Why Your Online Agency Will Likely Never Get You A Positive ROI. How a Drunk Google Employee Let Us in on the Secret to Paid Search Success…
If you’re not seeing a positive return on investment with your online marketing campaigns, you likely never will because your ad agency hasn’t been hanging around enough drunk Google employees.
Remember that scene from the Academy Award-Winning 2000 film Erin Brockovich, when the creepy guy who Erin thinks is trying to pick her up turns out to be a former PG&E employee just trying to share some inside information—information that turns out to be critical evidence for her case against PG&E? Well, twelve years ago in 2004, while at a party in Aspen, I met a guy who ended up laying the foundation for our success at SmartClick.
He wasn’t creepy in any traditional sense, but he was incredibly drunk—like wasted kind of drunk—and when he found out I worked in marketing, he started spinning tales from his work doing online marketing for political campaigns that year.
In between anecdotal conspiracy theories (including how Republican PACs were apparently funding paid search campaigns in support of Democratic primary candidate John Kerry to ensure a “patsy” won the nomination to go up against George W. Bush in the general election), my new friend mentioned something interesting. He said that, because of the unusually strong results he’d been getting with Google’s AdWords product with a very unusual set up, he’d recently been hired by Google to help them understand the strategy behind what he was doing.
Revolutionizing Paid Search with One Keyword Per Ad Group
In a drunken stupor at 4:00 a.m., after a night of hard partying, my new friend began to relate an account setup strategy that was so interesting and innovative that we literally stayed up all night talking about it. He began to relate how the core of his strategy was to set up ad campaigns with ad groups containing just a single keyword. (An ad group allows the user to set up a campaign that shows specific ads to a specific set of keywords.) Setting up an ad group with just one keyword was literally mind-blowing, as this was something that Google had never considered up to that point.
Why was going after just one keyword, with one specific ad for that keyword, so mind blowing? At the time, a typical AdWords campaign might have 10,000 keywords in it, which meant manually setting up 10,000 ad groups one by one—an impossible and insane task—unless you had very specialized expertise in AdWords Editor, which was at the time a brand new tool. AdWords Editor allowed users to build an AdWords campaign in a spreadsheet and upload it to AdWords. Before my conversation with my new friend, what I hadn’t realized was that we could use this tool to build and upload sophisticated campaigns with thousands of keywords, each with their own ad group.
An ad is better when it is more relevant to a consumer because, all other things being equal, it will receive a higher quality score (the score of relevance and ad effectiveness that each keyword phrase in a campaign receives). A keyword with a quality score of 1 may literally have to bid ten times what a keyword with a quality score of 10 would have to; as a keyword’s ad relevance goes up, cost/click goes down, and so cost/conversion goes down. This can mean the difference between paying $100 to convert a sale of $100, to paying just $5 to convert that same customer.
This strategy was so intuitive that we decided to implement this strategy at the adventure travel company I was running at the time, and it worked incredibly well, driving millions in incremental revenue. Suitably vetted, this setup later became the foundation of all our paid search work at SmartClick as well. Shifting all new clients’ paid search accounts from an unsophisticated set up to a one keyword per ad group set up has literally made our clients millions.
Over the years, SmartClick has taken over hundreds of client AdWords accounts that were managed by other agencies or in-house teams. Not a single one of them has had anything close to this granular set up recommended by that drunk Google employee. When we make this big shift in setup to the more advanced format early on in the client relationship, we almost always see significant success with a client.
Granularity in Campaign Setup also Works for Other Online Ad Media
My conversation with the drunk Google employee, which caused us to do a more granular one-keyword per ad group strategy, affected our work far beyond paid search. We realized that with other ad media, a similar, more granular approach could really pay off. In fact, that’s a key theme in what we do at SmartClick—we use a wildly more sophisticated set up than most other agencies would have the patience for.
With Facebook advertising, for example, we’ve been able to perfect the process of bulk uploading ads in Facebook Power Editor to create dozens of different ad test cells for client campaigns each month. We can test different combinations of photo assets, ad copy, and targeting, and find the ideal combinations through rigorous monthly testing. We’ve found that we could only do such a sophisticated set up with the bulk uploading capabilities provided by Facebook Power Editor. That’s a key reason why we’re able drive significant results for clients with Facebook advertising, and why now 75% of SmartClick’s Ad Spend for clients is now on Facebook.
So a simple conversation with a drunk Google employee in Aspen led to our setting up Google campaigns in far more sophisticated ways than we otherwise would have, driving millions in incremental revenue for our clients. This strategy has been one of the key reasons why SmartClick continues to double in revenue each year, without doing any business development. In addition, applying this sophisticated set up on other media platforms like Facebook directly led to even more success.
What’s the lesson here? Perhaps it’s that finding incredibly important information of lasting quality often comes through forming relationships with people in the real world—not by reading a bunch of blog posts. By being open to meeting people and learning from them (and in this case, by giving a drunk person the benefit of the doubt), I learned critical information I would not have ever learned on my own, information that literally made our agency make real impact, stand out from the crowd, and grow beyond my wildest dreams.