The Perceptus Back Story

We’ve run Google AdWords campaigns for years.  Currently, by far, our largest online advertising campaign is our Print-Bingo.com campaign on Google AdWords.  We do run ads on the Microsoft+Yahoo platform, but that hasn’t been worth the effort to work on optimizing, it’s hard to see any real ROI on these.

A couple months ago, Google offered AdWords users an incentive to add the conversion tracking JavaScript snippet to our campaigns.  With conversion tracking, Google will track which advertising clicks lead to actual sales, in our case, we are counting upgrades to Premium access to Print-Bingo.com.  In theory, Google will optimize our bids, both up and down, to match based on geography, time of day, search phrases, and potentially more, so that our cost per acquisition is optimized.  We still pay for every click in CPA; however, Google tries to get us the best ROI  for our clicks.  The alternative on Google, is the traditional cost per click advertising, where we set a maximum bid for a click and find some other way to make sure that we are getting a positive return on our ad dollars.

Since it was on the to-do list anyway, we took up the offer to add CPA tracking.  We’re glad that we did… probably.

We’re only a couple weeks into the process, and we’ve seen Google start to adjust the bidding.  Search ads do much better than the content network – we knew this already, but we underestimated the difference in ROI.  Our average cost per click is going up; however, our total spend is about even.  It seems that higher spots in the advertising have a better ROI. And our conversions are at least even, if not up moderately.

Note that we do have a couple months of tracking data in the system before we turned on the CPA bidding. So we are trying to  compare apples-to-apples when we count the number of conversions over a period of time. It is a bit worrisome, we’re putting quite a lot of trust that Google won’t try to cheat us; but what can you do… ROI is ROI.

There is a hole in this setup.  Print-Bingo.com generates revenue from advertising, and we benefit greatly from word of mouth referrals by both paid and unpaid users.  Since we are only tracking Premium users, we’re not giving a value to the free-level users that visit our site from ad clicks.

In the end, we’re tentatively switching to CPA bidding.  We might even increase the advertising budget if the numbers hold up.  We might add a second, parallel, campaign, aimed at getting cheap clicks from the content network… maybe.

We’ve run campaigns for print-bingo.com on Google AdWords from day 1.  Actually, we ran ads before the site was even on the print-bingo.com domain.  So, it’s been years.

We learned this week that Google has quality checks to make sure that AdWords customers are running legitimate websites.  I.e. they don’t want to sell advertising to scammers, malware installers, virus tricksters, and whatever Google deems to be low quality sites.  As with all things Google, these are highly automated processes. This quality score concept  makes sense –  I would be less likely to click on ads if there was a chance that the landing page was virus laden.

Apparently,  after our large edits to print-bingo.com in  August, we tripped the quality scanner and our AdWords campaigns  were turned off.  We sent a support request in to Google and a few days later, after a manual review, our ads are now running again.  Yay!  More advertising expenses.  :)

The strangest thing is that we didn’t even notice for two weeks.  We’re happy to say that sales are up so much year over year, that we just didn’t notice.  It did seem weird that we weren’t getting many (in retrospect, zero) referrals from Google AdWords that lead to conversions, but that happens some days, so it didn’t shout problem.

What’s the point of this post?  Well, actually, I think we’re bragging about our increased sales.  But on a practical note, make sure you watch your campaigns – I couldn’t find a way to get email notifications, but it might be buried in the interface somewhere.  You can always watch your logs.  Anyway, the point is, even if things are going well, it’s possible that they could still go better.

Technical notes: If you want to see when you’ve been visited by the quality bot?  Check your web access logs for the user agent AdsBot-Google.

I received an interesting, possibly exciting and expensive email from YSM today. Apparently, the minimum bid of $0.10 will be disappearing on many terms in the future.  Here’s a snippet from the email:

Pricing Update:
Minimum Bids will no Longer be Fixed at $.10

Starting in the next several weeks, the minimum bids for a number of Sponsored Search keywords will no longer be fixed at $.10. Your new minimum bids can be lower or higher than $.10. Content Match minimum bids currently will remain at $.10.

I wrote in a previous post about advertising pricing that Perceptus would spend several times more on advertising if the $0.1 minimum bid was reduced or dropped.  Well, true to my word, I’m logging into our Yahoo Search Marketing account right now to clean up our advertising spots in anticipation of the pricing changes.

There are a couple ways to interpret this change, here are a few of my theories:

1. this was an inevitable evolution of Yahoo’s advertising service that they’ve finally gotten around to implementing
2. advertisers are pulling out of the online advertising market or reducing bids due to economic conditions
3. Yahoo was loosing certain segments to Google due to lower costs per click
4. Yahoo wants to boost account counts to ward off the Microsoft bid
5. Yahoo read our blog and decided that Perceptus was right, and that $0.1 clicks don’t make sense in all cases

These are purely random guesses on my part. While I wish it was point 5, I think it’s a  combination of items 1-4.

Having said that, over the last month, our Google AdSense revenues are down and our AdWords costs are down noticeably. I wonder if online advertising is more sensitive to the economy than other advertising media.  I can turn off pay per click advertising campaigns in 5 minutes.  How many weeks does it take to reduce or cancel TV, radio, and newspaper advertising?  Anyway, those ponderings belong on our non-existent financial blog.

IMHO, Canadian businesses are at a disadvantage compared to Americans. It’s the little things that complicate life, especially for small firms that don’t have the time or resources to properly deal with it.

Today, I discovered a new trap for Canadians who advertise on Google AdWords to Americans like we do.  We advertise heavily outside of Canada, especially for print-bingo.com since the vast vast majority of it’s customers are from outside of Canada*.

The hidden trap? Competitors who don’t buy ad placements for Canadians searching on Google. Let me clarify.

Like every good marketer, I check my ad placements for a key search terms. Google is smart and knows that I’m searching from Canada. So it only shows me ads for businesses (i.e. competitors) that have explicitly enabled their campaigns to play in Canada. Many American firms won’t do this, so I never see their ads.

Long story short, I just realized that when people in America (and elsewhere) search Google for terms that we bid on, our advertising placement is lower than what I see when I make the search!

To test this, find a way to browse the web from an American IP address. I used a (private) proxy server. If you’re not that technically inclined? Ask an American friend. Or maybe find a free proxy based in the US? Or maybe hire us, Perceptus Solutions Inc., for a consult.

So, watch out Canadians. If you’re not checking, your web advertising placements in the USA might not be what you think they are!

Someday I’ll blog about a few other Canadian issues we’ve had, especially how we reduced our currency exchange fees last year. Hint: Google gives really fair exchange rates.

* Yay! I guess we’re an “exporter”!

I decided to split up my previous blog post to pull out the pricing thoughts from the point of view of us, Perceptus Solutions Inc., who’s primary online advertising campaigns are for print-bingo.com. We sell Premium access to our web based bingo card generator for $10. At that low cost, we have to be careful with what we bid on for search engine advertising clicks.

Technically, we have ad campaigns for print-bingo.com on Google AdWords, Yahoo Search Marketing, and Microsoft AdCenter. I say technically, because we spend about 20 times more with Google than we spend on YSM (formerly Overture) and Microsoft AdCenter combined.

If you search on Google for various bingo card terms such as “bingo cards”, “print bingo cards”, “bingo sheets”, and about a hundred other terms you will probably see a Google AdWords ad for print-bingo.com. Don’t click on it, it’ll cost us a nickel. :)

Yahoo Search Marketing has a minimum bid on any search term of $0.10. At 10 cents per click, it is debatable whether or not there is a positive return on investment. Thus we are highly selective with the terms we bid on. Because of this, we pay very little to Yahoo every month, in exchange for very few visitors.

On the other hand, Google has no minimum bid, and we can thus bid on a lot of terms that we don’t bid on on other networks. We pay for hundreds of clicks every day on Google and we definitely get a return on investment on those clicks.

To YSM and Microsoft: not every search term is worth $0.1 a click. We would literally spend 20 times as much on advertising with YSM if the minimum bid was closer to $.05.