Why PPC Accounts Fail

Shawn Livengood over at PPCWithoutPity recently wrote a great blog post called The #1 Reason PPC accounts Fail.  It’s scarily accurate, and certainly worth a read.  Livengood argues that PPC accounts fail for a simple reason: the products they’re advertising are bad.  (His language is a bit more blunt.)

I certainly can’t argue with that. If your product is too expensive, not right for your market, poorly designed on a bad website, or just plain old rubbish, your conversion rate will never be strong enough to overcome the cost-drag on your account and move you into a positive return.

PPC is not a panacea and customers aren’t stupid.  This simple bit of maths is a big reason why we’re picky about which clients we take on board.  PPC can’t cure a bad business model.  We’re lucky to be in a position where we don’t have to take on campaigns, even when we know they’re doomed.

Building on Livengood’s post, there are two other reasons why PPC accounts fail. In my experience, they’re at least even with “the product is bad.”

Over-optimising a campaign

Over-optimising a campaign is a serious problem that can doom an account to fail. It happens when advertisers try to make decisions with too little data to justify them.

During account reviews, and even when managing accounts, I’ve seen this phenomenon time and time again.  Keywords in a brand new campaign are promoted and bid on hard based on one conversion in 10 clicks, only to run up spend and never convert again.   Sure, that keyword had a 10% conversion rate – but 10 clicks wasn’t nearly enough to make a decision.

“Promote East London! We had 10 calls from there today!”  Great, but what about tomorrow? How about the day before?  How can you decide if that was just a fluke? How can you separate the signal from the noise?

Worse still, training and experience is no protection.  Even experienced account managers sometimes fall prey to the temptation to make “just this one little tweak.”

How do you get around this?  Don’t make decisions without statistically relevant data.  You want to look at data trends over the course of weeks and months; thousands and tens-of-thousands of clicks – not hundreds.  Done right, PPC is a long-game.  Rushing decisions is a recipe for failure.  Take a deep breath and wait for the data.  Over time, data doesn’t lie and the signal becomes apparent in the noise.

Budget: Not taking your own business seriously

This is perhaps more of an underlying problem for businesses, especially small ones. That being said, businesses that don’t take themselves seriously have one symptom that comes out in PPC: budget.

Some industries and niches are lucky enough to still have absurdly cheap click costs. Indeed, seeking those out are a big part of what a good PPC account manager does.  However, it’s a good bet that if your industry is highly-competitive, (and whose isn’t these days?) and has the potential to be profitable, there is going to be a barrier to entry into the PPC battle: click costs.

I get it, I really do. Everybody is looking for the best possible deal for their business.  Everybody is tightening their belts.  But, if you’ve identified PPC as a core marketing channel for your business,  you need to treat it as such if you want it to give you a return.

If you want PPC to work seriously, you need to get serious about it. That means spending.  If clicks in your industry are likely to cost £1.25, you can’t get away with a £2 per day budget. You need data to scale up. You need clicks to get data. You need to spend money to get clicks.  It’s that simple.

Helping businesses get this math right is what agencies do, but I’d be lying if I said there wasn’t a barrier to entry.  Doing PPC right costs money.  It’s not free. It’s not even necessarily cheap.  What it is, however, is scalable.

If you’re passionate and serious about your business , then that seriousness needs to be reflected when you delve into PPC.  PPC isn’t something “to take a punt on”. It’s something to be planned for and budgeted for in a realistic way.

Acting any other way does a disservice to your business and dooms your account to failure.

Stay on the lookout

It’s tough to beat these problems sometimes, especially when there are a million companies, agencies and individuals that will tell you exactly what you want to hear.  “Your website is fine, no problems.” “Yeah, £3 per day is a totally realistic budget.” “We turned off all your other ads because ‘blue widgets 55cm by 10cm’ had a 33% conversion rate and 10 clicks.”  Those tell you what you want to hear, take your money, and then work hard to avoid the blame for the inevitable failure of your account.

Avoiding those scenarios is a big reason why we’re picky about clients (especially for our Pay on Results PPC service).  We haven’t always been so good at being choosy, so we’ve learned some of these lessons the hard way at Maple Forest.

Avoiding these two issues, over-optimisation and lack of seriousness in budget will go a long way to helping you be a success in PPC. Be wary of anyone who downplays their dangers.