Recently, a retailer was seeking to sell very high-end (>$1500) wireless speakers that were highly integrated with Apple’s iPod™. In developing a product’s marketing strategy, we conducted competitive research starting with some basic Google searches. Unsurprisingly, the Paid Search results included the manufacturer, Apple and a number of high-end electronic retailers.
However, the 3rd Paid Search advertisement was a firm specializing in providing speaking engagements involving celebrities even though our searches contained the manufacturer and the word ‘Wireless’. Many marketing professionals would simply dismiss this as an unintended consequence of Paid Search as the speaking engagement firm just bid on keywords involving ‘speakers’ which, of course, overlaps with electronic speakers. After all, what is the harm in having that ad show even as consumers are seeking speakers for playing music?
The harm – not understood by most agencies – is that Google punishes advertisers who are showing ads with low relevance to the consumer. The punishment is not limited to a handful a ‘bad’ paid clicks. The real punishment is that Google charges a higher cost per click (CPC) to achieve the same position in the search results. In other words, your overall ad relevance, drives not only your position but also the costs those advertisers must pay for that position.
At Anova Group, we see situations where advertisers are paying $2.50 a click while only achieving a position of 3-4. Most marketing agencies simply dismiss this as a highly competitive situation. However, through our statistically proven techniques, we are able to improve the relevance of those ads to consumer. Google rewards ad relevance by reducing the costs per click (Anova Group typically sees a 25% reduction) while at the same improves the advertiser’s paid search position.
This example is just one reason on why your return on your digital marketing investment may be sub-optimized. If you are wondering whether your return could be improved, you may want to speak with us about our Digital Marketing Health Check.
Posted by Randy Higgins
