John Akerson's Thoughts

Business, technology and life

Less Clicks: Good and Bad

Having less clicks in an advertising campaign can be both good and bad, but not for the most obvious reasons. It is important to remember the business objective behind the advertising so that when you create an advertising campaign, so you can use the campaign to reach those objectives. It is important to measure those objectives and it is important to try to improve your results.   There are times when fewer clicks can be good for meeting a business objective. So lets talk about clicks. 

Generally when you develop a Google ad campaign, your ads are shown on Google as a response to a search, and you pay when people click on your advertisement. (generally meaning that they are taken to the particular landing page on your site where you try to convert that click, and that specific interest in your products and services into an action – a sale, a registration, brand building or whatever)

The theory behind developing your advertisement is to develop the ad that converts the highest possible percentage of ad-views into ad-clicks. Here is an example: If you have 1000 people search for “Buick Regal” in Winston Salem, NC, and you sell Buick Regals in or near Winston Salem, NC,  and you develop an ad campaign, you want to get a high percentage of those people to click on your advertisement.  You might have a text based ad campaign that says something like this current campaign from Vestal Cars:

2010 Buick Regal
Get your Buick Regal Internet Price
Now & call For Special Incentives
VestalCars.com

If you click on Vestal’s advertisement, you come to an inventory page that shows their current inventory of Buick Regal automobiles.  That seems well formatted, well directed, and as effective as possible. If someone is searching for a Buick Regal to purchase, Vestal Cars is showing them exactly those cars, in that location. If a potential customer searches for that, and clicks that, Vestal has done everything right to (a) convert views to clicks, and (b) convert clicks to action.   In this case, the business objective is to sell cars.  To sell cars, they need customers to consider their cars, to look at their cars, to visit their car lots, and ultimately to find a car they want.   Vestal Cars wants to get people who are already searching on Google for a particular car to see their inventory of that car.  Their thought is likely that a person searching for a particular model of car is apt to be interested in that particular car. In the nebulous world of search-advertising, that is a pretty logical assumption, and I think their well-crafted advertisement is as likely to sell cars for them as anything.  I’m not sure why they’re returning 2010 Buick Regal information instead of 2011 Buick Regals, but apart from that very minor quibble, I really like their advertisement. For the most part, they have done it right.  In their case, a higher click through rate will likely support their business objective – and fewer clicks would be bad.

Google’s Adwords are a very effective way to advertise, and per-click charges make billions of dollars of revenue and profit for Google each quarter. Large companies spend millions of dollars on campaigns annually, and for particular events.  (AT&T spent more than $8m on the iPhone 4 release, and BP spent more than $3.5m for “oil spill” related searches recently.) Those companies, however, are really enormous.

There are cases in which smaller businesses, and entire categories of smaller businesses might not want someone to click their advertising. Think about that. For particular categories, an absolute minimal % click rate might be optimal. For these businesses advertising campaigns, fewer clicks would be wonderful. Why?  Why would you develop a campaign to target less clicks?  That campaign would be done where less clicks is a more effective way to support the business objective.  What would that look like? 

Here’s an example where the fewest clicks possible produces the best results – the most optimal business results.Twin City Towing Tow Truck  Although that is good, not for the obvious reason, it is also bad, and also not for the most obvious reason.

I recently put together a campaign for Twin City Towing.  Their business objective was to increase their volume of towing. To do that, they want Google advertising to increase calls to Twin City Towing for people who want  Towing services and the other services that they offer:   Here are the two advertisements that I put together as part of this campaign.

Twin City Towing, W-S, NC
24/7 flatbed towing – Cars, Trucks
Boats, Etc,Call 336-692-2615
www.twincitytowing.net
$59 Quick Tow, Car Towing
Call
(336) 692-2615 WS – NC
More Towing & Services Available
www.twincitytowing.net 

This campaign was designed to target searches that were done in and around Winston Salem, NC for about a dozen terms like “Auto Towing”  “Local Towing” and “Tow Truck.”  All of this is pretty straightforward. I also targeted the advertisements for good placement.

Here is my most important point: A perfect response to this advertisement would be someone who saw the advertisement and called Twin City Towing to get towing services.(not a person who clicks through to Twin City Towing’s website.)

Because the advertising is charged per click, I want great placement on the advertising, and I also wanted the highest response to the advertisement for people, but I also want the lowest possible click conversion.  Here are possible response rates and their implications: If there is a click through rate of 2%, and 100 advertising impressions shown at a cost of $1.00 per click, my cost to reach 100 potential customers is $2.00. If I have a 20% click rate, my cost of reaching those same 100 potential customers is $20.00.  (or, for the same $20, I can reach 1000 customers.)

Think about this: If a business wants someone to CALL for a tow – why bother getting them to click to a website that tells them what to call? Why not simply include the phone number in the advertisement? Including the phone number in the advertising means that a stranded motorist who does a mobile phone search for tow truck doesn’t need to click through to a website, he needs to call a tow truck. Including the phone number saves the customer a step. It is simply more convenient for someone that needs to get towed, and that should increase business.  This is a case in which a lower click through rate simultaneously gives customers what they want while increasing business more cost-effectively. So what has the response been for this ad campaign?  From August 31 to September 6, 2010, here are the actual raw statistics:

Impressions: 959  –   Clicks: 4  – Click-rate:  0.42%  –  Cost per click: $1.29   –   Total cost $5.15

For most campaigns, that would be an extremely low click-through-rate.  If the campaign continues at this rate, a theoretical advertising budget of $100.00 could last for almost 20 weeks and reach almost 20,000 people.  If the business has added two tows this week, their cost for adding each tow will be approximately $2.57.  That is extremely cost-effective advertising, built on a counterintuitive philosophy of Less Clicks.

So – that seems good, but it is actually both good and bad.  Where is it bad?  Earlier I described search advertising as nebulous. The downside of advertising for a response that does not result in a click is that without other changes, it will be impossible for Twin City Towing to know, based on their call volume, and also impossible based on Google’s advertising campaign statistics if particular towing calls are actually coming from Google Advertising.   If there is an increase of call volume from towing customers, it might be cyclical, it might be due to a decrease in car reliability. It might come from Bing, or Yahoo, or perhaps the yellow pages. Because the response is NOT click-based, the perfect response to their Google advertising produces zero in specific and measurable statistics. 

So is this a good ad strategy?  Would it also work for cab companies? Would it work for other business segments? Are there better ways to quantify how this ad campaign meets the intended business objective?  

What do you think?

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September 7, 2010 - Posted by | Business, Competitive Advantage, Marketing, Search Engine Optimization, Technology

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