There’s a misconception in SEM: that the way to succeed is to focus on performance. This column is intended to make it clear that while the medium is all about measurability, accountability, and performance at the end of the day, you don’t achieve those things just by obsessing about them. Caring about performance may be a necessary condition for achieving it, but as any concert pianist knows, it’s far from sufficient.
The formula boils down as follows.
1. Performance Super Powers
Most of us who do PPC think of it as a performance medium, and indeed pride ourselves for our “chops.” When Seth Godin challenges us to be able to answer the question “what’s your superpower” at a cocktail party, you aren’t allowed to trot out some soft management skills related to a very broad industry that you happen to work in. You need to answer something like:
I know how to test the right calls to action in your creative (or even whether to have a call to action as part of probably fifty things I know how to test in text ad creative alone) in your AdWords campaign, in order to select the one that makes your company the most money, while at the same time keeping the Google relevancy algorithm happy.
That’s a superpower. More succinctly put and in a broader sense, you might say:
I increased this small company’s quality lead flow 400% in one year, and chopped the cost per lead by 60%, by actively optimizing all facets of their SEM campaigns.
Either way, that says “performance.”
2. Performance, Process and Perspective
There isn’t enough focus on performance in many professions, and especially in the one we directly compare ourselves to and think of ourselves as revolutionizing: traditional mass advertising. A suspicion of “process” crops up because it reeks of excuses.
Clients have developed a healthy expectation that digital marketers are lean, mean, performance machines. Unfortunately, the pendulum can swing so far in that direction that the processes and wider perspectives that build that performance and make it integrate well with strategy (and into a proper media mix) get undervalued.
3. Balancing Performance & Process
Process, discipline, leadership, and vision are the heart of superior performance in any field, and pressure to perform often causes performers to “choke”. You see this in athletics all the time. “I expect a hole in one – try harder” isn’t going to help anyone shoot 69 on a golf course.
Repeated practice, feedback, tinkering, and preparation are what lay the foundation for performance down the road.
Canada, despite its vast lead in resources and numbers involved with hockey, lost its advantage to the Europeans for a time, because Canadian hockey programs focused on games and competition over fitness and drills. The old stereotype was that the well-drilled Russians were so schooled in fundamentals that they forgot to score (by “overpassing” – this was true) but Canadians, unless they were to change their ways, would limit their upside potential by failing to perfect fundamentals like passing, failing to train harder to skate faster, etc.
In business, the same is roughly true. In the PPC game, a lot goes on in the background fundamentals that lead to performance. Professionals understand that they’re welcomed by clients because – at the end of the day – they can come back and report solid performance numbers. But they can’t overreact to or choke on the performance focus.
The “choked” account is aptly a double meaning: usually the boss has “choked” or “cut back” on the account manager’s scope of responsibility, leading to a cautious management style. But in addition, the manager now “chokes” instead of performing, out of fear of failure. Ads are paused prematurely, good keywords are paused instead of being massaged with bidding and negatives, the expectation that ad testing and structure will lead to improvement over time gives way to a belief only in tiny segments that turned a visible profit very recently.
There is some point at which a growth mindset crosses the line into recklessness and wastefulness. In your company, that’s a debate worth having.
Personally, I can show you large volume ad groups that I’ve stuck with and fought with for months to take them from ROAS 1.0 to 4.0. Long term, that beats 2.6 on tiny volume, but to be sure, it’s a path to growth with many growing pains.
Some businesses can only “cherry-pick” the most obvious wins. Usually – especially if there is overhead involved in the operation – they’re pushed to the sidelines by the more aggressive players.
The value of scale isn’t something you can easily dismiss. Small may be beautiful, but tiny is invisible.
Hunters vs Farmers
To illustrate further: think of this in terms of analogies from the sales world. Truly integrated sales forces maintain an appropriate balance between new acquisitions and service to existing clients.
Companies that over-reward the “hunters” (sales acquisition people) to the exclusion of customer retention swing to an extreme “churn and burn” mode where this can lead to customer loss, overcompensation of sales executives, and an overall decline in fortunes. Companies at the other end of the spectrum can assign too much credit to the “farmers” – the company name, management, product, and existing service personnel, cutting off any “hunter” function.
A friend that did high-level consulting to telcos once explained to me that this was even used as a strategy to manipulate accounting for a company sale. Slash the sales organization, show an increased profit, and enjoy the apparent profitability of the company as it glides along on reputation and renewals. Eventually, growth would slow to zero, and then shrinkage would set in. (But if your plan was to sell the company, that problem would only be discovered later.)
PPC Keywords: Hunting vs Farming
Your keywords and various segments and experiments in your campaigns need an appropriate balance of investment, as well. Some are “farmers” and some are “hunters.” If your hunters did a great job for you in the past, you may want to pat them on the back, kiss them goodbye, and stick with the farmers.
But the rule is: you farm only what you’ve got, and nothing new ever happens. Compared with most hunting methods, PPC advertising is incredibly inexpensive, responsive, flexible, and transparent.
Process Then Results
To conclude, the problem with much of the advertising world has been a lack of crisp focus on performance and the metrics that would even determine whether the advertising was generating a positive ROI.
The world of SEM is in danger of suffering from the opposite problem: a failure to appreciate and execute on process. If it’s all performance talk all day long, you’ll be like that kid in peewee hockey whose mother keeps screaming at him to “score!” even though he can barely skate.
Process first, then results. (Just remember to score when you’re in front of the net.)