When making decisions on changes to keywords based on conversion rate, cost per acquisition or any other sales metric, you may be hurting important influencing keywords that don’t get the last click but drive sales nonetheless. AdWords helps attributing credit where credit is due so that you aren’t too quick to bid down a keyword because on the surface it looks like it hasn’t driven any sales.

The Search Funnels report in AdWords can show you how much you should worry about keywords that are assisting in sales but not converting. Export the Assisted Conversions report and then filter out all last click converting keywords so that you only see the keywords that have never had a conversion but have had an assist.

In this example there were 191 keywords with the last click conversion and 113 with assists but no conversions. 37% of the keywords might look bad from a last click conversion rate or CPA standpoint but were still vital to getting the sale. In this case any keyword that didn’t contribute a conversion or an assist should be bid down but all other keywords should be given their due credit and either bid up or kept around longer to see if they can drive even more.

I haven’t been in a shopping mall for over a year (except for last November when my wife was overdue and we walked in circles inside the mall in hopes that it would induce labor (it didn’t work, she was two weeks late)). So, I’m not big on shopping but I have to believe that traditional retailers should be worried about the disruption of retail due to the internet. There are three killing pressures that threaten stores:

1. Transparency of pricing which takes away any leverage the retailer had as a result of the customer not knowing there was a cheaper price down the street.

2. The efficiency online competitors gain by consolidating merchandise in a few locations, which saves operating costs and capital and real estate.

3. Consolidating data about merchandise, prices and service. This is the one that I think most stores at least equipped to compete with. Online you see your friend buy something new, you read customers reviews of it, watch a demo video on YouTube, Google it to find the best price, and the internet gets it to you. Store? Who cares what store it comes from, let alone what the salesperson at the store has to say? Most people walk into a store having already decided what they want thanks to research online. Retailers once were the middleman between the brand/manufacturers and the customer but with 84% of all purchases being researched online prior to purchase, who needs a middle man? Your friends can now be your curators and merchandisers. You need not care who fulfills the order.

Retailers are not going away anytime soon, many have huge reserves of trust with their customers, and shopping is still considered a fun activity (for some) but as we grow up online retailers are going to have to figure out how to add value to the path to purchase because right now I don’t see one.

You’ve researched the keywords you want to optimize your site for and now you need to decide which keywords will go towards which pages of your site. You should optimize a single page for only one main keyword. I think it’s easiest to organize keywords into three categories: Brand, Category and Product. See the breakout below:

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It may take making more category pages than you planned so that you can have both generic category pages and brand category pages. Then once the target page has been identified you can use your keyword as consistently as possible on that page.

Everyone agrees that content network ads should be separate from search ads in your AdWords account for good reason: the data of one network have no bearing on the data of the other network. Search is about an active consumer looking for information. Content is about advertising products next to content where the subject is related to your product.

I think there are other divisions just as big as content vs. search that should be separated out in an AdWords strategy. First, the device that you are targeting will cause a big difference in the results of your campaign. The motives behind a person using a mobile phone is very different from a person using a desktop computer. Targeting tablets separately will also allow for better targeting and results.

On top of network and device there are the different search engines and different methods of  advertising – brand keywords, non-brand keywords, product listing ads, display, retargeting etc. None of the data from any of these different methods should be lumped together in the same report either.

These differences are enough to cause very complicated reporting. Each Engine/Network/Device/Method requires its own analysis if you want to look at each segment in context and be able to make changes that positively affect one without damaging another. Below is a stab at visualising what this looks like when each engine/network/device/method is separated out with its own macro conversions, micro conversions and targets.

There are up to three expenses when doing any kind of advertising campaign. 1. The cost of the creative. Paying the photographer or graphic designer to create the ad or paying the video production company to film and edit your commercial. 2. The cost of the media. Once the ad is made you have to pay a publisher to syndicate it – paying the site, magazine, TV channel or newspaper to show your content. 3. The cost of an agency. Often advertisers invest in agencies to service the whole process. They come up with the idea, create it and then execute it for you.

The cost of doing #1 is coming down thanks to inexpensive, professional level DSLR cameras and cheap editing software like Final Cut Pro. Sure, the real expense is hiring the talent to use these tools effectively, but as the tools become less scarce the ability to tell the difference between pro and amateur work is getting harder and harder. The cost of #2 is also coming down if you consider how inexpensive online advertising is. It will still cost a fortune to run a commercial on TV or run a full page ad in Opera Magazine, but those are no longer the only options (and arguably the worst ones). Free can get you pretty far online via YouTube and social media if you have something that is unique and worth sharing. If you want to pay for exposure you can also get pretty far on a limited budget.
So if #1 and #2 are cheaper than ever before is #3 getting cheaper too? It doesn’t look like it, but it should be.

I agree with Seth Godin that when execution gets cheaper, so should planning (and therefore the cost of working with an agency should drop), “The cost of building digital items is plummeting, but our habit is to plan anyway (because failure bothers us, and we focus on the feeling of failure, not the cost).”

If you’re building an online marketing campaign, spend less money on the meetings, sign-offs and planning and invest that money into learning and optimizing. Instead of paying to figure out which idea is best before picking the final winner, invest that money into running them all and optimizing the ones that work best. I think you should publish it all and then let the best filter to the top, more content is worth more than perfect content.

When you see a completely irrelevant ad on TV you have to excuse the advertiser to a degree. They don’t know any better. They don’t know who is watching and whether or not you may be interested in their product. They are trying to reach their target audience with what limited data they have available and you happened to see it too. Mass media will always be extremely wasteful. The same level of forgiveness towards irrelevant ads online should not be excused.

This mindset, carried over from buying print and TV, when buying media online is that the placement of the ad is very important because its “borrowing brand equity” from the placement. With limited information on who is looking at the ad, this is a good way to go – its seems obvious that you wouldn’t put a diaper ad in Sports Illustrated. Publishers make a fortune convincing advertisers that their online placements are worth more than others placements because of this “equity” that they also give the advertiser. I disagree. Placements don’t matter online. What matters is the user.

The internet provides data about the mindset and behavior of the user that is impossible to know with print and TV media buying. If you know that the user is male, has a household income above $100K, recently visited sites about shaving, and did a search on Google for razors, than who cares if your ad for razors is shown to the user on a site selling diapers? It might even be more impactful because the ad is very different than the content on the page.

Stop buying placements, start buying individuals. This is possible online with demand-side platforms that bid in real-time for placement across multiple ad exchanges. Along with algorithmic and dynamic bidding that goes beyond rules-based tools to leverage data in a way that’s unique and evolves with consumers, you can focus on who sees your ads rather than where your ads are seen.

Coupon code sites dominate affiliate marketing. Any brand utilizing affiliate marketing to drive a portion of their revenue most likely makes 80% of that revenue from a small handful of coupon sites – ones like bradsdeals, retailmenot, couponcabin, dealnews, etc. Take away the discounts and you will see your affiliate marketing channel dry up. As shoppers are continually trained to look for coupon codes prior to purchasing and as retailers continue to make coupon codes, Affiliate Marketing will continue to be nothing but a discount channel.

Affiliate marketing doesn’t really work with the typical publisher who writes about any variety of topics because commissions erode trust and the payout isn’t worth it. Ideally publishers with engaged audiences recommend products to their readers anyway, and might as well make a little cut if their audience happens to buy. Getting people to recommend products online is a big deal (the entire premise of Facebook’s business strategy) so why not incentivize them? The problem is that commissions erode trust. The most important asset to the publisher is their audience, they know this and thats why they aren’t part of affiliate networks. Pumping out links to products is a fast way to kill their audience and the small amount of money gained isn’t worth it. Publishers who don’t want to be coupon sites but still make money stand a better chance at monetizing their work through marketing their own products, consulting, speeches and any of the other modes of indirect revenues.

Coupon code sites on the other hand are very upfront. They aren’t providing thoughtful analysis, unbiased recommendations or helping people discover something new. All they do is help the shopper find a code before hitting the checkout button in their cart. At that stage the shopper is ready to purchase the product regardless of whether or not they find a code that would give them 10% off or free delivery, so is it really fair for an affiliate to get rewarded for that sale?

Affiliate marketing is a very efficient way for discounting retailers to find discount shoppers. But are discount shoppers what you want?

Another reason to have device-only targeted campaigns – in this case for tablet targeting. I’ve seen this happen enough in my own accounts that I’ll bet the same is true with everyone: ads that are above the fold on tablets have a click-through-rate up to 10x higher than below the fold.

Take any existing campaign that is targeted to both desktop and tablets, change it to just desktops, duplicate the campaign and target the new campaign to just tablets.  This will allow you more control to bid for higher positions on tablets that you might not want to do on desktop. It will also allow for easier reporting for tablet performance.

The chart below shows the over-investment in print and the under-investment in mobile and web compared to the relative time consumers spend with those mediums.

Flurry points out a few reasons why mobile is so under-invested in, including the fact that agencies and brands have yet to adjust to the unprecedented speed of adoption of apps by consumers and the lack of systems in place to buy inventory in volume.

The part that confuses me is why so much money is spent on print, when the amount of time consumers spend with print is the lowest of all mediums. Besides the reasons Flurry notes above, I think the answer is because the people making the buying decisions have a strong interest in keeping their jobs and when it comes to allocating the marketing spend, its much safer to do it like you’ve always done.

The thing that’s scary about online or mobile advertising is that its much more measurable. And once its measurable you can be blamed. They like to be creative, tell stories and take the time to craft the right font, color scheme and images. But when technology puts control into the hands of the consumer, they can choose to skip and ignore your story, and you’ll see how bad your well-crafted idea crashed and burned in real time.

Also, advertisers want to be the ones to decide what ad creative will be shown, they don’t want data to decide for them. If the data decides which image or tagline works best than how do they justify their big salaries?

Print also lends itself well to an advertiser’s desire to have brand consistency, which is easy when one ad campaign is seen by thousands of people in a magazine all at once. As soon as you are marketing to a mass of niches, you have to start tailoring it to those niches which causes it to loose that brand consistency. You can’t treat people like they are all the same anymore, that’s why taking a print ad and pasting it onto the web doesn’t work either.

The below diagram breaks out the distribution of keywords that drive the most sales from Head to Mid-tail to Tail. A few “Head” keywords will drive the majority of sales, these are typically your company’s branded terms like: Burton snowboards, Volcom, etc. Everything besides the Head keywords are non-brand keywords. Non-brand can be broken up into two sections: Mid-tail and Tail. “Mid-tail” is made up keywords that have a lot of queries but drive less revenue, keywords like: snowboard bindings and helmet. The “tail” is made up of the highly specific keywords that happen less often, keywords like: Red HiFi snowboard helmet and mens Capita Mid Life Zero Snowboard.

The columns in my diagram show the amount of revenue you can expect from each segment. Head terms are the most profitable because these people are already educated about your brand, know what they are looking for and where they are going to buy it from. The Mid-Tail keywords have the least amount of sales because these people are not sure what they want or where to buy from. They are in browsing mode. The Tail has less over all traffic from each keyword but in aggregate it is a very profitable.

Before trying to tackle Mid-Tail keywords, first focus on maximizing impression share of your brand keywords in the head segment. With all other non-brand keywords, build Tail campaigns with tightly themed ad groups and relevant text ads first. If you try to go after the Mid-Tail section of non-brand keywords before working on Head and Tail, you will end up with high CPAs and low conversion rate. You’ll be doing a good job of educating potential new customers down the road with Mid-tail, but based on their search query you can tell they just aren’t in buying mode.