PPC Holy Grail: Direct-placement ads?

Posted on Jul 25, 2008 in IT, Web Dev | 0 comments

PPC, or “Pay Per Click” advertising is huge these days, and rightly so. Everyone searches when using the internet, whether it be Google or Yahoo or Microsoft’s Live Search. This integral feature of the Internet is provided free of charge because these companies get ad revenue from the simple text-based ads that appear along the side of the “organic” results, presented under the moniker “sponsored” results.

The simplicity of the ads—a title, two lines of text, and a URL—belies the complexity of the process by which they appear. I won’t go into it here because (a) you won’t read pages of explanation about keyword analysis, bidding strategies, and grouping of ads to improve quality scores; and (b) you can read a great explanation at O’Reilly’s site if you do want to read pages about it. It suffices to know that it’s an auction: you bid to have your ad appear when someone searches for a relevant keyword. Suppose you sell dog food. Someone searches Yahoo for “dog food,” so you want your ad to appear so they can click it and, with any luck, buy 50 lbs. of your kibble.

The auction is tricky. There’s lots to it and even if you make it in the list consistently, you might get shaken out of position by a newcomer. Is there a better way? Well, some companies offer “direct-placement” ads. These are the same ads, but these companies guarantee they’ll appear in one of the top 3 positions for whichever set of keywords (or phrases) you pay for. Seems good, right? Then why doesn’t everyone do it?

I investigated one of these companies, Nett Solutions, after a cold-call from them. I was skeptical. I’d never heard of direct-placement ads and their model flew in the face of the search engine’s auction model. But, I was curious. I spoke with a PPC campaign manager who told me even it were possible, the keyphrases they’d be able to offer would be so obscure as to be worthless (imagine buying “purple dog house”—no one’s searching for that so it’s worthless if you sell dog houses). I read dozens of forum posts on search engine sites about people who’d been burned by scam companies selling this service. Most of those discussed customers’ sites’ rankings being hurt—or removed altogether—because the scam companies achieved their goals temporarily by gaming the search engines’s systems. I even spoke to my Google AdWords representative, who told me flat-out “Google does not participate in direct-placement ads.” Fair enough, I thought. It can’t be done (at least legitimately). I included this info in my recommendation of PPC-management vendors. But my manager was curious (he knew a thing or two about Internet marketing) and wanted to call their bluff. “Uhhh, okay” I said and began working with Nett Solutions.

This post is getting long, so I’ll summarize in three points:

1. It worked – We chose seven keyphrases—relevant ones, too. We were given a price for each (on the order of a few hundred dollars a month) and paid a very modest start-up fee of $100. Within a few days the ads were up. We checked night and day, from various computers—even had out-of-state friends look. The ads were always there and I never saw it outside of the first position (above the organic listings) after a few days. I was impressed.
2. It didn’t work – Despite this, our click-throughs (CTs) were abysmal. After a few weeks I asked for a report of impressions so we could see whether the (a) ads weren’t being seen that often so our CTs were low, or (b) our ads were being seen but they weren’t compelling (I gotta say, they were). Nett Solutions couldn’t provide one. “Wait until three months,” they said. That’s ridiculous. I pressed on and finally got one after two months. Kind of. It only provided CTs, not impressions. The CTs were about 10x higher than our web metrics reported (I’d set up special URLs for the ads to better track the results). When I asked about the discrepancy and why no impressions were included, I was instead given a sales pitch to help create better landing pages for the campaigns.
3. Salesy - They were very much focused on sales. The first guy I spoke to was a salesman. He talked a lot about the reporting we’d get when I asked about it, but once the deal was sealed I never spoke to him again. I worked with an account manager who, as mentioned, tried to sell me on landing page assistance rather than answer my questions. Yet another person–the most honest of the group—actually created the ads. Or, I should say fixed the ads because the first batch went live without me writing, approving, or even seeing them.

To be fair, they did everything they said they would. No impressions were guaranteed or even suggested, and they did say that campaign reports wouldn’t be available for three months (but the sales guy did say he could get them for me when I asked). And they respected my cancellation request without any trouble.

So, if I’m ever asked about direct-placement ads I’ll answer: yep, they “work,” but I wouldn’t go that route. Money is much better spent on hiring a reputable PPC management company. It’s transparent (both you and the company can access the advertising interface) and there’s no games.