Conversion Optimizer: AdWords, Done Right

I have been using Google Conversion Optimizer since late September.  The program has been extraordinarily successful for me, enabling me to double revenues (and profit margin) in a month.  This post recounts my experiences.

Who I Am: I sell software which creates bingo cards to teachers.  The goal of my advertising campaign is to get them to download a free trial.  Some portion of those who download a free trial purchase the full product, making me money.

What Content Network Is: Conversion Optimizer (hereafter CO) is a way of bidding on the AdWords Content Network, which is all those little ads you see plastered on non-Google websites.  Typically, on the Content Network you write up a list of keywords, write up a maximum bid per click on each keyword, write some ads, and then get charged as the ads get clicked on on any site Google thinks matches your keywords. 

How Converison Optimizer is different: With CO, you don’t specify how much a keyword is worth to you.  You specify how much a conversion is worth to you.  Google then guesses, based on your previous history, what CPC (cost per click) price will achieve your CPA (cost per action) goal at any particular website, and bids accordingly on your behalf.  I like to think of this as pseudo-CPA bidding, since its really just a wrapper around CPC bidding.  Google has a beta CPA product that I haven’t tried yet, and probably never will, because CPA bidding has some severe issues for publishers which will make it perpetually less popular than CPC bidding.  There aren’t enough publishers in my market interested in CPA bidding to make it worth my while to start a campaign.

My Experience With The Content Network Prior to Conversion Optimizer:

Endless frustration pretty much sums it up.  When I started advertising on Google last September the content network was on by default.  At the time it was filled with Made for AdSense (MFA) sites, which scrapped content and existed only to get clicks.  They got clicks, but the traffic I got was extremely low quality, and they drained my AdWords budget dry.  I was advised by knowledgeable folks at the Business of Software boardsthat the Content Network was a hive of scum and villany.  I turned off the Content Network, advised everyone else to turn off the Content Network, and went on building my business for the better part of a year.

Why I Came Back to the Content Network: A professional peer who produces language learning software told me he had had excellent success with the Content Network.  I am skeptical about most people opining on the Internet but I have a good deal of trust for him and, moreover, I trust data.  Google had in the interim cleaned up some of their click fraud problems and shared Placement Reports with advertisers, which let you see which sites were running your ads and what their individual conversion rates, CPC prices, click through rates (CTR), and whatnot were.  With that data, I thought I could make something of the Content Network.

So things went well?  No, actually, they sucked for quite a while.  I got trapped in an endless cycle of checking my Placement Report every day, banning whatever flavor-of-the-moment site was abusing their own visitors to misdirect folks into clicking on the ad by disguising it as content (n.b. the site owner featured there says it was an accident, and I believe him, but I was getting a new site using a similar technique two to three times a day),  and losing the money I had allocated.  I have a day job at a Japanese company, with a 3 hour commute.  When I get home at 11 PM at night, I don’t want to sit down and have to immediate check AdWords to see if my pocket is getting picked yet.  I was right about to turn off the Content Network again when CO debuted.  I jumped at the chance, and became one of their earlier advertisers.

Anatomy of a bad site to advertise on:

Let me pull you an anonymized entry out of my Placement Report, and compare it to my averages.  These images are digitally edited composites of my AdWords status screens — I haven’t changed any numbers, but I have removed some to make the narrative clear.  If you are reading this on WordPress.com and not on a feed reader, the image is truncated — click it to see the full size.

As you can see, the bad site has a CTR much, much higher than my average CTR.  This is because their site is designed to funnel their own visitors onto the ad, which is disguised as content.  Notice the conversion ratio is terrible.  This is exactly what we would expect — since they were tricked to click on the ad, they have no real interest in downloading a free trial of my software, and click the back button to try to find what they were looking for on the dishonest site.  This drives my Cost Per Conversion through the roof (incidentally, my goal is 30 cents, and break even is about 60 cents).

Multiply that one dishonest site by about 20 or so, with more showing up every day, and you’ll understand my frustration with the Content Network.

Anatomy of a Good Site on the Content Network:

Here, on the other hand, we have a good site on the Content Network.  They wrote a page with unique, original content which is useful to folks in my niche and which got them in the right mood to need Bingo Card Creator.  Then, in a perfectly honest fashion, they had ads after their content that folks could click on if they were interested.  You’ll note that while 3.62% is a very good CTR it isn’t outlandishly, unbelievably good like 20%.  You’ll also note that their conversion rate is high (18%, a bit above my average for content network, which underperforms organic and paid search), and that I am actually profiting from this site.  Substantially.

Heck, I’ll out the good site: it is About.com’s page on Halloween bingo.  Thank you, About.com, you made me about $250 in October.  I salute you.

Where Conversion Optimizer Comes In:

You’ll note that the major observable difference in the numbers between Bad Sites and Good Sites is that Cost Per Conversion value.  Heck, from my point of view, that is the major reason why they are bad: if I pay $3 for a trial download, which converts at approximately 2.5% to a $25 purchase, I am spending $120 to make $25.  Not a good idea, and I’m supporting the pollution of the Internet in the bargain.  If I pay 30 cents, I am spending $12.50 to make $25, and supporting good content creation.  Good idea! 

Conversion Optimizer makes me bid on Good sites, not on Bad sites.  And that is why it works phenomenally, phenomenally well.  If I advertise on Bad site, their CPA price is through the roof for a day, and Conversion Optimizer silently and automatically makes sure I never send them an impression ever again.  Conversely, if I bid on a Good site, Conversion Optimizer analyzes how profitable that site is and steadily ups my bid so I can capture as much traffic as possible while remaining profitable.  This is why all of my Good sites with any volume hover right around the $.30 cents CPA.  (My bid is 35 cents.)

How Conversion Optimizer Is My Own AdWords Manager:

My market is very seasonal, and ideally I would be writing a new ad, ad campaign, and landing page for every major holiday, the start and stop of the school term, and whatnot.  But who has the time?  I was working 60 hour weeks in late October and, while I made some effort to capture the coming Halloween traffic, I couldn’t spend many hours on optimizing the heck out of my pages.

But why write landing pages when the rest of the Internet has already done it?  There are many, many pages out there extolling the fun of Halloween bingo and lamenting how hard it is to actually make the cards for it.  About half of the ones in the Google top 10 for relevant queries run AdSense.  They saw major traffic as Halloween approached, and that traffic was highly, highly motivated to play Halloween bingo… and my ad was in front of all of them, NOT because I had had the brainstorm “Hey, I should get the Advertising Department working on a coordinated campaign to shove 80% of my advertising budget into Halloween bingo” but because a soulless algorithm decided “Hmm, Bingo Card Creator is having its best return on investment on these sites.  I’ll put most of his advertising there.”    Its like my own private campaign manager… who works for no salary.  Lets have a scary Halloweenish Mwahaha! for that.

The Before and After Picture:
CTR 2.23% vs   .5-1%  (up by a factor of four.  This makes it easier for me to get cheaper clicks, because AdSense prefers to show ads which generate income rather than just having high bids.) 

CR 18%    vs 20-25% (not a significant change)
CPC 6 cents vs 9 cents (costs down by about a third, nice enough, but wait for it…)

Profit $500 vs $10 (Note that since my business previously profited about $700 a month, that is sort of a nice boost)

Wait a second, how did it make that much?

By scaling.  Conversion Optimizer, unlike my hand-edits to AdWords, just kept scaling as I tossed more money at it.  I ended up with an AdWords bill in the hundreds, to be sure, but I ended up with a 100% ROI on the hundreds, instead of ending up with a 20% ROI on my previous tens. 

Is it continuing?

The Halloween spike has subsided, and the Optimizer isn’t spending all of my budget allocation every day anymore (sadly), but Thanksgiving is right around the corner…  And I don’t have to do anything to prepare for it this year — the clicks will come straight to me, from whatever the Optimizer decides are the most worthwhile Thanksgiving bingo sites on the Internet as measured by their actual success in making me money.

Bonus Points:

It is difficult to tell if this number is totally accurate, because Google’s conversion tracking is sometimes lackluster, but I believe my trial-to-purchaser conversion rate on Conversion Optimizer-generated trials was about 4% as compared to my typical 2-2.5% number.  I attribute this partially to Halloween seasonality and partially to Conversion Optimizer finding me only the most motivated prospects, instead of folks who in aggregate didn’t really need Bingo Card Creator.  Obviously, increasing that conversion rate by 60-100% has a corresponding direct impact on my ROI.

Any bad news?

You can’t use Conversion Optimizer if your Content Network campaign gets less than 300 conversions a month.  When I spoke with one of the product managers he told me that was unlikely to change, as there are statistical significance issues below that number and the engineering team doesn’t think they can push it any lower.  I feel for you guys with CPAs in the $10 range, as I wouldn’t want to have to risk $3,000 on an unproven and relatively new product either.

There is also some tin-foil-hattery about giving Google enough information to guess where your profitability is.  In the end, I think as long as I get trial downloads at 30 cents in quantity I could care less if I gave up all of my customer surplus (econ term) from a smaller number of trial downloads achieved at under 30 cents each.  As you can see, the absolute number of dollars the campaign puts in my pocket exploded with Conversion Optimizer.

In a Nutshell:

Conversion Optimizer just made me a whole lot of money.  I recommend you try it out if it sounds like a good thing for your business’ unique circumstances.

Like this post?  This blog contains nothing but real experiences with real numbers about advertising, SEO, customer service, and every other aspect of running an online business.  If that sounds interesting to you, sign up for the feed.  If you know someone in the market for software to make bingo cards, I’d greatly appreciate a mention.

Deceptive AdSense Ads Worse Than Click Fraud

Much has been written about the dangers posed by click fraud on the Google advertising products, and how Google has taken steps to address the problem.  Click fraud, however, is only one of the ways for webmasters to defraud advertisers of money.  I will detail another way in this post.  The technique is already widely known among webmasters who use AdSense (and, indeed, sometimes I wonder if Google doesn’t encourage it).  If you’re spending money on the Content Network, you also need to understand it so that you can cut your losses when appropriate.

A bit of back story: recently, I bumped by spending on the Content Network up by 30%, to the “several hundred dollars a month” range.  As you might imagine, at 9 cents a click (bingo cards aren’t the world’s most competitive niche) this means I was getting a virtual torrent of traffic.  During my daily check of the summary statistics (a habit I suggest you get into after major changes to AdWords — in normal operation once a week is fine), I noticed that my click-through rate (CTR) on the content campaign had skyrocketed from 1% to 15%.

That couldn’t possibly be natural.  Remember, an AdSense ad is, by definition, being shown to someone who is at least partially interested in something related to your product but has not expressed any interest in being sold to yet.  (Folks on Google frequently have expressed an interest with their search queries, such as buy bingo card creator, which is why CTRs are orders of magnitude higher there.)  As such, you should expect CTRs to be much lower than on AdWords ads — dropping from 8-10% for a really good AdWords ad to about .5-1% or so for AdSense on most sites.

However, site design can have a major influence on how effective a site’s ads are at getting clicked.  Google recognizes this and teaches some of the tricks to optimize the ads (which, after all, makes them money): blend the ads into your site, place the ads where they are likely to be clicked, etc.  However, they have an anti-fraud policy for sites which toe the line, because using certain techniques to get the ads clicked on results in non-interested surfers clicking them, and that costs advertisers money and drives them away from the service. 

Since web pages are made to be scanned, anything that causes your eyes to be drawn toward an ad but away from its content causes your click-through rate to soar.  One previously common tactic, which is now banned, was to line up images with the advertisements in order to suggest to visitors that the links provided explanations for the images.  This resulted in quadrupling CTRs for the ads.  Since the AdSense equation is

Revenue = (traffic) * (# of ad units) * (CTR) * (cost per click) * (percentage Google gives you)

that quadrupled revenues for participating webmasters.  I’m strongly tempted to say “unscrupulous webmasters”, because once the visitor realizes they’ve been had they’ll be on the back button without a second thought, costing the advertiser money without giving them any chance to pitch their products to an interested customer.  That is, of course, the entire point of the excercise.

So that is the old scam.  Here is the new hotness: using CSS and HTML, organize your website in the fairly typical sections-broken-by-heads style.  Then, optimize your CSS such that the section travels off the page, with the clipping at a common resolution (800×600 or 1024×768) happening in such a way as to cut off the legitimate content and thereby give your visitors the impression that the ad is the content promised in the section headings. 

There are at least eight sites which are using this technique in the quite non-competitive bingo card niche.  I have taken a screenshot of one site which I thought was iconic.  (Editor’s note: After first posting this, the author of that site got in touch with me and said the placement was accidental.  I have no particular reason to disbelieve him, as inspection of his other pages shows a variety of ad placements.  I’m afraid that accident doesn’t explain the other sites, though.  I am keeping the pictures up to demonstrate the general tactic, but have edited the remainder of this post to be less accusatory of his site in particular.)  You really have to see it in full-screen glory to appreciate the effect.  That screenshot is about 255kb and shows the site in default IE7, but if you wanted to be really devious you can use CSS hacks to make it work equally well in all browsers at once, using pixel perfect layouts and a bit of elbow grease.  I have obscured the “branding” of the site, and have obscured the ads of my competitors to avoid associating them with it.  (If you happen to be a competitor of mine, drop me an email and I will happily give you my list of sites which are using these strategies, or you can make your own as described below.)

Here is a close up on the main content area of the page.  Again, you really should look at in in context — the actual CONTENT here is invisible until you scroll.  Unsophisticated visitors miss the distinction between the blended links and the advertisements (which happen to have quite similar titles) and click on the ads instead of the file links.  Click to see the expanded version.

Remember, the site does not actually show that content in the middle unless you scroll down to see it — and even with the content there, it is easy for an unsophisticated Internet user to click on the ads thinking they are getting the promised downloads. 

And click they do.  From my statistics, roughly 16% of the visitors of that page clicked on my one, single advertisement.  Given there were five advertisements, a click in my niche costs about a dime, and Google splits somewhere in the general neighborhood of 50-50 with webmasters, we can guestimate their revenue per thousand visitors using the above formula:

Revenue = 1000 * 5 * .16 * .1 * .5 = $40 CPM.  (Edit: The site owner suggests that he is earning $7.50 CPM for the site as a whole.  I don’t have access to his console, but I think my estimate is closer than his for pages which employ this technique.)

Sorting the list of the hundreds of advertisers I am paying, and ignoring ones for whom small numbers distort results, it seems like a more typical CPM for an honest advertiser in my niche is about $2.50.  So its fairly obvious why breaking the rules is so attractive — a single page with less than 1k impressions a day could generate something like $12,000 a year. 

And when I say generating, I mean “taking it from the advertisers”.

Most business owners understand the economics of advertising a product, but a brief review for the peanut gallery: I sell a $25 product, of which $24 is profit.  (It helps to be in software, the gross margins are quite healthy.)  The primary goal of having a user visit my page is to get them into the free trial of the software, which convinces about 2.5% of them to convert (i.e. buy), getting me my $24.  Thus, it is rational for me to spend anything less than $24 * .025 = 60 cents (at the margin) to achieve one trial being downloaded.

I have reason to suspect, given a year of data, that the attractiveness of my website and sales proposition should convince about 22% of interested visitors to take the trial for a spin.  Given that clicks in my niche cost about 9 to 11 cents each, this gives me an average cost of about 36-43 cents per trial download (it bounces around on a daily basis).  As 43 is less than 60, that means I am mildly profitable, with not too much room for error (if my conversion rate decreases to 2% and my cost per trial rises a few pennies I’m not making money anymore).

Bamboozling visitors to click on my ads hurts me more than errors ever could.

When an unsophisticated Internet user clicks on the “Create Bingo Cards” link thinking “This is step #1 of the 3 step process this website is pitching to me”, and then they are suddenly whisked to my very visually distinct site, they figure “Uh oh, something went wrong”.  And they immediately click the Back Button, to try to fix the mistake.  (Many of them probably click on a different ad instead, a mistake which is frustrating for them and great news for both the publisher and Google.)  As a result, it wasn’t 22% of folks coming in from these ads who actually completed a trial download, no, it was about 2%.  Which means that I was paying approximately $50 to get a sale of a $25 product — I guess I can make the loss up on volume? 

Oh, but it gets worse: Google is very, very smart about where they show your ads.  This is why they have a Content Score for the search network which prioritizes high CTR ads over low CTR ads: this maximizes money.  Google’s incentive is to maximize the number of clicks while minimizing the number of impressions,  because if they capture 100% of my budget then they want me out of the rotation ASAP so they can sell the inventory to another sucker advertiser.  This unholy, and I hope unintended, alliance of Google and the publishers using this trick sucked my budget dry within the first two hours of every day.  Google’s automated algorithms helpfully suggested I increase my spending by a factor of ten to compensate, so that instead of spending $15 a day to make $7.50 I would be spending $150 a day to make $75, for a monthly loss in the $2,000 range.

That Certainly Sucks.  What Can I Do About It?

1)  First, if you’re not in the position to routinely monitor your AdWords performance, opt out of the content network and don’t come back.  The scum sites are always one step ahead of Google, by definition, and if you’re not one step ahead of them that $2,000 a month loss could be yours.

2)  If you are in the position to routinely monitor your AdWords performance, use the Reporting feature in your AdWords console.  The report you want is Site Placement, for the previous 7 days.  Make sure you include the CTR and Cost Per Conversions columns.  Then, every day, grab your report in CSV format, and run a simple script on it to report all of the URLs where the CTR is higher than a threshold (I use 4%), the number of clicks is substantial (otherwise you’ll ban a lot of mom-and-pop sites for no good reason because 100% of their 1 visitors this month clicked your ad), and your Cost Per Conversion is greater than your profit.  (Almost guaranteed if you set your threshold right, because the only way to beat that threshold is to be exploiting your visitors, and exploited folks don’t make happy customers.)  Then, take any domain which appears on this screen, and add it to your banned list.

I am a Cygwin junkie so I do this with a gawk script every day, but if you are not a scripting wizard you can do it the longhand way, by increasing the number of rows in the visible report to 100, sorting by descending CTR (click it twice), and then visually identifying the rows that have significant number of clicks.  Then, take any domain which appears on this screen, and add it to your banned list. 

3)  If you are an engineer or product manager at Google, please, we could use some algorithmic help here.  I realize this suggestion is going to cost you money in the shortrun, but when advertisers lose money you will eventually lose money too, because they will stop advertising.  We give you all the information you need to calculate our maximum desirable cost per conversion (I have my doubts that we are intelligent in doing this, because you can use that information to screw us over royally, but business is based on a foundation of trust and for the moment I’m going to trust you).  You should provide a setting (or make it default behavior!) that ads stop appearing on any site where they transparently won’t be profitable.  I would also suggest screening sustained abnormal CTRs automatically for fraud or Terms of Service violations. 

4)  If you find a website which is abusive in their ad placement, you can complain to Google.  Realistically, I think they value algorithmic solutions over manual ones so much that you have zero hope of being heard (and they have to — they got to being a gazillion dollar company by NOT having to pay a human to deal with the little shrimp with the $15 a day advertising budget).  But if it makes you feel better, here is the link.

[Note: This post has been edited, as the author of the pictured site disputes my characterization of it, and claims that the effect was accidental.  As I have no particular reason to disbelieve that, and his other pages do not appear to be exploitative, I’m giving him the benefit of the doubt and have edited this post to remove accusations directed at his site specifically.  The technique, however, is being used by multiple sites and it strains credulity to think that eight people independently accidentally developed cross-browser compliant CSS and liquid layouts to achieve this effect.]

AdCenter Actually Performs Quite Decently

Volume?  Low.  Interface?  Annoying.  Work flow?  Terrible.  Cost per download?  Half of what Google is, and this required no tweaking whatsoever.  I’m buried under about four ads for places like Amazon which apparently bid on every word in the English language, but with no effort the following ad got about 4% CTR and, much more importantly, costs less than 30 cents per download it drives.  That is my target for reasonably profitability with advertising. 

 Print Custom Bingo Cards

Be ready in minutes using our software.  Download our free trial now!

http://www.bingocardcreator.com

 

 This might do a bit better if I did some optimization.  I don’t know if the time invested is worth the volume, though.  We’ll see.

Simple Changes Fixed Adwords

Regular readers know that my AdWords campaign, which I spent a great deal of time optimizing back when I started my business, has been not performing well for the last several months.  I have recently fixed this — amount spent is down 50%, CPA (cost per marginal trial download) is down 50%, and conversion to purchases is now measurable.  I get $2 in purchases for every $1 on AdWords, as opposed to $0.60-0.80 as of a month ago.  I might be jumping the gun, as this is just my results from one week, but tentatively I think my tweaks worked.

What I did:

• reenabled position preference.  For queries like “make bingo card” which I practically own, Google was happy to give me the #1 ad spot.  They then charged me about 15 cents for it, and I have an extraordinarily high click rate (something like 8 to 10%, depending on query).  That can end up burning my $3 per day very fast.  Now,  folks looking to make a bingo card are good prospects for me but not GREAT ones, since they may well be looking to make numeric bingo cards and they can do that cheaper elsewhere.  (If they’re looking to make cards for class on Friday, on the other hand, I very well might be the best site on the Internet for them, if I do say so myself.)  So I said, you know, let someone ELSE have that #1 spot.  (Position preference #2 through #10)  This let one of my competitors for the spot have it, and they get to pay 15 cents (or more, probably, since they don’t have my CTR for that keyword — most of my competitors, incidentally, are folks like Amazon who mass bid on every keyword under the sun).  I get the #2 or #3 spot now, for 10 cents.  It also comes with customers who appear to be more likely to convert (30% vs. 22% for trial).  Savings per download: 50% (45 cents vs 22 (!!!) cents).
• Killed underperforming keywords.  If they had a CPA greater than my expected profit per download (about 40-50 cents), no matter how good I thought they would be personally, I nixed them.  “How do I make bingo cards?”, etc, got voted off the island (CPA was over a buck!).  My only remaining keywords are my A-team, and I need to see if I can’t recruit a few members this week (since my total spend now is half of what I want to be able to budget every month — heck, as long as its actually sustainably profitable it makes sense to increase it, right?)

I Am Oddly Motivated By Free Money

I read (through the indispensable PlanetMicroISV‘s feed from WorkHappy) that Microsoft wants YOU to set up an account with adCenter this Christmas.  So much that they’re prepared to stuff $200 in your stocking (in credit, naturally) if you fork over the $5 opening fee.  Ho ho ho, does that sound tempting.  I categorically refuse to use YSM again (“Like AdWords, except inferior in every way — price, performance, features, reporting, and workflow”) but maybe MS can separate me from some of my money.  I think I’ll give them 4 months at $50 a month or so to see if I can get positive ROI.  If yes, they get kept for the long term.  If not, its an experiment that costs me a cup of cocoa.

The Busyness/Business Continues

I have not had the time to devote to Bingo Card Creator that I would have liked for several weeks now, so I’m largely operating it like a vending machine — I collect the change at the end of the week and, once and a while, write out a two-paragraph email to somebody with a question. My sales for the month of November have been rather limp (10 so far at the moment, roughly 1/3 off my comparable stats from October and significantly under my goal), largely due to both ceasing all active promotion and not fixing problem with current promotions. I hope to fix that after I get a wee bit less busy with the job/real life, and I also hope to get version 1.05 shipped at some point, hopefully in the first week of December or so. Christmas parties seem to be a good opportunity to play bingo, right?

But enough kvetching. Here’s something interesting: I’m now fairly consistently getting 100+ hits from Gooogle per day, accounting for a full half of my traffic, without increasing Google AdWords expenditures (although I did tweak my account settings a bit two weeks ago). The biggest mover is my Dolch sight word list page, but that search string only accounts for 10% of the hits per day. The rest are looooooooong tail. My best guess is that as my website ages its way out of the sandbox and the incoming links folks put up age, I’m slowly gaining in the SERPs pretty much across the board. 5% of my traffic comes from that extremely common query with me being at number 9/10 on page one, and the rest of it comes from very uncommon queries (“How do I teach dolch sight words to first graders in Korea”) which I’m an insta #1 on.

I think this reinforces the importance of writing natural language articles for SEO. You can spend all the time in the world optimizing for a certain phrase and fight for every additional place in the rankings you climb. Or you can write stuff which is useful to your target market and rank naturally over time. Not instant and not easy but not complicated, either.

Sidenote: My new-found prominence on SERPs has resulted in me getting more downloads and confirmed downloads the last 48 hours than I did in some weeks. Given my usual sales cycle, I’m hoping that means I get some serious order loving come this Friday. The Wii is coming out and while I’ve got the money sitting in an envelope I would love to buy an extra controller and game for it.

AdWords Kicks Me In The Shins

After finally achieving 30 cents per download (where AdWords is actually profitable) and keeping it there for a week my CPA creeped up again to 37 cents. Since I hadn’t made any big changes to my campaign and my market is pretty stable this time of the year I investigated what was up. It turns out that Google turned off half of my words in the vocabulary campaign, requiring a minimum bid of 15 cents for what used to cost 7-9.

This leaves me less than happy.

Some of the words were pretty borderline when it came to click-through rates, in the 1-2% region. Of course, they were also getting 3rd/4th position so I’d consider that decent. The other words were nothing like borderline: I got my cost doubled on “Dolch sight word bingo”, of all things, which is a) 6% CTR on a bad day and b) my landing page for that is human-generated and about as responsive to the query as you can possibly get.

It could possibly be eBay et al upping their CPC prices across the board (my only competition for AdWords is people bidding on gigantic portfolios, ranging probably in the millions of search strings), which means I just got priced out of the market, but unless their computers really like increments of 5 cents I’m guessing it was Google assessing the low-quality penalty rate. Which is indescribably irksome. I’ve sunk dozens of hours into optimizing that campaign to get it where it is, and I don’t think its even mathematically possible to make it have positive returns at the new-and-improved CPC rate.

Writing a Customer-Focused Blog

This is most definately not a customer-focused blog.  Why?  Because essentially none of you want to buy Bingo Card Creator, nor am I hoping to convince you otherwise.  My typical reader is, I think, either running a uISV or thinking about doing so, or someone who is in general interested in the business of software.  You know who Joel Spolsky is, can provide a pronunciation that goes with “/.” , and have at least some idea of what AJAX is.  My typical customer, on the other hand, has no clue who Joel Spolsky is.  She thinks “/.” is what happens when her kitty or 6 year old start banging away on the keyboard.  AJAX is either a cleaning product or, if she is of a literary bent, a hero of the Trojan War (my typical customer is quite intelligent, she’s just not technical, and woe unto the uISV who thinks this is a contradiction in terms). 

Why did I just belabour that point for a paragraph?  Because I’m about to tell you that despite my total lack of experience doing it, you can write a customer-focused blog, and it can be a great marketing tool.  And better than tell you, I’m going to show you.  I was inspired to do this by a post on the Business of Software earlier today.  I think the general tone of that thread is mistaken: in the first place, I think the majority of the advice you’ll find on that forum is excellent or at least good to hear even if I wouldn’t follow it myself.  In the second place, there is a lot of tension between people who want “specific” answers to their questions who won’t put out specific statements about what they’re doing.  Many people have their reasons for not being very detailed about their own situations, and I respect that choice, as I respect the choice of folks to ask vague questions like “My software isn’t selling enough.  How can I fix this?” as long as they understand that the answers they get are going to be vague, too, like “Try blogging.”

But, seriously, try blogging.  Writing a bog about and for your customers, as opposed to about and for your business, is a great marketing investment.  It humanizes you, it gives you “street cred” within your community (people above the age of 25 call this “goodwill”, which I don’t use because its defined in the dictionary as “Money spent on marketing which we can’t prove was wasted and so want to claim as a success to the boss”), it drives qualified traffic straight to your website, and it is mana from heaven in the Search Engine optimization game.

How blogging works: Yeah yeah, I know, you know how blogging works.  You’re here, after all.  In fact, I’d give 50-50 odds that you got here from either a feed reader or a blog or other information gatherer you read every single day, the same way my father reads the Wall Street Journal.   But indulge me as I present to you the Pyramid of Participation, a concept which has been done to death before by smarter people and so which is perfect to hold off on.

This artistic masterpiece represents sort of the Power Law of Blogging: of any given blogging community, 1% of the population actually blogs.  Those are the creators.  10% of the population contributes to the blogs — they comment, they tag, they submit their favorite stories to Digg/Slashdot/Reddit, yadda yadda.  And the rest of the folks have lives.

Why is this critically important for you to understand?  Because most bloggers consistently pitch their blog to Creators or Contributors, because most bloggers want links and recognition and those folks contribute that in spades.  You, however, want cash money for your blogging efforts and as a result you’re going to want to pull a Seth Godin and invert the pyramid (he calls it “inverting the funnel”).  Fear my massive Paint.NET skills:

Basically, what you really want to do is encourage those folks who are really only passively engaged with your blog to become actively engaged in it.  How do you do this?  You give the people what they want.  What do the people want?  Your call, you know your audience far better that I do or ever will.  In the vast majority of cases.  There is exactly one uISV out there I feel qualified to comment on besides a certain outfit that makes bingo cards.  Its Declan Software, which as a fraction of their business produces resources to help Japanese students study.  Been there, still there, done that, still doing that, got the battle scars to prove it.  And conviniently Ethan, the owner, wonders if blogging would work for all markets.  Well, lets talk about that.

Blogging is for bloggers.  Ever noticed how poetry is for poets?  Really, if you find anyone who has even a passing interest in poetry these days, I guarantee you they have a scrapbook somewhere where they’ve got some free verse just waiting to see a publishing offer if they only had the time.  This is because the poetry community is insular and inbreeds intellectually far more often than is healthy — and if the connection to blogging doesn’t immediately jump out at you, you need to develop more of an ability to laugh at yourself (yes, I’m talking to YOU, Mr. I Only Have 15 Feeds In My RSS Reader).

Anyhow, blogging is traditionally for bloggers.  And this is bad, because unless you’re pitching products to the 53,651 members of the Silicon Valley echo chamber, who probably run an average of 16 blogs apiece, not counting the Squidoo Lenses and other “I can’t believe its not blog” innovations which I haven’t heard about in rural Japan yet.  Because it means lots of people who would buy from you, but don’t blog, won’t hear about you.  Unless you give people an incentive to tell their friends about you, or let them find you on search engines.

Yeah, like that will work: It will, if you can convince twenty people that your blog has something useful to say.  Plus or minus two.  Twenty people all tell a couple of friends, and then one of their friends posts you to a message board, and then five people on the message board tell your friends, and you get picked up on another message board, and then somebody posts you to #INFLUENTIAL_SITE_IN_YOUR_COMMUNITY, and then suddenly BOOM your blog is popular and you have to feed the beastie every day.

Yeah, heard it before, its a pipe dream:  Well, I only know what I know, but I’ve got a pretty amusing graph sitting somewhere on my WordPress interface showing a trickle of hits, then me hitting about twenty visitors, then sustained (and pretty spiky) growth until I hit 20k uniques a month.  In, hmm, two months.  While I was writing as an idle hobby about a business I run as a mostly-idle hobby on top of holding down a day job.  For folks who are serious about using your blog as a promotional tool, I think you can make my 20,000 hits a month look like chicken feed.  You just have to give people what did they want.

So what did we want?  Well, I’m guessing most of you came in because I had a combination of something almost nobody else did (a transparent business — not a big business, not a successful business, just a transparent business) and a few articles which folks actually found genuinely useful.  Maybe, oh, I don’t know, a dozen over two months.  About 20 people were intrigued enough by the initial concept to keep coming, blogrolling and linking followed, and with just a tad of promotion on my part I started ending up on the front page of WordPress a couple times a week.  Now, I’m helped by the fact that my blog is interesting to a community which has a lot of mechanisms for getting the word out (the Business of Software boards, lots of blogs, joel.reddit.com, Digg, Slashdot, yadda yadda), but the Internet is a very wide open place nowadays.  I get hits to my actual business site from sites with x0,000 users whose common interest is teaching elementary school English: its like Dick Slashdot Jane in their community, everybody who is online knows somebody who makes it a daily routine to check the buzz on that site.  (Do you know where your user base hangs out?  Because if you don’t, I’m worried for you.)

So how do you get folks on that really large site to come visit your site and buy from you?  Well, an introduction from somebody they trust helps wonders.  Ah, problem is, they don’t trust you and you don’t know anybody they do trust.  So start up a blog, and give folks a reason to start trusting you.  One way to do this is by giving them stuff.

Folks love getting stuff for free: You’ve got a trial version so you understand this concept: have pain, have widget which partially alleviates pain, induced to spend money to buy Premium Registered Widget which completes the promised pain relief.  Guess what, information can be a widget, too.  If you write stuff of use to your target audience, how-to’s, things they are genuinely interested in hearing, etc, they will beat a path to your door.  I have taken the liberty (without permission — mea maxima culpa) of writing two articles plugging Declan Software’s product, in the course of providing stuff which is genuinely useful to people, like me, who are studying for a very difficult exam this December.  (I do use their software, and I like it, and I’ve plugged software I liked before here, so might as well have an ulterior motive for the plug).  These could just as easily have come from a clearly marked staff blog — not saying that Declan Software should have a blog, but saying that if they thought it would make sense for them I bet it would turn out well.

Here’s one reason: Google loves blogs.  Can’t get enough of them.  WordPress shows me what search engine queries hit my blog every day, and I end up on the first page for random, high-value queries sometimes shockingly fast even when not trying to do so.  e.g. “teach yourself kanji” after writing a post tangentially about the Japanese language some weeks ago, back when this blog had no reason to be Google-ranked for anything and certainly not that.  Somebody searching for “teach yourself kanji” is a pretty good prospect getting to know Declan Software, or at least their Japanese department.  You don’t have to get him to buy in that browser session — just try to get him to take a positive action to you.  Maybe induce him to come back tomorrow, by promising a Kanji of the Day, or answer a burning question he has, like “What do I need to do to pass the JLPT this December?”  (The second of these is a much harder sell than Kanji of the Day — I think you should probably have a mix of both on your blog.)  You start ranking for queries quickly, too — less than 48 hours ago I started talking about registration systems and now I’m getting rather more hits for “how do I break shareware time limit” than I rather care to think about.

And then get him to tell other people.  Japanese language learners and enthusiasts (the anime crowd) are typically young, high-school to college, and they congregate online in all sorts of places.  Chat rooms, Facebook, what have you.  They practically live on instant messenger and the word “hyperlink” does not scare them.  And everybody who is studying for the JLPT knows somebody else who is, probably several someones (misery loves company).  So when you produce things which are genuinely of use to somebody, like answering “Hey, how many points do I need to pass this test?” (come on, you were a college student once, do you give good odds that you would have found your application packet and hunted for the answer or would you take the shortcut and ask Google or a buddy?), they might pass it around to other folks they know.  Who might stick around for other interesting things you’ve got on the page.  And pretty soon, you’ve got your twenty.

Speak your customers language: You blog needs to have a voice, and it needs to sound like your customers.  The easy explanation for why this is important is “Because Google is scarily good at long-tail queries, and you’re much, much more likely to rank on these if you write like your customers write than if you don’t”.  The other reason is because people are much more likely to introduce their peer group to people who they know are already peers.  On this blog, I can occasionally be jocular and I sling the tech jargon with the best of them.  On my actual website, I speak like an elementary English teacher (note: I hope I authentically sound like an elementary English teacher, because I was one for a couple of years).  Your customer likely does not care about the technology you are using, the difficulties of porting your code to .NET, the bug that nearly wiped out your version control system.  Your customer likes to hear about themselves, and their interests, and every once in a while how your product helps them further their interests.  Which is why my test-postings for ReadWrite Kanji barely mention the product at all, except at the end.

Have a goal in mind for every post: You can tell my blog isn’t that much more than a hobby because I definately don’t do this.  A lot of my posts are like “Here, I have something to say.  Alright, I said it.  Well, tata, see you later.”  If you are writing a customer focused blog, “Tata, see you later” is a waste of your customer’s time unless its the sort of “See you later” that means “I will pick you up at 7:00 this Friday and I hope you like Pirates of the Carribean because thats the movie we’ll be seeing”.  The sample posts have clear goals: Kanji of the Day wants to be Japanese blogging crack.  I want a portion of the readers who see it to be enlightened and intrigued by that post, and to make a note to themselves “Wow, I want to come back tomorrow, when I will get another kanji to master”.  Studying for the JLPT wants to generate a trial download for ReadWrite Kanji and, perhaps, an authorative mention to a friend or community the reader is a part of: “I saw this post earlier about the 2-kyuu.  Good stuff here!  Check it out.  God I hope I pass.  What was the assignment for tomorrow?”  Notice how I end both posts with a call to action and include relatively little extraneous stuff that could draw folks away from my site.  (Now, one place I’d suggest a link is near the top — folks who are just getting into your article don’t want to click away from it quite yet, so might as well send a kickback to whatever source you’re using and just as imporantly end up on their list of Trackbacks so that they can see this nice person who Cares About What They Have To Say.  Bloggers love that.  I’ve got a soft spot for this, too — probably 70% of the incoming links I get in an article get me to respond to the article in some fashion.)

Offer a mix of content:  You don’t limit yourself to one type of pitch on your AdWords, and you don’t have just one take on your product page, why have a blog which is a one-trick pony?  Experiment, and let people know you’re doing it and offer to engage them in a conversation about what they find useful.  More short posts?  More long posts?  More link roundups from their community?  More “original reporting”/punditry?  Whatever the answer to the question is, the fact that someone is answering means they have an investment in you that they will protect by coming back — you just have to invest in them so that they feel inclined to join the 10% of the world that will ever post a comment, etc.  A regular schedule of content lots of folks find regularly useful with occasional change-ups keeps folks coming back for more, too: Instapundit, for example, is 99% “I find a good article my readers will like and give a pithy 2 sentence summary” and 1%, sporadically, “I demonstrate the penetrating insight that makes folks really love my 2 sentences of pithy commentary enough so that they follow me for years and learn what in-jokes like ‘Heh’ and ‘Indeed’ mean.”  I’m sure if you think about it you can identify the things in any random community you belong to that are the familiar sights of home: “+1 for X” on Business of Software, hot grits, yadda yadda.

And some percentage of the folks who come to your blog every day or every week to check up on what you’ve got to say will read the tasteful, clearly marked ads you’ve got interspersed with the content (maybe thats not the right way to say it — the ads are content by then, because your blog is about things your customers like and find useful and your customers are obviously interested in what you have to sell), and then you get to print money hats.

Or there is the distinct possibility that I have no clue what I’m talking about.  It wouldn’t be the first time.  Now, if you’ll excuse me, got some studying to do.  (P.S. Look, ma, no call to action!  Yep, this blog is going to remain happily unmonetized.)

What Should Starbucks Do

I spotted this on Seth Godin’s blog.  Starbucks had an incredibly ill-conceived promotion where they mailed some fraction of their employees with an email coupon for a free iced drink, then told them to mail friends and family members.  Oh boy, a chain letter, no possible way that could get out of hand, right?  Well, it did, and as a result Starbucks canceled the promotion.

Seth opines that, were it his call, he would have notched the driver’s license of anyone who used the promotion and given them the free drink.  The business problem this solves is that it prevents someone from going to the 46 Starbucks within walking distance from, say, the Sears Tower and getting 46 free ice lattes or whatever it is Starbucks sells.  His rule #3 (“We never accept online promotions.  However, if you were scammed by one, have *a free premium which the company can give out almost at will*.”) is, in my opinion, a brilliant solution to this problem for a chain which doesn’t have it yet.  But it doesn’t help Starbucks since they can’t force the cat back into the bag.

Here’s my solution: for every customer who comes in asking for their free iced fraparamadingdong, tell them “We’re very sorry, that promotion has been abused so we have to ask you this: what’s your first name and the last four digits of your telephone number?”  Then make a show of writing it down, and give them the product.  The only purpose of this system is to keep honest men honest and to remind folks that there is no presumptive right to free Starbucks, the way that many college students have come to believe that there is a presumptive right to free music.  The information collected can’t be enough to make a person hesitate for fear of their privacy, but that plus the fact that it is recorded is just enough to make them remember “Oh, thats right, I’m being watched”.

Here’s the rationale: the impact of one scammer who realizes he can beat the system (and, if you think of it, there is no system to beat here) is one ice drink per store.  The stores are franchises so you basically evaluate the damage to their profits on an individual level, where 1 or a 100 ice drinks is pocket change (here’s the secret to Starbucks: no matter how much they charge you, making the drink didn’t cost more than 10 cents!).  The damage to the brand from having to put that sign up everywhere, on the other hand, is at literally many orders of magnitude above the individual store.

How much content does your website have?

Sometimes I visit uISV websites which are very minimalist: they have about 5 pages total.  One page about the product, one for ordering, one for support, one about the company, etc.  My website isn’t exactly a monster (probably on the order of 25 pages at the moment), but I have significantly more content than websites organized like this.  And it makes me probably $50 a week, which is not a bad return for writing a few extra pages about elementary school bingo variants.

Why do these free articles and free resources make me $50 a month?  Because they bring in traffic and, more importantly, they bring in my niche on generic search engine terms.  I currently do obscenely well on MSN and Google in terms of organic search traffic, and the overwhelming majority of it is for Long Tail queries which you just won’t get if you don’t have the content to justify it.

For example, I wrote about 200 words on one of my pages about icebreaker bingo.  That content was picked up by 12 searchers in the last seven days and generated 4 downloads.  Four downloads is worth in excess of a dollar to me (at my current CPC prices, about $1.20 actually), and that content keeps paying me a dollar week after week.  (Yeah, minor niggle: if folks never buy, then its not really worth a dollar.  But they do.  I got two sales this week from customers who came in from organic search traffic.)  However, without the search engine being told a couple of times that icebreaker bingo is a use case for Bingo Card Creator, it won’t infer it on its own.  Which is why programs which trounce me on the search engine rankings for generic queries like “Bingo Card Creator” (grr, Google, how long until I can be the #1 result for the name of my company?!) show up exactly nowhere.

Another thing content does is that it performs SEO for keywords you haven’t thought of yet.  In the last 7 days, I got approximately 400 hits and 80 downloads from organic Google and MSN.  The most common search term there was Bingo Card Creator, with approximately 5% of the total queries.  The rest were, in general, a veritable deluge of once-in-a-lifetime queries… the kind that natural English snaps up like hotcakes and all the SEO in the world won’t get you.  You know, queries like “free download word bingo literacy” (sidenote: she evidentally cared a lot more about “word bingo literacy” than “free”) or “dolch preprimer home cards”.  (Quick comparison: I also spent approximately $20 for 260 hits and 50 downloads from AdWords.  Which has not generated a sale yet this week, I think.  D’oh.)
Content also has a nice property called linkability.  Very few people are going to say “Wow, check out this trial demo download” (if they do about your software, mazeltov, you are going to be rich like a king).  However, if you put up, say, a page about how to use bingo to assess reading difficulties, teachers will swap it via email, link it on their blogs, and chat about it around the water cooler.   Which brings in more eyeballs, more PageRank, and more downloads.  Yay, a positive cycle.  Plus you’re providing a service of use to people and thats always a good thing, even if they don’t end up buying from you.

A suggestion, though, since you do want to encourage people to eventually buy from you: aside from the obvious Download Free Trial link that you should have on every page of your website, have the text of your content plug your product wherever it is natural to do so.  If its not natural to do so, maybe you should be writing different content.  I like plugging Bingo Card Creator once early in the text (“If you don’t have a set of bingo cards, you can generate one in seconds with the free trial of Bingo Card Creator”) and then once after the end (“Looking to do something else with sight word bingo?  Why don’t you make yourself some cards with the free trial of Bingo Card Creator”).

So, if you’ve got a website which looks spartan at the moment, consider sprucing it up with some content of use to your target user.  More of them will come visit your page, and hopefully some of them will stick around to see what you have to offer.  (And remember, serving pages is essentially free at the margin.  For the 80% of folks who visit my Dolch sight word lists and leave without viewing another page on my website I pay, well, absolutely nothing.)