Richard Stokes, Founder, President, and Chief Gooroo of AdGooroo explains common mistakes people make in search marketing campaigns and what you can do to fix them.

There are over 850,000 companies advertising their goods and services on the search engines this month (September, 2009) yet only a handful truly excel at it. At AdGooroo, we monitor virtually every advertiser in the world and see some common mistakes. Here are the top five which can stop your campaign dead in its tracks!

Mistake #1: Failing to Track Your Visitors

Pretend for a moment that instead of promoting your business over the web, you were to take a more traditional approach such as television advertising. You might be prepared to spend upwards of a quarter million dollars just for production, to be followed by potentially millions of dollars of national media buys.

With so much at stake, it seems unlikely that you would simply write a check and forget about it. Not by a long shot. I bet that you’d be watching the sales figures like a hawk to see if your campaign was bringing customers in. And if it didn’t perform, you’d cut your losses quickly (and probably fire your marketing manager.)

Most of our businesses will never grow to the scale where we can afford big-ticket television buys. Fortunately, internet advertising now gives us a way to purchase smaller, more reasonably priced blocks of traffic.

The downside of this is that these less expensive campaigns tend to fall off the radar of most managers and entrepreneurs. There is a false sense of security that comes from spending “only” $500 a month or so on search. We tell ourselves, “Maybe it will come in, maybe it won’t,” or “Let’s just start it and see what happens.”

This is nothing more than a shortcut to failure and I don’t want you to fall into that trap. So please take this firm, but friendly, piece of advice:

If you don’t track your campaign… you will lose. Period.

If you blow off the numbers behind your business, your marketing will be mediocre because it will be built on opinion and guesswork.

Guesses and opinions are the enemy of good marketing. If you let the numbers tell you the truth, you’ll make your website better. You’ll make your advertising better. Your sales will end up 5x, 10x, even 100x over where you started.

Mistake #2: Trying to Save a Bad Website with PPC Advertising

Hands down, the surest way to improve your PPC results is to improve the efficiency at which your website converts visitors into buyers.

Too many marketers hope that adding an AdWords campaign will redeem a low-performing website or product. If that doesn’t fix their business, they compound their error by raising their bids. They make the same mistake that many “dot com” companies made during the late ‘90s; they pour money into a losing business in a mistaken attempt to “grow to profitability”.

To do it right, you have to accept pay-per-click advertising for what it is: a way to multiply your existing business. If you add PPC to a bad business, you’ll simply lose money faster.
On the other hand, if you add PPC to a good business, you will make more money… if you do it right.

A proven technique for improving the efficiency of your online business is through website optimization. Website optimization is the art and science of enhancing the user experience of a website with the goal of converting visitors into customers.

There are several good books on the subject. One I recommend is Tim Ash’s book, “Landing Page Optimization.” Tim’s book is quite in-depth, so I’ve also written an extensive treatment of the subject aimed at time-pressed website managers in my upcoming book, “The Ultimate Guide to Pay-Per-Click Advertising” (Entrepreneur Press, February 2010.)

Mistake #3: Targeting Too Few Keywords

In both organic and paid search marketing, keywords are the bait that lures prospective customers to your Web site.

People will find your site based on the keywords where your ads appear. For this reason alone, it’s important to expand your campaign with as many relevant terms as possible. Yet according to Marketing Sherpa, the average B2B (business-to-business) advertiser only bids on fifty terms. This is not a recipe for success!

Keyword selection may not be the most important success factor for paid search, but it’s certainly in the top five. The time you spend perfecting your keyword list will dramatically improve the potential results of your pay-per-click advertising campaign.

There are many good tools for this. Some are free, some are not. In the free category are the Google AdWords keyword suggestion tool. In the paid category are WordTracker and AdGooroo. Each of these tools generate keyword suggestions in different ways and the resulting lists are very distinct from one another, so you should try to use several tools to get the best coverage possible.

Mistake #4: Gladiator Bidding

Gladiator bidding refers to the practice some marketers have of trying to buy the top spots at any cost and without regard to ad quality. This is often the mentality at large corporations who are long on dollars and short on search expertise.

What ends up happening in these cases is that the advertiser succeeds at capturing the top side ad placement and pushes other, higher-quality advertisers further down the page. However, their low quality score fails to secure them the coveted premium ad spot (above the organic results) and it ensures they will pay a price close to their maximum bid.

I cover the math and provide some in-depth examples of this in my book, but the takeaway here is that Gladiator bidders pay a 48% premium over the expected CPC price. Yes, you can buy that #1 spot, but you will pay dearly for it.

Mistake #5: Ignoring the competition

Gone are the days when you could run your pay-per-click campaigns in a silo. The search engines’ increasing focus on relevance as well as high demand for ad placement means that advertisers are judged against one another to determine which ads will be shown and which will not.

If you want to take a bigger bite of the apple than your competitors, you have to keep close tabs on them. This practice is known as Search Engine Intelligence (or SEI for short).

At a tactical level, you need to know when competitors are making improvements to their quality score and bids. As they succeed in doing so, your relative advantage to them will be diminished. Having even one competitor close the gap can put the hurt on your campaign. Having a few do it can be catastrophic. This is the main reason why campaigns which are left to their own devices invariably decline after a few months.

The price you pay for your ads is determined in no small part by your competitors’ aggressiveness and the ratio of your optimization efforts to theirs. Your quality score relative to other advertisers in your industry also determines the placement of your ads and the amount of traffic you’ll receive from paid search. And finally, it also plays a huge role in determining how much of the available search traffic your ads will be exposed to (coverage.)

Another important tactical benefit of watching your competitors is that it allows you to defend against such tactics as bid jamming, which can result in dramatic drops in impressions and clickthrough rates, or even result in your being banned from valuable keywords altogether.

Paying attention to competitors’ paid search efforts can pay off strategically as well. Because PPC is so measurable, many companies test new products, features, and services on the search engines prior to widespread launch. You can get advance notice of these changes if you’re watchful.

You can also use paid search to peek inside of your competitors’ business models. If a competitor launches a new pricing model or brand while aggressively increasing CPCs, keep a close eye on them for awhile. If they later drop CPCs and/or pull the model, you’ve found something which didn’t work. Our competitors have saved us countless times at AdGooroo from launching features which the market truly didn’t want.

This wraps it up for our discussion on common mistakes. There are others of course, but most search advertisers would be well served by simply focusing on these basic rules. Good luck in your online marketing efforts!

About the author: Richard Stokes is a long-time internet marketer over 15 years experience in technology and advertising management. He founded AdGooroo, a leading search intelligence company, in 2004. He was previously a technology executive at Publicis Groupe/Leo Burnett. He has a BS in Computer Engineering from the University of Illinois and an MBA in Entrepreneurship and Technology Management from the Kellogg Graduate School of Management at Northwestern University. Richard is a regular speaker on search marketing topics, is a certified expert in both email marketing and conversion optimization, and is the author of “Mastering Search Advertising – How the Top 3% of Search Advertisers Dominate Google AdWords”.