1. Microsoft Confidential
Core Concepts of Paid Search
John Gagnon
@jmgagnon

2. @jmgagnon @bingads
Step back. Look up.
@jmgagnon | @bingads
Step back and look up

3. Black Friday in the parking lot
@jmgagnon | @bingads| #SESDenver @jmgagnon

4. John Gagnon
BLOGGER
FORMER GOOGLE GUY, SEARCH CAMPAIGN MANAGER, DATA ANALYST
SPEAKER
@jmgagnon | @bingads

5. How much do auto insurers
pay per click to run their
ads on Bing?
Microsoft Confidential @jmgagnon

6. Keyword:
Cost per click: $50+
Cheap Auto Insurance
Microsoft Confidential @jmgagnon

7. Microsoft Confidential
What we’re talking about today
Ad CopySearch FunnelValue a Click
@jmgagnon

8. People Looking for
Products/Services
Business Offering Services
Willing to pay
Right info
Right time
Good exp.
@jmgagnon

9. Microsoft Confidential
Anatomy of a search page:
Query, Search term,
Keywords
Sponsored results
(paid ads)
Organic results
(non-paid listing)
Local listing, free to
businesses that sign up
@jmgagnon

10. On Bing
click-through-rate for
the #1 search result is
9.7%. For the #4 result,
it drops to 1.9%.3
60%
of all organic
clicks go to the
top three organic
search results.2
75%
of users
never scroll
past the first
page of results.1
Why is SEO and SEM such a big deal?
SEO and SEM has one goal: To move websites to the top of the search results page.
1. HubSpot May 2012; 2. Marketingsherpa, February 2007;
3. Slingshot SEO December 2011
Microsoft Confidential
@jmgagnon

11. How much does
Jimmy Choo
pay per click
to run shoe ads
on Bing?
@jmgagnon

12. How much does
Jimmy Choo
pay per click
to run shoe ads
on Bing?
Keyword:
Cost per click: $1-$2
Jimmy Choo Shoes
@jmgagnon

13. Microsoft Confidential
Why: Margins + customers, not clicks
@jmgagnon
Product Revenue
$150 - $400
per month for 6+
$600+
Margin
$400
$100
Of 100 Clicks,
how many Sales
12
1-2 prefer buy in-store
window shoppers
Compare online
and buy
Product
Auto Insurance
Jimmy Choo

14. Microsoft Confidential
Translate business terms into online marketing concept
@jmgagnon
CPA
$400
$100
Conversion Rate
12% or 0.12
1% or 0.01
2% or 0.02
Cost per Click
$48
$1.00
$2.00
Margin
per Sale
Sales per
100 Clicks Pay per Click
Product
Auto Insurance
Jimmy Choo

15. Microsoft Confidential
Above the fold or below the fold:
where would you rather be?
@jmgagnon

16. There’s good reason to fight for the top
73%
19%
6%
2%
@jmgagnon

17. 0
100
200
300
1 2 3 4 5 6 7 8 9 10
Clicks
Position
Example: Number of clicks by Position
@jmgagnon

18. Microsoft Confidential
Be #1: Break even CPC
@jmgagnon

19. Advice: “Start with a Joke”
Perfect! There are 1000’s of Lawyer Jokes!
@jmgagnon

20. Introducing... Negative KWs

21. How much money
you make per action
Conversions per click
The most you can
responsibly pay for a click
– and still make money
CPA CVRx = Break-even CPC
Calculate your break-even CPC
@jmgagnon

22. Break-even CPC
= $1
Break-even CPC
Sale price: $35
Cost to London Fog-$10
CPA $25
CPA
X =
For every 100 clicks, the
ad gets 4 conversions.
CVR = 4%
CVR
This is London Fog’s
profit from the sale.
If you pay more than
this per click, you’re
losing money
Break-even CPC makes you smarter with your dollars
@jmgagnon

23. CPA Conversion
Rate
Break-even
CPC
$25 4% $1.00
$25 4.5% $1.12
$25 5% $1.25
Increase conversion rate or CPA (aka margin)
How do we increase our break-even CPC?
x
x
x
=
=
=
@jmgagnon

24. Landing page testing
How do we increase our conversion rate?
@jmgagnon

25. Microsoft Confidential
Search Funnel
@jmgagnon

26. 26
Search Page
Search
1 2Search Box Convert4Landing Page3
From landing
page makes
purchase
From search
page clicks
on ad
From search
box ad shows
on search page
called called called
Click ConversionImpression
Searcher’s Flow
@jmgagnon

27. Search Page
Search
1 2Search Box Convert4Landing Page3
Clicks
Clicks
Conversions
Impressions
How many clicks you get per 100
impressions. Helps indicate the
effectiveness of your ad copy
How many conversions you get per
100 clicks. Helps indicate the
effectiveness of your landing page
=Click thru Rate =Conversion Rate
Impression ConversionClick
Searcher’s Flow
@jmgagnon

28. 28
Search Page
Search
1 2Search Box Convert4Landing Page3
Step #1 matters. What are they looking for?
@jmgagnon

29. Initial Research:
“Advertise My Business”
Specific Field:
“Online Marketing Tips”
Add More Refinement:
“Search Marketing”
Specific Brand:
“Advertise on Bing”
How do you search?
@jmgagnon

30. Initial Research:
“Advertise My Business”
Specific Field:
“Online Marketing Tips”
Add More Detail:
“Search Marketing”
Specific Brand:
“Advertise on Bing”
Funnel: Not all keywords alike
Purchase
Interest
@jmgagnon

31. Initial Research:
“advertise business”
Specific Brand:
“Advertise on Bing”
Advertise
Market
Paid Search
Sponsored
Search Marketing
SEM
Bing
Yahoo
Specific Field Name:
“Search Marketing”
Add More Refinement:
“Online Marketing
Tips”
Online
Internet
Pay per click
PPC
adCenter
Account Outline
@jmgagnon

32. 3 Minute Drill
• Write down the most important
services/products that make sense for
you to sell online.
• What are some differences between
you& your competitors? Awards? Family
Business?
• Seasonal Offers or Promotions?
• What are your goals for online? How
much is a lead/sale worth?
• When are your peak times?
32
Keywords
Bid
Ad Copy
@jmgagnon

33. 2 Key Building Blocks
• Keywords. What are your
customers searching?
• Ad Copy. In a few characters, tell
your customers why they should
buy from you and not your
competitors.
33
Seattle Florist
Seattle Florists
Flowers in Seattle
Red Roses
Wedding Florist
Flower Delivery
Floral Arrangements
Seattle Florist
Same day Seattle flower delivery.
Courteous Reliable Family Florist.
www.meritflorist.com
A wizard will help you walkthrough how to set these up. There are tools
for generating keywords. And you may wish to look for ideas from your
competitors for ads.
@jmgagnon

34. Think of Ad Group like a Product, Service
or Brand
• Example: Seattle Florist, Red Roses, Wedding
Florist, Flower Delivery, Nursery/Seed, Floral
Arrangements, Cookie Platters
Good Rule of Thumb
• 10-30 keywords per ad group
• 2-4 Ads per ad group
• Match your ad to what people are searching for
34
Keyword Ad Copy
Keyword
Keyword
Keyword
Ad Copy
Ad Group
Wedding
Florist
Quick
Quote
Seattle
Wedding Florist
Wedding
Flowers
Wedding
Bouquet
Seattle
Bride
Product:
Weddings
AD:
AD:
KW:
KW:
KW:
KW:
Build a Solid Foundation
@jmgagnon

35. Microsoft Confidential
Effective Ads
@jmgagnon

36. 36
Seattle Florist
Same day local flower delivery.
Courteous Reliable Family Florist.
www.meritflorist.com
Test which messages
your customers
respond to most.
A.
Seattle Family Florist
Same Day Seattle Delivery. A Reliable
Family Florist For Mom
www.MeritFlorist.com
B.
7 Clicks/ 100 Impressions
11 Clicks/ 100 Impressions
Test and Repeat
@jmgagnon

37. How do we break down an online program to drive sales?
Visit: www.BoostCTR.com
@jmgagnon

38. How do we break down an online program to drive sales?
AD COPY TESTING FRAMEWORK
@jmgagnon

39. Microsoft Confidential
The framework for ad copy testing
®
Probability of
conversion
Clarity of the
value proposition
(why)
Friction of
elements of
process
Motivation of
the user
(when)
Incentive to
take action
Anxiety about
entering
information
C = 4m + 3v + 2(i-f) -2a
@jmgagnon

40. The framework in action
FOCUS
VALUE PROP
ANXIETY
FRICTION
INCENTIVE
MESSAGING
High Quality, Durable, Best Selling
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Over 5,000 items, Huge Selection
Since 1984, As Seen on TV, NY Times
No Booking Fees, One-time, No Minimum
Ends by Date, Limited Time
Missing Out, Don’t, Why
Ships Within 1 Day, Inventory Available
Free returns, 30 day returns, no hassle
Within Minutes, Quick & Easy, 3 Steps
Up to 50% off, Save Extra 25%
Free Whitepaper, Buy One Get One
Free Shipping, Free Overnight
TACTICS
Quality
Low Price
Selection
Credibility
No Hidden Fees
Time Limit
Highlight Loss vs. Gain
Quick Turnaround
Return Policy
Ease of Use
Discount
Freebie
Free Shipping
@jmgagnon

41. Microsoft Confidential
What we’ve covered
Ad CopySearch FunnelValue a Click
@jmgagnon