So What If They Are Already Your Customer? They Still Found You Via Search!

Here's one of the more maddening lines of discussion I've had with multiple clients [BTW, this is likely to only happen with B2B companies]:

Me: You can see in PPC Report A that you spent $X to receive $Y in revenue via paid search.  We are seeing a positive ROI from your search engine advertising campaigns, even after accounting for ad costs.

CLIENT: We're not so sure we're seeing the same thing.  In PPC Report B you supplied us with a list of individual account names that contributed to the revenue from the campaigns you are managing.  We appreciate the effort you went to to go through the CRM data we provided you and matched that up against the individual  orders and the keywords that drove those orders, but some of those orders are from existing Customers of Our Company.

Me: I hear what you are saying, but if the orders were produced from visits to your site by people looking for "awesome widgets", and not for "Our Company", then it appears to me that your Customers still use search engines to look for additional suppliers for those products.

CLIENT: I'm not sure if that's 100% accurate.  The issue though is that they were already our Customers and didn't generate new business for us.

Me: [what can I possibly say that is going to change their mind?]

I've encountered this on more than one occasion now.  At least three occasions where I can clearly remember the flow of the conversation.  I have yet to be successful in having my point accepted as reality.

The reality is - it does not matter if they are already in your system as a customer!!!  We have real proof that someone from that company went to Google, searched for a product, did not specify your brand or any of your product brands in the search, clicked on your ad, and purchased a product.  The transaction has to be attributed to the PPC program.

It makes sense to assume that the pre-existing relationship had something to do with either the initial click on the ad, or the eventual purchase.  But, how can one argue that a real person at the Customer's company was considering other supplier options?  The PPC campaign did indeed bring that person back to Our Company and produced a sale.  Call it Retention, Re-Activation, Competitive Defense, whatever.  The ROI calculation for the PPC campaign must include those transactions.

Can you argue any other way?

Attribution – The Fly In The Pay For Performance Ointment

Internet marketing is one of my passions.  The main areas that capture my attention are search engine marketing (both SEO & PPC) and Social Media Marketing.  I love the combination of creativity and analysis that these disciplines require.

Another area of marketing that I am passionate about is Pay For Performance Search Advertising.  Getting paid based on performance.  Putting skin in the game.  It's the next best thing to ownership of a company.

But, there's nothing worse than a "fly in the ointment" when it comes to something outside of your control getting in the way of all the effort you put into a business venture and/or advertising campaign.

One very large fly in the ointment for Pay For Performance advertising is - Attribution.

Attribution: Getting credit for your work.  Getting paid for your (typically "above and beyond") efforts.  Having the purchase/lead/conversion attributed to the advertising campaign you are managing.

Pay Per Performance marketing relationships can get sticky when it comes time to assign "credit" to certain transactions/groups of transactions.

Examples in a Pay Per Click (PPC) Search Engine advertising program:

• Doubling Back: A user searches for a product, clicks on an ad run by the consultant, but does not convert on that visit.  The user then "Googles" the company's brand name (an "automatic" ranking most companies enjoy), or the user Google's the same keyword (or any other keyword) just to see if they are missing anything and then comes into the site through organic search results and converts.  The person has doubled back on their original path just to make sure they found the best search results.
  • Conversion tracking code provided by a search engine (e.g. Google AdWords) will attribute that conversion to the original click on the PPC ad (unless cookies have been cleared out or the visit comes from another computer).
  • Analytics programs (even Google Analytics!) will attribute the conversion to that most recent, organic and branded search, visit.

• Brand Advertising: The consultant (correctly) recommends running a PPC campaign that focus on branded keywords (control the message!).  These are "cheap" conversions, aren't they?  Cheap in monetary value to be sure, and "cheap" because the conversion would have happened anyway.
  • The consultant should be running a branded campaign.  But, should the consultant be paid for that?

If you want to add complexities to the scenarios, imagine that the company has hired one company for SEO and hired another company for the Pay For Performance PPC program!

In a recent post, titled The 4 T's of Pay For Performance PPC,  the first "T" was "Trust".  When it comes to creating a system for appropriate Attribution, Trust is the essential first building block.

Trust will be needed throughout the entire tracking and payment allocation lifecycle of the relationship.

One of the other "T's" is Tracking.  Having a combination of tracking mechanisms in place is a must.  At a minimum there needs to be use of conversion code snippets associated with the advertising platform (e.g. AdWords, Bing, Facebook ads [FB conversion tracking is currently in Beta], etc.), plus the use of a core web analytics program (e.g. Google Analytics, Yahoo Web Analytics, Omniture SiteCatalyst, etc.).

However, the most important piece of the attribution puzzle is creating an agreement at the outset that attempts to both anticipate tracking and credit issues and simplifies the attribution process as much as possible.

For simplicity, let's assume that the "truth" for tracking resides with the core Web analytics program (although there are situations where this will not always be the case).  Some possible scenarios include providing conversion credit for conversions that are credited to PPC by the core Web analytics program:

1. Only for non-branded terms
2. For both branded and non-branded terms
3. For non-branded terms only, but with a higher % payout than originally proposed
4. Plus conversions coming from organic searches for branded terms above the trailing 12-month average

Whatever system you choose for tracking conversions and attributing those conversions to the appropriate channel, make sure the conversation happens at the outset in order  avoid disagreements down the road.

The 4 T’s of Pay For Performance PPC

I recently authored an article in Search Engine Land, titled 6 Tactics For Overcoming The High Cost Of Clicks In B2B PPC.  At the end of the article, I made reference to "The 4 T’s of Pay For Performance." I had already been pulling together the concept for the "4 T's" article in my head for a few weeks, and when I got to the end of writing the article I realized that it was the perfect lead in to this blog post:

Pay Per Performance Marketing

For the purposes of this article I am primarily looking at the concept of someone, like myself, acting as the Pay Per Click (PPC) advertising arm of a company on an outsourced basis, with primary compensation coming in the form of performance-based commissions/payments.  Obviously the concept of Pay Per Performance can be extended to many areas of marketing & sales, and the concepts I am writing about apply to 99% of these other media.

You can read more about the Pay For Performance PPC services I provide.

I. Trust

Trust is earned, and trust goes both ways:

Retaining a Consultant/Agency -  Are they ethical?  Will they report metrics in an unbiased manner?  Will they represent my brand the way that I require it to be represented?  Will they attempt to cheat me by "poaching" my branded keywords and calling that a conversion?

Note on "Poaching" Branded Keywords: Here's a perfect topic for a future article in this Pay For Performance series!

Trusting The Client - Will they accurately provide conversion data from their own systems?  Will they pay me in a timely manner?  Will they have me build up their campaigns but cut me loose before the campaign ramps up?  Will they see so much success that they decide to cut me loose to save the commission expense?  Will they credit me for all (almost all) the conversions that I know I earned?

II. Time

Any search advertising campaign (or ad campaign of any kind) takes time to ramp up and see results.  In a Pay For Performance arrangement, there is an extra component where the consultant/agency is deferring compensation in the beginning for the promise of enhanced rewards later.  Because of this upfront investment of time (and sometimes money), it is critical that the consultant be given ample time to not only ramp up the campaigns, but also to reap the rewards.  A fair, well-structured arrangement will provide a longer-than-average contract window, while still giving the client an opportunity to fire the consultant "for cause."

What do I think is "fair" in terms of contract length?  12 months is ideal for the consultant/agency.  3 months is ideal for the company/client.  A great compromise is 6 months, with a mutual option to continue for an additional 6 months.

III. Tracking

Accurately tracking conversion data is a critical component to a Pay For Performance relationship.  In the world of PPC, we have the advantage of being able to use a variety of website analytics tools to track success (as opposed to offline media such as radio, TV, etc.).

Both parties need to agree on a set of tools from the outset of the program.  The tracking tools should also provide a combination of impartial, 3rd-party data and internal, proprietary data.  For example use Google Analytics and an internal ordering system or CRM system.

Here is one set of "ideal" tracking tools for an e-commerce relationship:

1) One instance of a 3rd-Party Web Analytics package, with shopping cart integration (Google Analytics, Yahoo! Web Analytics, Omniture, etc.)

2) Individual Search Engine Conversion Codes (one for each engine: Google AdWords, MSN/Bing, once-upon-a-time Yahoo!, etc.)

I believe that in most situations that the combination of tracking methods above is sufficient for e-commerce.  In some cases the consultant may also need access to/reports from the client's actual order system (typically for spot order verification or to make sure that the other tracking methods are picking up the right data).

Where Pay For Performance tracking gets tricky is in lead generation.  More specifically, in a B2B lead generation scenario where compensation and/or relationship extension is dependent on the quality of the leads and/or proof of final sale.  In this case, here is a likely ideal combination of tracking options:

1) One instance of a 3rd-Party Web Analytics package (Google Analytics, Yahoo! Web Analytics, Omniture, etc.)

• Choose a package that has drill-down capabilities to view the referral source and subsequent navigation paths and return visits for each individual visitor.  Yahoo! Web Analytics makes this very easy (and it's free).

2) Individual Search Engine Conversion Codes (one for each engine: Google AdWords, MSN/Bing, once-upon-a-time Yahoo!, etc.)

3) Custom-written code that pulls the referral information and associates it with the lead form submission.  This code allows for the referral data to be placed into a CRM system (or flat database) alongside the form field data that is already being captured when someone fills out a form and submits it.

This combination of tracking mechanisms is critical in gaining the ability to gauge lead quality and sales activity down to the individual keyword level.

Note on Attribution: Giving "credit where credit is due" is a topic that should be discussed between the parties prior to the engagement.  I will be writing about this in a future article in this series.

IV. Testing

Testing variables is where the sweetest juice is squeezed over the long-term of a PPC program.

It's a given that there will be constant attention paid to keyword selection & negative keyword management, and to bidding!  The other key elements to Testing that require collaboration and communication (do I smell a "4 C's" article coming?) between the parties are in ad copy and landing pages.  Both of these areas face the consumer and represent the client's brand.

Technically, ad copy testing is the easiest variable to manage.  In terms of brand ramifications, the two parties will not only plan basic messaging elements at the outset, they will also come to an arrangement, based on comfort level, where ad copy is launched with hard approvals or at the consultant's discretion.

Landing page testing is the more challenging area in optimizing a campaign.  The consultant either needs the (timely) cooperation of the Web development resources at the client, direct access to the content management system, or the ability to use a 3rd-party landing page optimization tool. Here is a partial list of elements that will need to be tested for optimal landing page performance:

• Images
• Headlines
• Body Copy
• Offers (requires collaboration and creativity with the Marketing department!)
• Forms
• Navigation
• Resource Links
• Fonts

Landing pages are the make-or-break piece of an effective PPC program.  If the right tools and/or processes are not provided, the Pay For Performance relationship may be doomed from the outset.

Summary

Pay For Performance can be a significant win/win situation for both the client and the consultant.  Both parties can profit and grow together.  This will only happen if the relationship is actually viewed as a relationship, and areas such as The 4 T's are discussed, planned, and reviewed regularly.