Expert Interview – Essentials of Paid Search

Want to understand paid search without all the marketing mumbo jumbo? Need ad advice without the fluff? We’ve got just the man for you.

Marcus Hemsley co-founded Fountain in 2008. Since then, Fountain has grown into a 40+ strong team of dedicated digital marketers, working across the world.

With Marcus as Creative Director, Fountain have won multiple awards, including twice being the global winner of Google’s GROWING BUSINESS ONLINE award.

Impressive stuff.

To Marcus, marketing is all about figures and results. He can’t abide by the ‘fluffy’ approach that many agencies take. We get to the nitty-gritty of paid search from the guy who really knows his onions.

DO YOU HAVE A STANDARD FORMULA WHEN IT COMES TO SETTING UP A PAID SEARCH CAMPAIGN?

“Yes, that was the reason for coming up with what I call the three most important numbers in digital marketing, which are CPA (Cost Per Acquisition), CPC (Cost Per Click), and Conversion Rate Required.

At the end of the day, it’s all about reducing risk.

When I first start talking with clients, what’s really in the back of my head is  “just give me the cost per acquisition”.

I’m sitting there, with my adwords and keyword planner in front of me, so I already know what the CPC for them will be, and I can guestimate what it will be for Facebook/LinkedIn.

The way that I look at digital marketing is that everything should be put through the metric of CPC.

What I mean by that is that SEO, content and organic social media should all be a part of the equation. For example, if you are paying an agency to do SEO for £1k a month and the uplift is 1000 extra visitors, then CPC is £1.”

HOW MANY PEOPLE ACTUALLY KNOW THEIR COST PER ACQUISITION?

“I’d say about 5%. So it’s really very low.”

HOW DOES THAT AFFECT YOUR PROCESS, DO YOU ASK THEM TO GO AWAY AND COME BACK, OR DO YOU HELP THEM THROUGH IT?

“We will try and help them through it as much as possible.

We also try to make sure that they are thinking in terms of customer life cycle rather than just a one-off purchase.

For example, you’ve received £1000 total revenue from a sale, and the net profit is £300. However, the average customer buys 10 times so that’s £3k total net profit, so 33% of that is £1k.

But actually the sale cost of the first sale is £1k, so some people struggle with this, and think “shit, we are losing money”. However, in the long run, they remain profitable.

THE NUMBERS ADD UP

But really, for us, it’s those three numbers. They’re the only thing you need to work out to decide if something is viable or not.

The interesting thing about those three numbers is that they help optimise and troubleshoot, people say “oh the CPA is too high for the target” so we say,  “okay is it a traffic issue, or a conversion issue?”

Basically, we ask “is the CPC too high or conversion rate too low?”

Then we can work out what needs to be changed. And often it’s both.

But that’s what we are doing, refining that process. It means the traffic team are sending better quality traffic for less money each month. And the conversion team are increasing the volume of leads per month, too.

What I love about these three numbers, are that they really are all you need, as once you have those you can understand how to build a digital marketing strategy and campaign.

You can also break it down into much smaller chunks. So, if you wanted to work out the conversion rate from calls coming in from paid advertising, you would start with the CPC. Then take the conversion rate from the click to the phone call. And finally work out what the conversion rate from phone call to sale is.

WHERE IT GOES WRONG

A lot of people go wrong if they don’t draw out funnels.

As soon as you hear vague numbers, you can be certain that you won’t get the best results that you could, in fact without the numbers backing up any campaign it has a high probability of failure.

I mean that’s really all we are doing; reducing risk.

By having those numbers I can say, for example, “okay CPA is £100, CPC is £0.50, that’s 1/200 clicks, (so 0.5%) need to buy.”

Then I can look people in the eye and say  “give me your money, I’m confident we can hit your targets.”

WHAT THE FINAL PROCESS LOOKS LIKE

“Going back to the process, we normally get a basic CPA. One of the things we say at Fountain is to give a basic scale – so if the client really doesn’t know, we ask them:

“Okay, is the CPA £5, £50 or £500?”

Based on that, people will usually have a much clearer idea, and then you’ll have a ballpark to work with.  Then I’ll get on Keyword Planner and see, for example, the CPC is £5. So, assuming the CPA is £500, the conversion rate required is 1%.

Okay.  So now we know it’s viable and we can delve a little deeper. Let’s look at keywords. Let’s look at audiences on Facebook and LinkedIn. Let’s look at organic traffic.

These are all things that we can do. Then we actually build the strategy based on forecasting and numbers. To be honest, we turn away about 60% of people because the numbers don’t stack up. It’s a hard call, but digital marketing doesn’t work for the majority of businesses because someone is doing it better than them, driving up the cost per click.”

WHAT’S THE MOST PERFECT AD CAMPAIGN YOU’VE SEEN?

I don’t think I’ve seen one. I mean, I’ve seen good campaigns. But I always think that there is room for improvement. I do see campaigns and think “yes, they have the right mindset”, but truth be told, most marketers are a bit lazy.

Once a campaign starts to hit its target, people start to think: okay, I can take my foot off the pedal here. The client’s happy, so I can take it a bit easier and maybe put some more resources into clients that aren’t doing so well.

I’ve yet to see an ad that’s perfect and cannot be bettered. It can always be better.”

WHAT KIND OF RESOURCES WOULD YOU RECOMMEND TO SMALLER COMPANIES, NOT READY FOR AN AGENCY?

“AdWords Express is really useful for PPC, as there’s a whole ad library available for people starting out. Google have realised that there is a section of business that should be using paid AdWords but can’t afford PPC consultants, copywriters or agencies.

In terms of tools and software, if you are going to do Adwords, you do need someone who knows what they are doing to help you, to be honest. There aren’t actually that many options for starting out. Everything that springs to mind is quite advanced optimisation software.

But with my small business owner’s hat on, the things I would recommend are: to get Yomdel managed live chat on your site, making the most of traffic that is already on your site.

You only pay per lead, and you have people around the world answering your potential clients, day and night. That usually have a 1-2% conversion rate.

The other thing I’d do is pay an agency or freelancer to do remarketing for you.

Make sure you have banner ads and maybe a YouTube video following people around. You can take a look at Google’s recommendations here. Basically, what I’m talking about is low cost, high impact things. Even just hiring a copywriter to rewrite your landing pages will exponentially help.

Smaller businesses will still be getting a couple of thousand visitors a month. If it doesn’t have things like live chat, or well-written copy, or no remarketing, then you are missing a trick. These are the quickest wins. That’s where I’d start for a good return on investment. If you do want to do Adwords yourself, use AdWords express. There are some really nice quick wins that people should be doing.”

SO TELL US ABOUT THE GOOGLE AWARDS

“What makes us different is that none of us have come from an agency before, so we come with a blank slate. So we posed the question, what does a perfect agency look like?

Well for me, it has to be a performance agency. We must be totally transparent with our clients.

We forecast upfront to take the risk out of marketing, then measure everything, optimising each stage of the funnel to bring the most profitable customers for our clients.

This approach of minimising the downside and maximise the upside, got us through to the finals of Google’s Premier Partner Awards, winning in EMEA then being flown out to New York for the Global Final.  We were up against 1100 Premier Partner Agencies from 58 different countries. And we won best Agency for Growing Businesses Online in the world.

It was amazing.”

So there you have it, an inside peek into making your paid advertising actually work. Look out for our next expert interview about the importance of branding.

Love you,

Konrad