic listing. On the other hand, if you do have competitors bidding on your brand then you need to bid on it as well. Otherwise, your competitors could be stealing clicks away from your listings. You need to protect your turf.

Another thing to consider is your affiliate policy. You should put it in writing that your affiliates cannot bid on your brand. There is nothing in the law that prevents them from doing so. If you don’t have a written policy for your affiliates then you’ll find yourself in the position of trying to stay ahead of your own affiliates for your brand name. While you’ll see your business increasing through the success of your affiliates, you could also be paying out more in commissions if you let them beat you in the bidding process. To prevent that, have a written policy that stops them from bidding on your brand and make sure the penalty is a loss of affiliate status if they do so. Protect your brand at all costs.

You know all about pay per click, but what is pay per action? Pay per action is the new model of advertising that has yet to be implemented, but I expect it to start becoming more popular over time. Essentially, pay per action allows the advertiser to bid on certain self-defined actions. Like pay per click, you’ll get to bid based on the value of the action and compete with other advertisers on a like-action basis. The actions that you bid on depend on what you want ad clickers to do once they arrive at your website.

For instance, are you trying to get them to sign up for your free e-zine? If so, then you’ll bid on that action. If you want them to make a purchase then you’ll bid on that action. If you don’t care what they do when they get to your website as long as they get there then you might bid on the consumer simply clicking your ad. Whatever action you define is the action that you’ll bid on.

How will you make money on pay per action advertising? Well, much like you do with pay per click. You pay X amount of dollars for your advertising and you make X amount of dollars in revenue as a result. The difference is your ROI. But how do you measure ROI on actions that may or may not directly influence it?

An example might be a video that you have produced for marketing purposes. You bid .05 for every consumer who clicks to watch your video. But the video’s goal is to get people interested in your website landing page. They go to the landing page and buy a book. Let’s suppose that of every 20 people who click to watch your video (translates into $1 ad spend), 50% go to your website’s landing page to read about the book you want them to buy. That means you have to spend 50 cents just to get people to read your sales literature. Out of those that visit the landing page, let’s assume that 10% buy the book, which sells for $10. Let’s break it down:

• You pay .05 per click
• 20 people click your video to watch
• Your ad spend is $1
• 50% of video watchers go to your landing page
• That translates into 10 visitors who read your sales literature
• 10% of 10 visitors translates into sales (1 person) at $10 a pop

Conclusion: You spent $1 to make $10.

You can do this kind of analysis with any action. But first you have to define the action and set a price. The bid price should be related to how much the action is worth to you. In the above scenario, I would raise the bid on the action to see if I get any more sales. I can double my bid and end up spending $2 for advertising. If I don’t sell any more product them I’m still profitable even though my profit won’t be as large. But if I sell just one more book based on the new ad spend then I’ve increased my profit:

• $1 ad spend = $10 in sales; $9 profit
• $2 ad spend = $20 in sales; $18 profit

The key is to find the optimal bid price that will allow me to maximize my profit. If I keep raising my bid price to see at what point my sales start to decline or level off then I’ve found the optimal bid price and I’ll leave my bid per action at that price.

Managing a pay per action campaign, when that option becomes available through the current advertising companies, will be much like managing a pay per click campaign except that you as advertiser will have more control in defining the actions that are important to you.

It’s controversial and some people don’t like it, but one effective way to gain a foothold in pay per click advertising - especially if you’re just starting out - is to bid on your competitions’ key words, even their trademarked brand names.

Like I said, it’s controversial and some people don’t like it. But it works.

That’s why Google is changing its policy in the UK and Ireland. Well, it may not be exactly why, but if you read between the lines, what Google is saying is that they are interested in doing what is right for their search users. In other words, if it’s good for searchers then it’s good for all of us.

How can this be good for searchers? Because it helps them find what they are looking for.

Suppose you are a new start up manufacturer of laundry detergent. If a user types in Clorox then they will get a bunch of search results for the laundry detergent manufacturer. Some will be the Clorox web site itself and others will be third parties talking about Clorox. Those will be in the organic search results. But what about the ads on the side and top of the page? Those will consist of businesses that have bid on the word “Clorox” as a keyword, and anyone can bid on any keyword.

So how you can benefit?

You can benefit by bidding on “Clorox” as a keyword then write an ad that says something like:

No, we’re not Clorox
Our detergent is better

Cheesy and sleazy? Maybe, but it does work. Trust me. It works.

Conversation Marketing had an interesting blog post on bidding on your own brand name. But I’m not sure why you’d slip from organic rankings for your own name:

1. It’s cheap. Pay Per Click engines’ quality scoring algorithms mean you’re likely to get the best deal on your own company and product names. That translates to lower bids.
2. It’s insurance. If you slip from the organic rankings for a day or two, your paid ranking will maintain your presence.
3. Chances are, someone else has your name, too. You’re probably not the only ‘Acme Co.’ on earth.
4. If you don’t bid, competitors will. In the United States it’s perfectly legal to bid on competitor product and company names. It happens all the time. You can easily outbid them, though, thanks quality scoring (see #1)
5. Did I mention it’s cheap?

Nevertheless, these are good points. By bidding on your own brand name, you should be able to get top quality advertising for lower cost. You’ll certainly get lower bid prices than your competition, who are likely bidding on your brand as well. This is a legitimate competitive strategy and it happens in Pay Per Click all the time.

Google’s quality score is based largely on your optimization efforts. Since your website is optimized for your brand name (or it should be), you are likely to have a higher quality score than your competition for that phrase and therefore a lower bid price. Plus, if you’ve done a good job of branding then that Pay Per Click ad should pay off as people search for your brand online. This is especially true if you have a website address that is not an exact match for your brand name. For instance, if BrickMarketing.com had already been taken and I had to choose another domain name - let’s say, brickmarkco.com - then there is nothing intuitive about people typing that URL into their browser to find the company. That is just one more reason to bid on your brand name.

I like this quote from the PPC Blog:

Budget caps are there to prevent you from overspending as a safety precaution and are not a primary method that should be used to control spend.

There is an important distinction between using budget caps to keep from overspending and to use them to control advertising spend. I agree with the pay per click Blog when he says that anyone who is not a beginning pay per click advertising should not control ad spend with budget caps. That’s what your CPC is for.

You must decide whether it’s more important to you to get your ad in front of more searchers or to see it higher in the ad positioning on the SERPs. To rise higher in position you’ll have to raise your bid, but if you have a budget cap then your ads will stop running sooner during the day and your ad will be seen by fewer searchers. On the other hand, if you lower your bid you will see your ad appear lower in the ad positions but more often. The result will be more eyes on your ads.

Simply put, if your campaigns are hitting there budgets daily you are not getting the most out of your paid search campaign.

Max your daily budget too soon and you could be shooting yourself in the advertising foot. You might get a better ROI by lowering your CPC and showing your ads to more people. Not only will you be in front of more eyes, but you’ll also be paying less for targeted clicks and getting more return on each sale you make as you increase your chances of getting more sales. The bottom line is, advertising is about ROI and nothing else.

Do you know the optimal bid for your keywords and their associated landing pages? Is there an “optimal bid?”

One way you can determine the best bid for your keywords is to take your monthly budget and divide it by 30 (I always assume a 30-day month since that is the average). So if your monthly budget is $300 then your daily budget is $10. Start off with a 100 click per day assumption. It may be more or it may be less, but if you’ve never advertised by pay per click before then you don’t know. 100 clicks per day is a good benchmark but the number of clicks depends on certain factors beyond your control. Your bid prices will be tweaked any way based on actual performance.

$10.00 divided by 100 clicks would be a .10 bid. That’s fairly low for most keywords at Google, but it may be high for other search engines. Nevertheless, you are starting at this point as an “entry” bid. It will change based on actual performance.

Go ahead and bid .10 on all of your keywords for your new campaign. Let the campaign run for one week unimpeded. The most you will pay on any given day is $10, your maximum budget. That’s if you max your 100 clicks for the day. Once you hit the maximum you’ll be cut off automatically and your ad won’t show any more.

After one week, take a look at your stats. The stats you are most interested in on this day of testing are:

• CTR (Click Through Rate)
• CPC (Cost Per Click)
• Daily Budget
• Average Position

Your Average Pay Per Click Position
If your ads are showing up in the No.1 position at .10 per bid then you’ll likely have to lower your bid. You will probably get fewer clicks at No. 1 than you will at No. 2 or 3. Lower your bid by a couple of pennies to see where you fall and let your ads run again. Depending on how many keywords you have in your campaign, your ads will be at different levels. You could appear at No. 1 for one keyword and No. 5 for another. If necessary, change your bids for each keyword separately. You are aiming for No. 2 or No. 3 in positioning.

If you notice that certain keywords are not getting any CTR during that first week, look to see how many impressions those keywords are getting. Run the ads again at your new bid (a couple of cents lower than your initial bid). If those keywords still don’t get any clicks on the second week then pause them for week 3.

How close are you to your budget? Are you maxing out your budget every day? If so then you should definitely drop your lowest performing keywords. You don’t want to kill your budget on 25 keywords that are getting one click each. Put your money into your best performing keywords. If you are nowhere near your budget then up your bids significantly on keywords that are getting a lot of click-throughs but are low in position.

Your average position is very important. You may be an average of 4. That means you are appearing at No. 1, 2, or 3 for some queries. But you are also appearing below No. 4 for a significant number of queries. Optimally, you’ll be at No. 2 or No. 3 average. Try to bid for each keyword so that you achieve that average position.

After your first set of tweaks, run your campaign again for another week. After week 3, check your results again and make similar tweaks. Remember, the goal is to shoot for an average position of 2 or 3 for each keyword. Whenever a keyword hits that average position for 2 weeks in a row, stop tweaking its bid. Keep it set. Some weeks it may fall and some weeks it may rise because this position is always relative to what your competition is up to. But you want it to be around 2 or 3 on average.

When you are setting up and managing your pay per click advertising, do you evaluate your competition? Do you see what they are bidding for your keywords? Do you take a look at their landing pages? You should.

Evaluating your pay per click competitors is a little different than SEO competition evaluations, though not much. You are looking at some of the same criteria. You do care what your competitors are paying for your keywords. Are they outbidding you beyond your budget means? That’s good to know. But you also want to see where they fall in organic search listings. Do you top competitors pay a lot of pay per click traffic and rank low for organic searches? Maybe you can beat them organically and bid just enough to ensure that your pay per click ads run alongside your organic listings. If so, that will give you a huge competitive advantage.

Other things to look at when evaluating your pay per click competition include:

• Landing Page Optimization
• Website Infrastructure
• Link Popularity
• Internal Link Structure
• How Many PPC Companies Are They Using?
• Ad Results

Some of this information may be difficult to uncover. For instance, how many PPC companies a certain competitor is using. But if you can find it out then you can see how big a budget they have. You can also watch their ads over time to see how effective they are. If a competitor tries a certain pay per click company and kills their advertising after 4 or 5 weeks, that’s nice to know. Maybe you can save yourself from using that company based on your competition’s results. Or maybe their ad wasn’t written effectively and you can write a better ad for that pay per click company.

When it comes to evaluating your competition, you need to evaluate your pay per click competition as much as anything else.