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Are you a PPC expert?
Saw an add on Facebook this morning that asked if I was a PPC (Pay Per Click, aka Paid Search) expert. The link took me through to site called Trada, the page heading offering me the opportunity to “Earn money running PPC marketing campaigns without having to find or manage your own clients!”
Immediately this looks a lot like one of those “work from home, make a £million” deals.
The hook is that you choose which client you want to manage the PPC for and then build out your own account with campaigns keywords ad text etc, with the client paying for all the media spend within a set limit. You then get paid for each lead or conversion, similar to a typical affiliate model.
However, instead of flat fee or percentage for the revenue, The client will pay you the difference between your CPC (Cost Per Click), and the cost the client would be prepared to pay for it. And it is at this point that the model will fall over.
If your keywords generate clicks or conversions for less than the advertiser’s stated click or conversion price, you keep the difference between what the advertiser was willing to pay for the click/conversion, and what it actually cost to generate it. It’s that simple!
Unless I have read this incorrectly, it looks like there could be a CPC ceiling set by the client. If so, then there is going to be a conflict of interests going on here. The ‘optimiser’, as Trada calls them, will want to pay as low a CPC on their keywords as possible thus maximising the margin between what they pay and the max CPC set by the client. However, in reality the client will want that CPC to be pretty high to ensure good visibility in the SERP (Search Engine Results Page) and therefore provide decent traffic and hopefully site conversions. There is also the very real scenario that to get anywhere in the listings the actual CPC is going to have to be higher than the CPC ceiling set by the client, and as a consequence these terms will not get bid on.
Now, CPC is not the only factor in calculating your SERP position, and Quality Score/Index is important here, but I would think it quite hard to build up a decent QS when operating under a CPC ceiling, at least initially.
It would be interesting to see if there is a different CPC ceiling for different categories of terms e.g. £1.50 for generics, and £0.25 for long tail, and of course brand terms. I’m going to make an assumption that the client wont let you bid on these, as is the case on most affiliate programs.
I’m would also think the margins are going to be pence and not pounds, meaning that this game is going to be about large volume. If you’ve ever ran a successful PPC campaign, then you will know that it takes a good deal of time. Constant analysis of terms, optimisation of ad text, keywords, bid prices etc. Time is a precious commodity, and I don’t think you’d be able to just dip into this every other night of the week, or a few hours at the weekend, all for such a suspected narrow margin.
I could also question what visibility the ‘optimiser’ gets into the results? Do they see full click path, or just the final click? (See a previous posts about tracking more than just the last click) I could also mention that profitable search campaigns are built on a strong understanding of the client’s business and building relationships.
Maybe I’m wrong, and can’t see the bigger picture, or perhaps the client is willing to pay a reasonably high figure for the sales and the margins are decent, but for me, this just looks like hard work for very little. But then aren’t all these deals the same?
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Hi there. I’m Niel Robertson, the CEO of Trada. I’m very happy you took at look at what we’re doing and are asking all the tough questions. We’re doing something pretty different than has been attempted before in paid search so its not surprising when experienced PPC experts have questions about our model given their personal experiences with paid search. We actually have what i believe is a pretty sophisticated system that contemplates many of the questions you posted about. Here are some of the high points:
1) Advertisers can run campaigns in Trada as click-based (setting a price per click and incenting optimizers to find clicks that are less than that – more on this in a second to your questions). They also can run a campaign as conversion based (conversions being specified by the advertiser as a sale, registration, whatnot). In the conversion based model the optimizer is incented to get a sale for less than the conversion price (similar in concept to affiliate marketing but with a few major differences).
2) Advertisers can actually run both models simultaneously because paid search is constant process of exploration and optimization as you mentioned. Allowing optimizers to explore in a click model and then optimize ad groups in a conversion model mixes the right incentives and payouts for everyone.
3) We run across ad networks (Google and Yahoo today, Bing soon) and allow optimizers to manage keywords and costs on each ad group as pricing and conversion rates do vary widely sometimes.
4) You are absolutely correct that a singular click price does not allow a PPC expert very much flexibility in ad position, quality score, etc.. That’s why we have tiered bid prices. An advertiser can set tiers of click prices and vary payments in them to allow optimizers to work the whole keyword space in their category from head terms to tail terms. The payment can be varied to manage the potential payout to the optimizer for more expensive terms and thus incent exploration into the keyword space across many keyword terms. Sometimes a two word broad match at 2.00 has the best conversion rate/cost. Sometimes a 5 word exact match does (perhaps with lower volume). The point is to get lots of PPC experts all working the massive keyword space that many of our campaigns have.
5) In PPA campaigns, there is normally a much higher maximum click price that allows optimizers to use their own judgement on keyword by keyword pricing (including across ad networks) as they are getting paid only on beating the target CPA of the conversion. If they fall below the required CPA pricing for an ad group they simply get moved back to the click model so they can optimize (reprice ad networks, remove poorly converting keywords, use negatives, use match types better, reconfigure ad copy/deep linked landing pages, etc..) and try again. In the mean time they earn on clicks.
One thing that might not be obvious is that optimizers work together to build a comprehensive campaign for an advertiser. They work from the ad group level down and thus can manage things the way they would in AdWords and YSM, etc.. They see all the data for their own ad groups which we pull constantly from Google/Yahoo. Trada sews all their work together into singular campaigns in G/Y. This of course will beg other questions about what happens when optimizers use the same keywords, etc.. We have various models for those situations as well.
To your point about tracking, advertisers use our conversion tracking and we give full visibility into this (including keywords, search terms, ads, conversions, etc..) that the optimizer generates. We integrate with GA and currently pull bounce rates per keyword but will also include more stats soon like page views, time on site, etc.. In addition, optimizers can use stock ads from the advertiser or propose their own ads and thus optimize QS through DKI, ad text and landing page choices. As you know, being able to deep link into a retailers website for brand/category terms can provide much higher CTR/Conversion rates.
We’ve been refining the system for about 18 months now and have been working since day one with about 40 paid search experts (some are on staff and investors). Many of our optimizers work at agencies or are hard core affiliate arb folks. In fact two of our angels started Performics and one of the is one the largest PPC affiliate in CJ. We like to have experience people hold us accountable to building real systems that experts can use. Good paid search as you mention is about the ability to constantly optimize with data. Our system is designed to let optimizers do this and reap the rewards when they do.
Unlike an affiliate network, you don’t have to risk your own money (although we have stop gaps to manage ineffectual keyword spend at the keyword, ad group and optimizer level as you’d expect). Our system is totally transparent (your stats are show to all, but not your keywords, ads, or ad groups). You can see how well you compare to others and advertisers can see everything in their campaign and who manages it for them. We find that this lets the true experts strut their stuff in our marketplace. What’s fascinating is that rarely are the same optimizers the leaders on every campaign they participate in. And in each campaign there are 10s of winners. An average campaign has 24 experts working on it. Hence the wisdom of the crowds applied to paid search!
We’re still learning and evolving on a daily basis so I do hope you give the system a try. We require AdWords or SEMPO certification and passing a Trada certification exam to get in (when we say PPC experts we really do mean it – this isn’t a work from home type of gig for anyone who just thinks AdWords might be fun). We take as much feedback as we can from our experts and try to constantly incorporate it into our system. We’d love to hear more concerns and questions as we believe we have pretty good answers (and results) to many of them. In the mean time i hope this shed some more light on what we’re up to.
Feel free to send me more questions if you have them,
Niel (nielr@trada.com)
Hi Neil, thanks for your comments.
I think what you’re doing at Trada is interesting and innovative and certainly offers a different model for both advertisers and optimisers. However, I personaly feel for some people optimising a paid search account with such restrictions is limiting. Not having full visibility of how other parts of the campaign perform, or how SEO works can prevent the account from really hitting the best results possible. Also not having contact with the client is a real disadvantage for me. Coming from an agency background I know how important it is to have a relationship with the client and all the deeper knowledge and understanding that brings.
It feels like you are trying to create something similar to the affiliate market place for PPC and it will be interesting to see if this ‘catches on’.