As marketers and business owners, we're always looking for "the next big idea or strategy" to maximize our business performance. Yet, the application of time-tested principles consistently achieve greater results over efforts to create newer ideas and strategies.
For example, Stephen Covey's New York Times best-selling and world-renowned book, Seven Habits of Highly Effective People is a self-proclaimed synthesis of principles taught by great teachers and philosophers over 150 years ago 1. The world-wide success of this book is evidence to the time-resistant power of principles.
In addition, many hugely successful Internet Marketers generated significant fortunes from applying 50 to 75 year old direct mail principles to the new Internet medium. Marketing strategies used by greats like Claude Hopkins, Robert Collier and John Caples have significant application in today's digital environment.
Although pay-per-click marketing is a relatively new Internet marketing strategy, its performance relates well to an old principle called "Pareto's Law" or better known as "the 80/20 Principle".
The meaning of the 80/20 Principle is best explained by a recent book, The 80/20 Principle: The Secret to Success by Achieving More with Less", written by Richard Koch:
"The 80/20 Principle states that there is an inbuilt imbalance between causes and results, inputs and outputs, and effort and reward. 80/20 relationships typically will show that 80% of outputs result from 20% of inputs; that 80% of consequences flow from 20% of causes; or that 80% of results come from 20% of effort." 2
When applied to pay-per-click marketing, 80% of outputs (or desired visitor actions on your website), result from 20% of the inputs (your keywords.)
Applying the 80/20 Principle to Pay-per-Click Marketing
One of the benefits of running a pay-per-click marketing campaign is the control gained from selecting keywords to bid on. In essence, the keywords you select enable you to target specific types of individuals among varying demographics and at various points within their buying cycle.
But because it is difficult to know specifically which keywords (inputs) will ultimately generate the most actions (outputs) the process of "keyword selection" should be applied liberally. This means that all possible keyword variations and associations should be selected to figuratively "blanket" or span across all potential search queries for your products or services. By relying on your keyword-level tracking system, over time, the resulting website actions will sort the top performing keywords from the poor-performing ones.
Under the 80/20 Principle, if you initially select 1,000 keywords for your pay-per-click marketing campaign, over a month or two depending on visitor volume, your keyword-level tracking system will uncover 20% of keywords that produce 80% of your results. Likewise, the 80/20 Principle will expose roughly 80% of the 1,000 keywords selected that produce minimal to no results.
Aside from seasonality variations and marketplace trends that effect keyword performance, the 80/20 Principle pinpoints a significant operational process that all Internet marketers should implement immediately. By tracking your pay-per-click marketing campaign at the keyword level and identifying the specific keywords that produce maximum results, you can eliminate roughly 80% of your poor-performing keywords. Through this "keyword filtration process" you will re-allocate budget dollars to the top performing keywords and reduce keyword management time spent on poor-performing ones.
Remember These 5 Keys?
1. During your keyword selection process, "blanket" your target market with every relevant keyword variation and association used by your target market to find your products or services. Use Overture or Google Adwords' editorial review to define the relevancy boundaries (or "the ends of the blanket") for your target market.
2. Define at least one value-oriented action such as an opt-in, subscription, registration or sale that you seek a visitor to perform on your website. This action (called your "marketing objective") is the determination point for measuring how your keywords are performing.
3. Implement keyword-level tracking to identify which 20% of your keywords produce 80% of your actions.
4. Pay close attention to seasonality variations and marketplace trends that may cause fluctuations in keyword performance. Instead of eliminating all 80% of your poor performing keywords, identify the most relevant ones to your products and services and the ones with the highest demand volume and work on adjusting their bids, re-writing their titles and descriptions or re-engineering their landing pages to increase their performance.
5. If branding is your primary objective as opposed to "performance" remove your brand-oriented keywords from your 80/20 Principle analysis and associated performance metrics.
Analyze your pay-per-click marketing against the 80/20 Principle to see if an imbalance exists between your inputs (keywords) and outputs (actions). You will discover that a simple revamp of your pay-per-click marketing campaign will significantly increase your visitor-to-action conversion rates, reduce your cost per action and enable a more efficient allocation of your budget across your top performing keywords.
Sources:
1 Stephen Covey, Seven Habits of Highly Effective People (New York, Simon & Schuster Inc., 1989) pg. 18.
2 Richard Koch, The 80/20 Principle: The Secret to Success by Achieving More with Less (New York: DoubleDay, 1998) pg. 4.
Kevin Gold is a Partner and Co-founder of Enhanced Concepts, Inc., which specializes in turning website visitors into leads and sales through tested website conversion strategies and performance-focused search engine marketing. To learn how to generate greater performance from your search engine marketing and to turn more website visitors into leads and sales go to http://www.enhancedconcepts.com.
Why do people search on search engines? Let's confess this... Read More
Back in the old days of the Internet - in... Read More
So you want to make money with Google Adsense? I... Read More
Once you venture into the world of Pay Per Click... Read More
Here are three Adsense Tips, together with the required HTML... Read More
You have a web site ready for action. Your product... Read More
Hey, wait a minute. You can't have popups on the... Read More
Running a pay per click campaign can be a valuable,... Read More
There's tons of money to be made from the Google... Read More
Search engine optimization can take a long time to show... Read More
How much revenue do you generate from Google Adsense?Recently there... Read More
A few days ago, I was setting up my latest... Read More
I often get asked what the secret is to making... Read More
No, this baby boom will certainly not swamp the Social... Read More
When you purchase visitors or "clicks" from a search engine,... Read More
There is no question that you can make some good... Read More
Google is probably one of the single most important revolutions... Read More
Introduction:Of all the important decisions that go into a successful... Read More
If you have been online for quiet some time you... Read More
Pay Per Click advertising has been around a few years... Read More
Webmasters have a revolutionary new method of collecting income from... Read More
There are a variety of advertising options available to online... Read More
No doubt you've heard the phrase "pay per click" before.... Read More
One of the biggest problems faced by ClickBank merchants is... Read More
As the dust settles and the excitement caused by Google's... Read More
How?Dead easy.I implemented this tactic myself yesterday on one of... Read More
4. Write an attractive ad - you have a very... Read More
Why, on your web pages of course. Ok, just kidding.... Read More
We've received many emails from customers over the past several... Read More
MSN PPC Advertising Long-Awaited Debut Announced You probably already know... Read More
A large part of Google's multi-billion dollar annual turnover comes... Read More
That's right! Many webmasters are getting suckered into joining adsense... Read More
As a blog or site owner, you can make some... Read More
Pay per click or search engine optimization, which one should... Read More
Are pay-per-click ads the best method of getting customers to... Read More
Make Your Ads DifferentYour completed AdWords ads are going to... Read More
If you ever used Google AdWords to advertise your product... Read More
An unfortunate byproduct of the pay per click advertising business... Read More
"Todd" was keen to compete in one of the most... Read More
If you want to make money online with a work... Read More
By knowing the most expensive keywords on the internet, you... Read More
Once you venture into the world of Pay Per Click... Read More
What are pay per click engines?Pay per click engines as... Read More
If you know anything at all about Internet marketing, then... Read More
There are no guarantees in life, so I don't guarantee... Read More
Google Inc. is suing a Houston-based company for allegedly clicking... Read More
Faced with a mediocre or worse performing paid search campaign... Read More
It's worthwhile to examine Google's definition of Google AdSense and... Read More
Then most difficult aspect of marketing a new product or... Read More
The darkest nightmare a hardworking affiliate webmaster fears is receiving... Read More
Pay-Per-Click Advertising |